From 1 October 2026, the main employee Class A PRSI rate rises from 4.20% to 4.35% for weekly earnings above €352. The corresponding employer rates also rise by 0.15 percentage points. Employee pension contributions may reduce income used for an Income Tax calculation when they qualify for relief, but they do not reduce pay used to calculate employee PRSI or USC.
What changes on 1 October 2026?
For most Class A employees earning more than €352 a week, the employee PRSI rate increases by 0.15 percentage points. The rate moves from 4.20% up to 30 September to 4.35% from 1 October. Employer Class A rates also increase by 0.15 percentage points: the lower rate moves from 9.00% to 9.15%, and the higher rate moves from 11.25% to 11.40%.
| Weekly pay band | Employee rate to 30 September | Employee rate from 1 October | Employer rate from 1 October |
|---|---|---|---|
| €38–€352 | 0% | 0% | 9.15% |
| €352.01–€424 | 4.20%, subject to tapered credit | 4.35%, subject to tapered credit | 9.15% |
| €424.01–€552 | 4.20% | 4.35% | 9.15% |
| More than €552 | 4.20% | 4.35% | 11.40% |
The €12 weekly PRSI credit continues to taper between weekly earnings of €352.01 and €424. Actual payroll results in that band require the statutory credit calculation, so a simple percentage comparison may not reproduce the payslip exactly.
How much could the employee increase cost?
For earnings outside the tapered-credit band, the gross difference is 0.15% of PRSI-able pay. The examples below assume steady pay, Class A treatment and no unusual payroll items.
| Gross pay | Simple extra employee PRSI | Timing assumption |
|---|---|---|
| €600 a week | €0.90 a week | €600 × 0.15% |
| €800 a week | €1.20 a week | €800 × 0.15% |
| €4,000 a month | €6.00 a full month | €4,000 × 0.15% |
| €60,000 annual salary | €90 full-year equivalent | Only the post-1 October part applies in 2026 |
A €60,000 annual salary therefore has a simple full-year equivalent increase of €90, but 2026 contains only the final three months at the higher rate. Payroll frequency, pay dates, irregular earnings, benefits in kind and PRSI subclass can change the amount actually deducted.
Does paying more into a pension reduce the PRSI increase?
No. A qualifying employee pension contribution can reduce taxable pay for Income Tax, subject to Revenue rules and personal limits. It does not reduce gross pay for employee PRSI or USC. Increasing an AVC or PRSA contribution should therefore not be presented as a way to avoid this PRSI change.
This distinction matters when estimating take-home pay. A contribution may receive Income Tax relief at the person’s marginal rate, but the employee generally still pays PRSI and USC on the pay used to fund that contribution. The site’s Income Tax calculator models this distinction for a straightforward PAYE illustration.
Employee and employer pension contributions are different
An employer contribution to an approved occupational pension scheme, PRSA, PEPP or automatic-enrolment account is generally treated differently from an employee contribution for payroll tax. Current Revenue guidance states that qualifying employer contributions are not subject to Income Tax, PRSI or USC as employee pay. From 1 January 2025, employer contributions to an employee’s PRSA or PEPP are subject to an employer limit of 100% of the employee’s salary; contributions above that limit can create a benefit-in-kind charge.
That rule does not make an employer-funded contribution automatically suitable and does not allow a salary payment to be relabelled without considering the employment arrangement, pension rules and payroll treatment. Employers and directors should obtain payroll and regulated pension advice for their circumstances.
What should employees check on the October payslip?
- Confirm the PRSI class and subclass shown by payroll.
- Compare the employee PRSI line with a September payslip that has similar gross pay.
- Separate the PRSI change from Income Tax, USC, pension and other deductions.
- Check whether bonuses, overtime or benefits in kind changed the PRSI-able pay.
- If you contribute to a pension, confirm whether the contribution receives Income Tax relief through payroll or must be claimed separately.
- Use the annual calculator as an estimate; use the actual payslip and Revenue records for the final position.
What should employers and payroll teams check?
- Ensure payroll applies the new employee and employer Class A rates from the correct pay date.
- Retain the tapered employee credit for the relevant weekly earnings band.
- Do not deduct employee pension contributions from PRSI or USC pay.
- Keep employee and employer pension contributions correctly classified.
- Review budgets for the employer-rate increase, especially across larger payrolls.
- Explain the separate lines clearly so employees do not confuse PRSI with pension deductions.
Frequently asked questions
When does the 2026 PRSI increase start?
The Class A rates covered here change from 1 October 2026. The applicable rate depends on the pay period, earnings band and PRSI classification.
Can an AVC reduce employee PRSI?
No. A qualifying AVC may receive Income Tax relief within the personal limits, but employee pension contributions do not reduce pay for PRSI or USC.
Does the employer PRSI rate also increase?
Yes. The main Class A employer rates increase by 0.15 percentage points from 1 October 2026.
Will everyone lose exactly 0.15% of gross pay?
No. Earnings at or below €352 a week have a nil employee rate, the tapered credit affects the €352.01–€424 band, and other PRSI classes or payroll circumstances can produce different results.
Should I change my pension contribution because PRSI is increasing?
A contribution decision should be based on affordability, tax-relief capacity, employer contributions, pension objectives and the arrangement’s rules. The PRSI increase alone does not establish suitability.
General information only. Rates reviewed on 25 September 2026 against current Department of Social Protection Class A tables and Revenue pension-payroll guidance. Payroll and pension treatment depend on the actual pay period, PRSI class, arrangement and circumstances.
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