Free invoice generator and tax tools for Ireland

A sole trader is taxed on profit under self-assessment: income tax at 20% and 40%, USC, and Class S PRSI, all collected by Revenue. A company pays corporation tax at 12.5% on trading income and 25% on non-trading income and excepted trades. Employers withhold PAYE income tax, USC and employee PRSI from staff and pay them over with the employer's own PRSI.

Revenue also collects VAT. Several rates sit under the 23% standard rate: 13.5%, 9% and 0%. Since 1 July 2026 the 9% rate applies again to restaurant and catering supplies, hot takeaway food and hairdressing, alongside electricity, gas and periodicals.

The latest change affecting payroll is the PRSI increase of 1 October 2026. Class A employee PRSI moved from 4.2% to 4.35%, and employer PRSI on weekly pay above the top threshold moved from 11.25% to 11.40%. USC is set each year: for 2026 the rates are 0.5%, 2%, 3% and 8%.

Ireland has no turnover-tax regime for small businesses, but a VAT-registered business can ask Revenue to account for VAT on the moneys received basis, so that VAT falls due when the customer pays rather than when the invoice is issued. It is open if turnover does not exceed, and is not likely to exceed, 2,000,000 euro in any continuous 12 months, or if at least 90% of supplies go to customers who cannot claim a full VAT deduction or are not registered for VAT. It cannot be used for connected-person transactions, construction subcontracting services, intra-EU acquisitions or imports. Normal invoice rules still apply.