How tax credits work in Ireland

Tax credits reduce the amount of income tax you pay. They are one of the biggest reasons two people on similar salaries can have different take-home pay.

Written by: Money Made Clear
Type: General information
Sources: Revenue / Department of Finance
Last checked: 7 October 2026
Not advice: General information only

General information only, based on official public sources. Not financial, tax, legal or welfare advice.

Reviewed against Revenue guidance · Last updated May 2026

Quick answer: Tax credits are taken off your income tax bill after your tax has been calculated. In 2026, the Personal Tax Credit and Employee Tax Credit are each €2,000. Each rises to €2,125 from 1 January 2027.

What a tax credit does

A tax credit reduces your income tax directly. It is different from a deduction from your income. If your tax bill is €5,000 and you have €4,000 in tax credits, your income tax due becomes €1,000.

Tax credits reduce PAYE income tax. They do not reduce USC or PRSI.

Source: Revenue — How tax credits work

Common PAYE tax credits

Credit	Plain English meaning	2026 amount
Personal Tax Credit	A basic credit Revenue gives if you are resident in Ireland. The amount depends on your circumstances.	€2,000 for a single person
Employee Tax Credit	A credit for many PAYE employees.	Up to €2,000
Other credits	Credits such as Home Carer, Single Person Child Carer, Age or Rent Tax Credit may apply depending on your situation.	Varies

Source: Revenue — Tax rates, bands and reliefs 2026

Credit	2026 / current	From 1 January 2027
Personal Tax Credit	€2,000	€2,125
Employee Tax Credit	€2,000	€2,125
Earned Income Credit	€2,000	€2,125

Source: Department of Finance — Budget 2027 taxation measures.

How credits are spread through the year

Under PAYE, tax credits are usually spread across the year. If you are paid weekly, they are split into 52 weekly amounts. If you are paid monthly, they are split into 12 monthly amounts.

For example, €4,000 of yearly credits is about €333.34 per month or €76.93 per week.

Unused tax credits

Revenue says unused credits in a pay period can be carried forward to later pay periods in the same tax year. You cannot get a refund just because some credits were unused, and you cannot carry them into a later tax year.

Where to check your credits

You can see your tax credits on your Tax Credit Certificate in Revenue myAccount. Your employer gets the total credit amount through Revenue payroll instructions, but not the full breakdown of your personal credits.

If your PAYE looks too high, your tax credits may be missing, split incorrectly between jobs, or your job may not be set up properly with Revenue.

What this means in real life

In practical terms, tax credits reduce the income tax calculated through PAYE; they are not normally separate cash payments added to wages. Revenue spreads annual credits across pay periods, so the amount available each week or month affects the PAYE line on a payslip. If employment details or credits are missing, PAYE can be higher than expected even when gross pay has not changed. A credit can only reduce income tax liability and does not generally reduce USC or PRSI. Unused credits may be relevant when Revenue reviews the year, but the result depends on income and tax already paid. The Tax Credit Certificate shows the credits and rate bands Revenue has allocated, while the Irish Salary Calculator compares a standard single employee using the main 2026 and 2027 credits.

Related guides

Official sources

For current rules, rates and eligibility, check the relevant official public source.

Revenue