Workers warned that failure to adjust tax bands and credits will see them paying more income tax in new yearWorkers who get a pay rise in 2026 have been warned that they will feel the squeeze from higher income tax and USC from the start of the new year. This is because this coming year there will be no increase in the income tax bands and tax credits, the first time in five years this has happened. Instead, money allocated to tax changes was used to fund a Vat rate cut for the hospitality sector and to fund incentives for builders. Middle-income earners who get a pay rise will be €500 worse off over the next year because of the failure to adjust tax bands and credits. Pay rises in the new year would push more people into the higher 40pc income tax bracket, director of Chartered Accountants Ireland, Cróna Clohisey, said recently.

Source: Irish Independent December 31, 2025 08:31 UTC