What you pay on your profit in 2026
Profit is what the business takes in, less the expenses Revenue allows. Three charges apply to it.
| Charge | 2026 rate | Good to know |
|---|---|---|
| Income tax | 20% on the first €44,000 for a single person. 40% on the rest | The 20% band is €53,000 for a married couple or civil partners with one income |
| USC | 0.5% on the first €12,012. 2% on the next €16,688. 3% on the next €41,344. 8% on the rest | Not charged if your total income is €13,000 or less. A further 3% applies to non-PAYE income over €100,000 |
| PRSI Class S | 4.2375% of 2026 income, with a minimum of €650 | The rate was 4.2% up to 30 September 2026 and is 4.35% from 1 October, so a blended rate applies to the year |
Against the income tax you set your tax credits. A single person has the €2,000 personal credit. The Earned Income Tax Credit adds the lower of €2,000 or 20% of your earned income. If you also have a PAYE job, the employee credit and the Earned Income Tax Credit together cannot come to more than €2,000.
Reduced USC rates apply if you are 70 or over, or hold a full medical card, and your income is €60,000 or less.
A limited company is taxed differently. We compare a company's 12.5% rate with what a sole trader pays.
A rough example: €40,000 profit
A single person with a profit of €40,000 in 2026 and no other income:
| Charge | How it is worked out | Amount |
|---|---|---|
| Income tax | €40,000 at 20% is €8,000. Take off the €2,000 personal credit and the €2,000 Earned Income Tax Credit | €4,000 |
| USC | 0.5% on €12,012, 2% on €16,688 and 3% on the last €11,300 | €733 |
| PRSI Class S | 4.2375% of €40,000 | €1,695 |
| Total | €6,428 |
That is about 16% of the profit. Your own figure depends on your credits, your other income and your expenses. Treat this as a guide and confirm your position with Revenue or an accountant. We do not give tax advice.
Preliminary tax and the 31 October deadline
Self-assessment has one date for paying and filing. By 31 October 2026 you must:
- pay your preliminary tax for 2026
- file your return for 2025, on Form 11
- pay any balance of tax still owed for 2025
If you both pay and file through ROS, the 2026 deadline moves to 18 November.
Preliminary tax is your own estimate of the income tax, PRSI and USC for the current year. To avoid interest, it must be at least the lowest of these:
- 90% of the tax due for the current year
- 100% of the tax due for the year before
- 105% of the tax due for the year before that. This one only applies if you pay by direct debit
Your first year. Revenue says you may not have to pay preliminary tax in your first year in self-assessment, because you can base it on the previous year's liability, which is normally nil. The first bill then lands the following October, and it is two bills together.
A business that starts in spring 2026 could owe nothing until October 2027. Then it owes the whole of its 2026 tax and a preliminary payment for 2027 at the same time. Put money aside from the first sale.
If you are late. A return filed up to two months late carries a surcharge of 5% of the tax, up to €12,695. After two months it is 10%, up to €63,485. Revenue also charges interest on late payments for each day.
It helps to build a month-by-month cashflow with the October tax bill written in.
PRSI Class S: what you pay and what it covers
You pay Class S PRSI if you are self-employed, aged 16 to 66, and have income of €5,000 or more a year. People born on or after 1 January 1958 keep paying up to age 70, unless they have been awarded the State Pension (Contributory). Revenue collects it with your income tax.
Below €5,000 a year you are exempt. Citizens Information says you may then be able to pay €650 as a voluntary contributor, if you meet the conditions.
The Department of Social Protection says Class S provides cover for:
- State Pension (Contributory)
- Bereaved Partner's (Contributory) Pension and Guardian's Payment (Contributory)
- Maternity, Paternity, Adoptive and Parent's Benefit
- Carer's Benefit
- Invalidity Pension and Partial Capacity Benefit
- Treatment Benefit
- Jobseeker's Benefit (Self-Employed), which is the jobseeker's payment for people whose self-employment has ended
- Benefit Payment for 65 Year Olds
Illness Benefit is not on the list. Citizens Information says Class S does not, in general, cover short-term payments such as illness payments.
Your contributions for a year only count once that year's income tax and PRSI are paid in full. The Department then awards 52 contributions for the year. If part of the bill is unpaid, it awards none.
VAT: when you have to register
You must register for VAT when your turnover in a calendar year goes over a threshold:
- €42,500 if you supply services only
- €85,000 if you supply goods
Turnover is counted without VAT. Below the threshold you can choose to register, for example to reclaim VAT on start-up costs, but only from a current date.
The standard rate of VAT is 23%, and there are reduced rates of 13.5% and 9%. Once you are registered, you file a VAT return every two months. It is due by the 19th of the following month, or the 23rd through ROS.
Expenses, records and registering
Revenue lets you deduct expenses that are directly related to running the business. Its examples:
- goods bought for resale
- employees' pay
- rent and bills for your business premises
- running costs or lease payments for vehicles and machines you use in the business
- accountancy fees
- interest on money borrowed for the business
You cannot deduct your own pay, business entertainment or ordinary clothing. Money spent on equipment is not deducted either, though you may be able to claim capital allowances on it. Where something is used for both business and private purposes, you claim the business part only.
Keep your records for six years. If you have not started yet, see how to register as self-employed with Revenue and the other steps that come before your first sale.
Budget 2027 is on Tuesday 6 October 2026. It may change income tax bands, tax credits and USC from 1 January 2027. The rise in Class S PRSI to 4.35% on 1 October 2026 was set before this Budget. Everything on this page is the 2026 position.
Common questions
How much tax do I pay if I am self-employed in Ireland?
In 2026 you pay income tax at 20% on the first €44,000 if you are single and 40% above that, USC at rates from 0.5% to 8%, and Class S PRSI at 4.2375%. A single person can set €4,000 of tax credits against the income tax. On a profit of €40,000 with no other income, that comes to about €6,430.
Do I have to pay preliminary tax in my first year of self-employment?
Often not. Revenue says a payment may not be required in your first year in self-assessment, because you can base it on the previous year's liability, which is normally nil. The tax for that first year is then due in full by 31 October of the following year, along with preliminary tax for the second year.
What does Class S PRSI entitle me to?
It covers the State Pension (Contributory), Maternity, Paternity, Adoptive and Parent's Benefit, Carer's Benefit, Invalidity Pension, Partial Capacity Benefit, Treatment Benefit, Jobseeker's Benefit (Self-Employed), the bereavement and guardian's payments, and the Benefit Payment for 65 Year Olds. It does not cover Illness Benefit. Each payment has its own conditions as well.
When do I have to register for VAT?
When your turnover in a calendar year goes over €42,500 if you supply services, or €85,000 if you supply goods. Below those figures registration is optional. Other thresholds apply if you buy from or sell to other countries, so check Revenue's list.
What happens if I miss the 31 October deadline?
A late return carries a surcharge: 5% of the tax due, up to €12,695, if it is less than two months late, and 10%, up to €63,485, after that. Revenue also charges interest on late payments for each day. Paying and filing through ROS extends the 2026 deadline to 18 November.
I have a job and a side business. Do I need to register as self-employed?
Revenue says you must register for self-assessment if your taxable income from outside PAYE is more than €5,000 a year, or the gross amount is more than €30,000. Below that, you declare it on a Form 12 in myAccount. Your PAYE credit and the Earned Income Tax Credit together are capped at €2,000.
Keep reading
Where this comes from
- Revenue, Tax rates, bands and reliefs
- Revenue, Standard rates and thresholds of USC
- Revenue, Universal Social Charge overview
- Revenue, Other rates of USC
- Revenue, Reduced rates of USC
- Revenue, Earned Income Credit
- Revenue, What is preliminary tax?
- Revenue, Pay and file system
- Revenue, Who should register for Income Tax self-assessment
- Revenue, VAT thresholds
- Revenue, Current VAT rates
- Revenue, When VAT becomes payable
- Revenue, Claiming a deduction for expenses
- Revenue, Keeping records
- gov.ie, PRSI: Pay Related Social Insurance
- gov.ie, Operational Guidelines: PRSI for the Self-Employed
- Citizens Information, Class S PRSI
- Citizens Information, Tax for self-employed people
Checked on 3 October 2026. We are an independent guide, not a government service. Rules change, so confirm the detail on the official page before you apply.