New PRSI Rates and Thresholds
A Guide to the 2025–2028 Changes
The Government has introduced a series of phased PRSI increases under the Social Welfare (Miscellaneous Provisions) Act 2024, affecting employees, employers and self-employed individuals from 2025 onwards. These changes are designed to support the long-term sustainability of the State Pension and will impact payroll, employer cost planning and self-assessment calculations over the coming years.
PRSI Rate Increases
Since 1 October 2025, the Social Welfare (Miscellaneous Provisions) Act 2024 has increased PRSI rates (for both employees and employers) by 0.1% across all PRSI Classes and Subclasses, excluding those with a Nil liability.
The employee PRSI rate under Class A is now 4.2%. The higher employer PRSI rate under Class A is 11.25%, and the reduced employer rate is 9%.
Any taxable payments processed through payroll are liable to PRSI at the rate in force on the date the payment is made, regardless of when the income was earned. The current rates apply to all payments made on or after 1 October 2025.
In addition, the Social Welfare (Miscellaneous Provisions) Act 2024 provides for the following phased increases in PRSI rates for all PRSI Classes and Subclasses (excluding those with a Nil liability) from 2026 to 2028, in order to support the retention of the State Pension age at 66:
Date – Increase
1 Oct 2026 – 0.15%
1 Oct 2027 – 0.15%
1 Oct 2028 – 0.2%
With effect from 1 October 2026, the employee PRSI rate under Class A will be 4.35%. The higher employer rate will increase to 11.4%, and the reduced employer rate will increase to 9.15%.
2. Increase in the Employer PRSI Class A Threshold
With effect from 1 January 2026, the Social Welfare Bill 2025 provides for an increase in the threshold for the higher employer PRSI rate under Class A to €552 per week, €1,104 per fortnight and €2,392 per month (previously €527 per week, €1,054 per fortnight and €2,284 per month).
This threshold has been increased to ensure that employers continue to pay the reduced rate of employer PRSI under Class A for employees working up to a 39-hour week and earning the national minimum wage.
A summary of the PRSI rates effective from 1 January 2026 to 30 September 2026 is included in Appendix 2.
2.1 PRSI Rates Payable Through Self-Assessment
For PRSI Class S contributions payable outside of payroll (self-employed, voluntary and optional contributors) and for PRSI Class K payable on the unearned income of an employee who is also a chargeable person, where PRSI is payable at different rates or amounts in a contribution year, a blended rate or amount will apply to that year.
For 2025 Income Tax returns, a blended rate of 4.125% applies (calculated as 4.1% x 9 months = 36.9, plus 4.2% x 3 months = 12.6; 49.5 / 12 = 4.125%).
For 2026 Income Tax returns, a blended rate of 4.2375% applies (calculated as 4.2% x 9 months = 37.8, plus 4.35 x 3 months = 13.05; 50.85 / 12 = 4.2375%).
Class S contributions are subject to a minimum payment of €650.
These changes mean employers and individuals will need to plan for gradually rising PRSI costs between now and 2028, including adjustments to payroll systems, budgeting processes and self-assessment calculations.
If you need guidance on how these updates may affect your business or personal tax position, please get in touch.