PAYE, USC and PRSI: what actually comes off your payslip

Every payslip in Ireland shows the same three deductions between your gross and net pay, and they work differently from each other: PAYE income tax, USC, and PRSI. Here's what each one actually does, with a worked example at the end.

Income tax (PAYE)

Your income is taxed in two bands: 20% on the first €44,000 (as a single person) and 40% on everything above that. That 40% only applies to the portion over €44,000 — not your whole salary, which is the most common misunderstanding about "moving into the higher tax bracket."

Before you pay a cent, tax credits are subtracted from what you'd owe. A single PAYE employee gets €4,000 in credits for 2026 (€2,000 personal credit + €2,000 employee/PAYE credit), plus anything extra you're entitled to — see our guide to claiming more credits.

USC (Universal Social Charge)

USC is separate from income tax and has its own bands, applied to almost all income with no credits to offset it:

• 0.5% on the first €12,012
• 2% on the next portion, up to €28,700
• 3% on the next portion, up to €70,044
• 8% on anything above €70,044

If your total income for the year is €13,000 or less, you're exempt from USC entirely — it isn't just the first band, the whole charge drops away.

PRSI

Most employees pay Class A PRSI at 4.35% of gross pay. If you earn €352 or less in a given week, you pay no PRSI that week at all — it's a genuine exemption below the threshold, not a reduced rate.

Worked example: €50,000 salary

That's roughly 79% of gross pay taking home, once all three deductions are applied — higher than most people guess when they only think about the "40% tax bracket."