The Government's proposal includes adjustments to IRS income brackets, the minimum income threshold and the specific tax deduction.

Simulations prepared by consultancy EY for ECO show that a single person without children earning a gross monthly salary of €1,500 could save an additional €36.57 in 2027. Their annual net income would reach approximately €16,272.

For someone earning €2,500 a month, the estimated saving rises to €160.01, while a single taxpayer earning €5,000 could benefit from an additional €334.23.

Proposed changes

The calculations also show how the proposed changes could affect married couples.

A couple without children, with both partners earning €2,000 per month, could save a combined €158.65 in 2027.

For a couple with one child, where each partner earns €4,000 per month, the estimated annual saving would be €668.45.

For those on higher salaries, the savings could be greater. EY estimates that a couple with two children, both earning €10,000 a month, could pay around €1,397 less in tax in 2027, which works out at approximately €698 each.

These figures relate specifically to the changes proposed for 2027 and are separate from the additional IRS reductions expected to take effect in 2026.

For example, EY estimates that a single taxpayer earning €1,500 a month could save €65.38 under the 2026 changes, followed by a further €36.57 in 2027.

Rates system

Although the Government is planning adjustments to the tax system, the proposed measures for next year do not involve a further reduction in the effective IRS tax rates.

The State Budget proposal will face its first parliamentary vote on 28 October, followed by further discussions and a final vote scheduled for 24 November.

Until the budget is approved, the figures remain estimates based on the Government's proposal.

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