Employee deductions
| Deduction | Rate | Limit |
|---|---|---|
| Social Insurance | 8.8% | Earnings up to €5,742 a month (€68,904 a year) |
| GESY (General Healthcare System) | 2.65% | Income up to €180,000 a year |
| Income tax | 0% to 35% | See the bands below |
Employer contributions
| Contribution | Rate | Limit |
|---|---|---|
| Social Insurance | 8.8% | Earnings up to €5,742 a month |
| GESY | 2.90% | Income up to €180,000 a year |
| Redundancy Fund | 1.2% | Earnings up to €5,742 a month |
| Human Resource Development (training) | 0.5% | Earnings up to €5,742 a month |
| Social Cohesion Fund | 2% | No limit |
| Central Holiday Fund | From 8% | Depends on the leave entitlement. Not paid by employers exempted to grant leave directly. |
Income tax bands from 1 January 2026
| Taxable income for the year | Rate |
|---|---|
| Up to €22,000 | 0% |
| €22,001 to €32,000 | 20% |
| €32,001 to €42,000 | 25% |
| €42,001 to €72,000 | 30% |
| Over €72,000 | 35% |
The 2026 reform raised the tax-free amount from €19,500 to €22,000. Contributions such as Social Insurance and GESY, and allowances declared on the TD59, such as life insurance and provident fund contributions, reduce taxable income within the legal limits. The 2026 reform also introduced reliefs for children, housing and green upgrades, subject to household income limits.
A worked example
An employee earning €2,500 a month pays €220.00 Social Insurance (8.8%) and €66.25 GESY (2.65%). Income tax depends on the whole year's income and allowances. The employer pays €220.00 Social Insurance, €72.50 GESY, €30.00 to the Redundancy Fund, €12.50 for training and €50.00 to the Social Cohesion Fund, plus the Holiday Fund if it applies.
Filing and paying
- Social Insurance and the employer funds are reported and paid through SISnet each month, by the end of the following month.
- Income tax withheld is paid to the Tax Department each month, by the end of the following month.
- After the year end, each employee receives an IR63 certificate of earnings and deductions, and the employer files the annual return.
This guide is general information, checked against official sources in October 2026. It is not tax advice. Rules change, so confirm with the Tax Department or your adviser before you act.
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