Self-Employed Tax in Ireland 2026: Income Tax, USC, PRSI and What to Set Aside

For a sole trader, the most important number is usually not turnover. It is taxable profit.

A business can collect €100,000 from customers without having €100,000 available to tax personally. Allowable business costs come first. Income Tax, USC and Class S PRSI are then calculated using the tax rules that apply to the resulting profit and the person’s wider circumstances.

For a quick 2026 estimate, use the Self-Employed Tax Calculator Ireland.

If you are assessing what happens when illness prevents you earning, see our Income Protection Insurance Ireland guide for self-employed eligibility, deferred periods and the tax treatment of qualifying premiums.

If you are deciding between employment and contracting rather than simply calculating a sole trader bill, the Contractor vs Salary Calculator compares indicative net cash outcomes. The tax credits guide is also useful for understanding why employee and self-employed credit mechanics differ.

Turnover, expenses and profit

Suppose a sole trader has:

• €80,000 of gross business receipts; and
• €15,000 of allowable business expenses.

The starting business profit is:

€80,000 − €15,000 = €65,000

That is not automatically the final taxable figure on a Form 11. Capital allowances, losses, other income and other tax rules may change the position.

But it is a much better starting point than applying a tax percentage directly to turnover.

What counts as an allowable expense?

The general principle is that an expense must satisfy the tax rules for deductibility in the business.

Common areas that can require care include:

• costs with both private and business use;
• motor and travel expenses;
• home-office expenses;
• equipment and other capital expenditure;
• professional subscriptions;
• insurance;
• accountancy and legal costs; and
• bad debts.

The key point for a calculator is not to guess. Enter expenses only where you have a reasonable basis for treating them as deductible.

Income Tax for a single self-employed person in 2026

For a single person without qualifying children, the 2026 standard rate band is €44,000 at 20%, with the balance generally taxed at 40%.

Tax credits then reduce the gross Income Tax bill.

A self-employed person may qualify for the Earned Income Credit. The 2026 maximum is €2,000, or 20% of qualifying earned income if that is lower.

The standard calculator scenario also includes the Single Person Tax Credit.

That means an employee and a self-employed person can have different credit mechanics even when their gross income looks similar.

USC for self-employed income

USC is separate from Income Tax.

For 2026 the standard bands are:

• 0.5% on the first €12,012;
• 2% on the next €16,688;
• 3% on the next €41,344; and
• 8% on the balance.

Self-employed income above €100,000 can also face the additional 3% USC surcharge.

Because USC has its own bands and rules, an “Income Tax rate” is not the same thing as an overall tax rate.

Class S PRSI in 2026

Many self-employed people pay Class S PRSI.

For self-assessed income in 2026, the Department of Social Protection publishes a blended Class S rate of 4.2375%, subject to the applicable minimum contribution and detailed rules.

This is one reason a flat “set aside 20%” rule can be misleading. A sole trader’s combined Income Tax, USC and PRSI liability can move materially as profit changes.

Worked example: €50,000 turnover and €10,000 expenses

Start with:

• receipts: €50,000
• allowable expenses: €10,000
• business profit: €40,000

The tax calculation then applies Income Tax, credits, USC and PRSI to the relevant bases.

At this profit level, the Income Tax calculation remains within the standard-rate band before credits, but USC and PRSI still matter.

Use the Self-Employed Tax Calculator Ireland to see the current estimate rather than relying on a rough percentage.

Worked example: €80,000 turnover and €15,000 expenses

Profit before personal taxes is €65,000.

Part of that profit can fall into the 40% Income Tax band for a single person before credits are applied.

The calculator separately displays:

• estimated Income Tax;
• USC;
• Class S PRSI;
• total estimated personal tax;
• effective tax rate;
• net income; and
• a monthly tax-reserve estimate.

That separation is useful because “my tax is 40%” is rarely an accurate description of the effective rate on the entire annual profit.

How much should a sole trader set aside for tax?

There is no universal percentage.

Someone with €25,000 of profit and someone with €120,000 of profit are not in the same position. Pension contributions, other income and credits can also change the answer.

A better method is:

1. estimate expected annual taxable profit;
2. calculate the likely annual Income Tax, USC and PRSI;
3. subtract tax already paid or credits genuinely available;
4. divide the remaining expected liability into a regular reserve; and
5. update the estimate when profit changes.

The calculator’s monthly reserve simply divides the modelled annual tax charges by 12. It is a cash-planning number, not a preliminary-tax calculation.

Preliminary tax and the Form 11

Self-assessed taxpayers need to think about filing as well as the final annual liability.

A Form 11 can contain much more than the simple calculator model: other income, losses, capital allowances, married-person treatment, tax already paid and additional reliefs.

Preliminary tax can also create a cash-flow challenge because a taxpayer may be paying an amount toward the current year while settling the previous year’s final liability.

That is why the amount in a separate tax savings account should not be treated as spare business cash.

Pension contributions for the self-employed

A qualifying personal pension contribution can reduce Income Tax within Revenue’s relief limits.

The percentage of earnings eligible for relief depends on age, and the earnings figure used for the limit is capped at €115,000 a year.

For example, a person aged 35 falls within the 30–39 age band. The age-related percentage limit is 20%.

The Self-Employed Tax Calculator Ireland includes an Advanced mode that restricts the pension contribution receiving Income Tax relief to the age-related limit and earnings cap.

It does not reduce USC or PRSI for the pension contribution.

For the wider rules, see our guide to pension tax relief in Ireland.

Sole trader versus limited company

This calculator is designed around an individual self-employed profit calculation.

A limited company is a separate legal and tax structure. Corporation Tax, salary, dividends, employer PRSI, pension contributions and extraction of profits can all change the analysis.

Do not use a sole-trader calculator to decide whether incorporating would reduce tax without modelling the company structure separately.

Frequently asked questions

How much tax does a sole trader pay in Ireland?

There is no single fixed rate. The overall bill can include Income Tax, USC and Class S PRSI, and the effective rate changes with profit, credits and reliefs.

Do I pay tax on self-employed turnover?

Taxable profit, rather than gross turnover itself, is the key starting point. Allowable business expenses reduce business profit before personal taxes are calculated.

What is the Earned Income Credit in 2026?

The maximum Earned Income Credit is €2,000 for 2026, subject to the qualifying-income calculation.

Do self-employed people pay USC?

Yes, USC can apply to self-employed income under its own bands and thresholds. Higher self-employed income can also attract the additional USC surcharge.

Do sole traders pay PRSI?

Many sole traders and other self-employed people pay Class S PRSI, subject to the relevant rules.

Can a pension reduce self-employed tax?

A qualifying pension contribution can reduce Income Tax within Revenue’s age and earnings limits. It does not reduce USC or PRSI in the model used by Compound.

Is the tax calculator the same as a Form 11?

No. It is a planning estimate. A Form 11 is the actual tax return and can include items well beyond the calculator’s scope.

The number worth watching

For day-to-day business decisions, turnover is useful. For personal cash planning, profit after business costs and the estimated tax reserve is usually more informative.

Run the Self-Employed Tax Calculator Ireland whenever expected profit changes materially, rather than waiting until the tax deadline to discover the size of the liability.

Related tax guides

If you are comparing self-employment with PAYE work, the Take-Home Pay Calculator gives the employee-side benchmark. For the wider Irish tax system, see Tax credits in Ireland explained and Ireland’s 40% tax band starts at €44,000 — how that really compares with Europe.