PRSI Is Rising in October 2026. Have You Told Your Payroll Clients Yet?

The Department of Social Protection has set out the phased PRSI increase schedule, and from the 1st of October 2026, both employee and employer PRSI rates increase by 0.15% as part of the planned incremental rise towards a 6% employee rate.

If you run payroll for 40 employer clients and none of them know this is coming, that’s 40 conversations to have, 40 payroll configurations to update, and 40 sets of September payslips to get right before the change takes effect.

The practices and bureaus that handle this well will have communicated with clients in June or July, confirmed the software is ready to apply the new rates from October, and used the change as a natural touchpoint with every payroll client on the book. The ones that handle it badly will discover the rate change when an employee queries their October payslip.

What exactly is changing from the 1st of October 2026?

The PRSI increase is part of a multi-year phased programme designed to increase employer and employee contributions incrementally over several years. The October 2026 step looks like this:

The mid-year rate change: what it means for split-year payroll calculations

Payroll runs for pay periods ending before 1 October 2026 must use the existing rates. Payroll runs for pay periods ending on or after 1 October 2026 must use the new rates.

Most modern payroll software handles changes like this automatically, applying the rate change from the correct date without manual intervention (provided the software is updated in advance of the October payrolls). The risk lies in payroll software that hasn’t been updated, or in manual payroll adjustments that apply the wrong rate for pay periods around the transition date.

What should bureaus tell payroll clients before October?

The communication to clients doesn’t need to be complex, but it does need to be proactive and timely.

Employers need to understand:

• What the rate change is and when it takes effect

• What impact it will have on their payroll costs

• That the change is applied automatically by the payroll software from the correct date, so no manual action is required from them

• That the increase in employee PRSI will show on employees’ payslips from October, and some employees may query it (the employer should be prepared to explain the change)

For clients with a significant number of Class A employees, the employer PRSI increase has a real cost impact. A client with 20 employees on average earnings of €45,000 per year will see their annual employer PRSI bill increase by approximately €2,700 from October 2026 onwards. That’s not a large number, but it’s the kind of figure an accountant should communicate proactively rather than leave the client to discover in their October payroll run.

The longer phased increase: Planning ahead for employer clients

The direction of travel is clearly towards a higher sustained PRSI rate for both employers and employees. If you have any clients who are doing workforce planning, salary budgeting, or business valuations, they should factor the phased increases into their cost projections.

How does BrightPay by Bright handle the October PRSI rate change?

BrightPay by Bright is payroll software that’s always up to date and ahead of each Irish legislative payroll change, including mid-year rate adjustments like the October PRSI increases. The updated PRSI rates and revised income thresholds are applied automatically from the 1st of October 2026 within the payroll calculation, without requiring bureaus to manually update rate tables for each client. For bureaus running payroll for dozens or hundreds of employers, that automated update eliminates the risk of running post-October payrolls at the wrong rate due to a configuration lag.

For more on how BrightPay handles Irish payroll legislative changes at bureau scale, see our guide to managing payroll bureau services at scale.

How does BrightPay by Bright compare to alternatives for Irish payroll bureau management?

BrightPay by Bright is differentiated by its bureau-first design. It’s been built specifically for practices running multiple clients, with automated employee self-service, employer and manager portals, and direct integration with BrightBooks to easily send payroll journals to the general ledger in your bookkeeping software.

BrightPay by Bright is payroll software that will automatically apply the October 2026 PRSI rate changes across every client in the bureau, with no manual rate configuration required. Book a demo below to see how the bureau payroll workflow handles mid-year legislative changes at scale.

This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.