Upcoming PRSI rate changes effective 1 October 2025 – What employers need to know

As part of ongoing government measures announced in last year’s Budget, Pay Related Social Insurance (PRSI) contribution rates will increase again, from 1 October 2025 as part of the PRSI Roadmap.

These increases will impact both employers and employees over the coming years, with further hikes planned in 2026, 2027 and 2028.

What are the key changes from 1 October 2025?

• Employee PRSI (Class A): The contribution rate will rise from 4.10% to 4.20%. Similar adjustments will apply across other PRSI classes such as B, C, D, and H.
• Employer PRSI (Class A):
  • For employees earning over €527 per week, the rate increases from 11.15% to 11.25%.
  • For employees earning less than €528 per week, the rate increases from 8.9% to 9%.
• Self-Employed PRSI (Class S): The rate will increase from 4.10% to 4.20%. For self-assessed taxpayers, a blended rate of 4.125% will apply to 2025 earnings due to the mid-year rate change.

What does this mean for employers and employees?

Employees will notice a small reduction in their net take-home pay, starting in October 2025. Meanwhile, employers should prepare for increased PRSI costs, which will affect payroll budgets and financial planning.

These changes are part of a phased approach to raise PRSI contributions over the next few years:

• 0.15% increase in 2026
• 0.15% increase in 2027
• 0.20% increase in 2028

How can employers prepare for these changes?

1. Update payroll systems
   Ensure that your payroll software and systems are updated ahead of the 1 October 2025 deadline. Most providers will release updates, but it’s essential to verify that these reflect the new rates accurately.
2. Communicate with your workforce
   Transparency is key. Inform your employees about the changes to avoid any confusion when they notice the slight reduction in their net take home pay.
3. Budget for increased costs
   The increased employer PRSI rates will add to your payroll expenses. It’s important to factor these changes into your financial planning for Q4 2025 and beyond.
4. Consult your payroll provider
   Confirm with your payroll service or provider that all automated calculations, thresholds, and deductions will be adjusted correctly from October 2025.

Need help?

If you require assistance updating your payroll systems or communicating these changes to your employees, our employment tax experts can help. Please get in touch with our team if you have any questions.