Pay
How a bonus is taxed in Ireland
Last updated 16 October 2026
A bonus is taxed as ordinary pay at your top rates. On a €60,000 salary, a €10,000 bonus leaves €5,280.00 in 2026.
There is no separate bonus tax in Ireland. A cash bonus is pay, so it is taxed through PAYE with income tax, USC and PRSI in the pay period it's paid. Because it sits on top of your salary, it is taxed at your highest rates.
Two examples for 2026
| Bonus | €10,000.00 |
| Income tax at 40% | (€4,000.00) |
| USC at 3% | (€300.00) |
| PRSI at 4.2% | (€420.00) |
| You keep | €5,280.00 |
| Bonus | €5,000.00 |
| Income tax at 20% | (€1,000.00) |
| USC | (€150.00) |
| PRSI | (€210.00) |
| You keep | €3,640.00 |
The lower earner keeps more because the bonus stays inside the 20% band. If a bonus pushes you over the band, only the part above it is taxed at 40%.
Why the bonus payslip looks worse
On the cumulative basis, your employer only has the credits and 20% band for the months so far. A large bonus early in the year can push more of that month's pay into 40% than will finally be due. The extra tax isn't lost: your next payslips take less until the year evens out.
The month matters for PRSI
PRSI is charged at the rate on the day you're paid. A €10,000 bonus paid in December 2026 pays €435.00 PRSI at 4.35%, against €420.00 in June at 4.2%. PRSI is also worked out on each week's pay, so a bonus can cancel the small PRSI credit lower earners get that week.
Paying some into your pension
Your employer may let you put part of a bonus into your pension as an Additional Voluntary Contribution (AVC). That part gets income tax relief at your top rate, within the age-related limits. USC and PRSI are still charged. Putting €5,000 of that €10,000 bonus into a pension cuts the income tax on it to €2,000.00. You keep €2,280.00 in cash plus €5,000 in your pension.
Vouchers instead of cash
Up to five gift vouchers or other non-cash rewards, worth up to €1,500 a year in total, are tax-free under the small benefit exemption. Cash, or anything that can be turned into cash, is always taxed.
Work it out
Sources
- Revenue: Tax rates, bands and reliefs (checked 25/10/2026)
- Revenue: Standard rates and thresholds of USC (checked 25/10/2026)
- Department of Social Protection: PRSI 2026 Contribution Rates and User Guide (SW 14) (checked 25/10/2026)
- Revenue: Cumulative basis (weekly credits and cut-off points, worked examples) (checked 16/10/2026)
- Revenue: Tax relief limits on pension contributions (checked 25/10/2026)
General information, not tax advice. HeyPenny is not a tax agent.