Withholding tax on professional fees: the rules now, and the planned reform

Public bodies deduct 20% from fees for professional services. Budget 2027 confirms a move to personalised rates under a new electronic system, eWHT.

Some public bodies must deduct Professional Services Withholding Tax (PSWT) from what they pay you for professional services. They are listed in Schedule 13 of the Taxes Consolidation Act and called 'accountable persons'. It covers medical, dental, pharmaceutical, optical and veterinary services, and architecture, engineering and surveying. It also covers accountancy, audit and finance; financial, economic, marketing and advertising services; and legal and geological services.

How PSWT works now

• The payer deducts 20% of the fee, excluding VAT but including expenses it reimburses, and pays it to Revenue.
• It notifies Revenue of each payment through ROS and can give you an acknowledgement as your record.
• You claim the tax deducted as a credit against your income tax for the year, in your Form 11.

Because 20% of the fees before costs is often more than the tax on the profit, many professionals have PSWT credits larger than their bill. For a consultant with €60,000 of public sector fees and a €45,000 profit in 2026:

You get credit for PSWT against the tax for the year whose profits include the fees, and any excess is refunded. You can apply for an interim refund during the year in a first year of trading, when the credit can be delayed. You can also apply in cases of hardship. Credits also matter when you work out preliminary tax.

eWHT: the planned replacement

Revenue has consulted on a new electronic withholding tax system, eWHT. Budget 2027 confirmed the reform, subject to a commencement order. Under Revenue's published design:

• the flat 20% rate ends; individuals get a personalised deduction rate, and companies, partnerships and other entities a new lower flat rate
• payers notify Revenue before paying, and Revenue sends back the rate to apply, in real time through a direct computer link
• Revenue compiles the payer's monthly return, the annual PSWT return goes, and payment is due by the 23rd of the following month
• the same payers and services are covered as now
• self-employed people will be able to opt in to sharing information with Revenue in real time

No start date has been set. Until eWHT commences, PSWT continues to apply at 20%.

Work it out

• Sole trader tax return →
• Preliminary tax →

Sources

• Department of Finance: Budget 2027: Tax Policy Changes (checked 25/10/2026)
• Revenue: What is preliminary tax? (checked 25/10/2026)

General information, not tax advice. HeyPenny is not a tax agent.