The taper purpose
Employee PRSI starts once weekly earnings go above €352. Earn €352 or less in the week and you pay no employee PRSI at all, even though you are still a Class A worker and still building insurable weeks. Go one cent over and the 4.2 percent is charged on the whole of your pay, not on the excess, which without relief would be a cliff edge of nearly €15 for one cent of extra earnings. The taper credit is what smooths it.
How the credit works
Maximum credit: €12 per week.
The credit is €12 at €352.01, and is reduced by one sixth of your weekly earnings over €352.01, reaching zero at €424 per week.
Formula:
- Credit = €12 minus ((Pay minus €352.01) divided by 6)
- If pay is €352 or less: no employee PRSI is due, so there is nothing to credit
- If pay is €424 or more: no credit
Worked example, €352 weekly
Pay: €352
- Standard PRSI: nil. This is at or below the €352 entry point, so no employee PRSI is charged
- Credit: not applicable
- Net PRSI: €0.00
Your employer still pays employer PRSI on this pay, and the week still counts towards your contribution record.
Worked example, €352.01 weekly
Pay: €352.01, one cent over the entry point and the maximum-credit case
- Standard PRSI: €352.01 x 4.2 percent = €14.78
- Credit: €12
- Net PRSI: €2.78
Worked example, €388 weekly
Pay: €388
- Standard PRSI: €388 x 4.2 percent = €16.30
- Credit: €12 minus ((€388 minus €352.01) / 6) = €12 minus €6.00 = €6.00
- Net PRSI: €10.30
Worked example, €424 weekly
Pay: €424
- Standard PRSI: €424 x 4.2 percent = €17.81
- Credit: €0
- Net PRSI: €17.81
Important detail, employer PRSI is not credited
The credit reduces only employee PRSI. Employer PRSI continues at the full rate (9.00 percent at or below €552, 11.25 percent above; 9.15 and 11.40 percent respectively from 1 October 2026).
How it appears on payslips
Most payroll systems calculate PRSI net of credit and show only the final figure. Some itemise the credit on a separate line.
Why the figures matter
Without the credit, one cent of extra pay at the €352 entry point would cost €14.78 a week, because the 4.2 percent is charged on all of the pay rather than on the part above the threshold. The credit cuts that to €2.78, so crossing the entry point costs a couple of euro rather than the price of two hours' work.
Educational notice
This article describes the 2026 PRSI taper credit at the time of writing. The 4.2 percent employee rate has applied since 1 October 2025 and rises to 4.35 percent on 1 October 2026. Always verify current parameters with the Department of Social Protection or Revenue.ie.