Who qualifies
Anyone whose earnings are taxed under the PAYE system, including most employees, company directors paid through payroll, and Irish state pensioners taxed at source.
How to claim
Revenue assigns this credit on your RPN once your employment is registered in myAccount under Jobs and Pensions. You can confirm it by clicking Manage Your Tax 2026 and viewing the credits attached to your live employment.
Detailed explanation
The Employee Tax Credit, often still called the PAYE Credit, exists to recognise the difference between employees and the self-employed. From 2026 the credit is set at 2,000 euro per year per qualifying employment. It mirrors the Earned Income Credit available to the self-employed, ensuring rough parity between the two cohorts after years of historical imbalance. To qualify you must have earnings subject to PAYE in the relevant year. Proprietary directors with a shareholding of more than 15 percent in their company do not qualify for the PAYE credit on the income from that company; they instead get the Earned Income Credit. The credit is not duplicated where a person has multiple employments: it is granted once per individual, although Revenue typically allocates the full credit to the main employment via the RPN and the second employment is taxed without it. Spouses or civil partners are each entitled to their own PAYE credit if both earn employment income, even under joint assessment. The credit cannot reduce tax below zero and is not refundable. If you start work mid-year, you still receive the full annual credit on a cumulative basis, which often produces a refund through your first few payslips because the unused months of credit accumulate. Revenue automates this once your start date is in the system. If you stop work mid-year and do not take up another job, you can request a Statement of Liability after year end to reclaim any unused credit against tax already paid.
Worked example
Conor starts a job in May 2026 on 40,000 euro. By year end he has earned 32,000 euro. Tax at 20 percent on 32,000 is 6,400 euro. His Personal Credit (2,000) plus PAYE Credit (2,000) leave 2,400 euro tax. USC and PRSI add about 2,500 euro, leaving net pay around 27,100 euro on his 32,000 gross.