Budget 2027 for cafés: minimum wage, PRSI, tax and VAT

For a café, the national minimum wage is €14.94 an hour from 1 January 2027, and the higher-rate employer PRSI threshold rises from €552 to €600 a week for 2027, which the Minister for Finance said is to ease the PRSI impact of the wage rise. Neither the Minister's Budget statement nor Citizens Information's summary mentions a change to the 9% food and catering VAT rate. The Department of Enterprise says Local Enterprise Offices get an extra €4.5 million for energy efficiency and a €500 million loan scheme will be made available.

What does Budget 2027 mean for a café in Ireland?

Budget 2027 was announced on 6 October 2026, according to the gov.ie statement dated that day. Citizens Information says the national minimum wage rises by 79 cents to €14.94 an hour from 1 January 2027, and the Minister for Finance says the employer PRSI threshold rises for 2027 to soften the impact on employers.

The income tax bands, tax credits and USC band also change. The summaries I read do not mention the 9% VAT rate. There is some money for energy-efficiency work and lending. The sections below take each in turn.

What is the minimum wage in Ireland from January 2027?

It is €14.94 an hour from 1 January 2027. Citizens Information says: "The national minimum wage will increase by 79 cents to €14.94 per hour from 1 January 2027."

The rate for 2026 is €14.15. As a worked example of our own, not an official figure, a 39-hour week at €14.94 is €582.66 gross. The 2027 rates for staff under 20 were not in the Budget summary I read. Our guide to the 2026 minimum wage for café staff covers the current rates, including the under-20 rates, and why tips do not count.

What is the employer PRSI threshold for 2027, and why was it raised?

It is €600 a week for 2027, up from €552. Citizens Information says: "The weekly income threshold for the higher rate of employer's PRSI will increase from €552 to €600 per week to ensure that there is no incentive to reduce the working hours for a full-time employee on the increased minimum wage from 1 January 2027."

The Minister for Finance gives a second reason in his statement: "to support SMEs and ease the PRSI impact on employers from an increase in the National Minimum Wage". The Department of Enterprise, Tourism and Employment describes it as helping "to manage labour cost pressures while supporting sustainable wage growth".

As a worked example of our own: 39 hours at €14.94 is €582.66 a week, which is under the new €600 threshold. I have left out the PRSI percentages because the sources I read do not give them. Your accountant or Revenue can say what applies to your payroll.

Did Budget 2027 change the VAT rate for cafés and restaurants?

Neither the Minister's Budget statement nor Citizens Information's summary mentions a change to it. The rate for food and catering is already 9%.

The Department of Finance said on 30 June 2026 that the 9% rate would be reintroduced from 1 July 2026. It said the measure was announced in Budget 2026, reduces the rate from 13.5% to 9% for food and catering and hairdressing businesses, and "establishes the 9% VAT rate for these supplies on a permanent basis". The Budget 2027 statement names VAT changes only on respiratory vaccines for livestock, from 23% to 9%.

What income tax and USC changes come in for staff in 2027?

Citizens Information lists these income tax and USC changes: the standard rate income tax band, the amount you can earn before the higher rate starts, rises by €2,500 to €46,500 for a single person, with proportionate increases for married couples and civil partners. The Personal Tax Credit, Employee Tax Credit and Earned Income Tax Credit each rise by €125 to €2,125. And the 2% rate band limit for USC rises to €30,300 from €28,700.

Is there any Budget 2027 support for small businesses' energy costs or borrowing?

There is some, through two measures. The Department of Enterprise, Tourism and Employment says: "Local Enterprise Offices will receive an additional €4.5 million to help small businesses cut costs through energy-efficiency investments, and a further €500 million will be made available through the Growth and Sustainability Loan Scheme, which will help unlock long-term lending for businesses."

The first is money to the Local Enterprise Offices, so ask your own office what it offers and who qualifies. I did not find an energy bill credit for businesses on the official pages I read, and I have not covered anything that is not listed there.

Sources

• Citizens Information, Budget 2027, read 9 October 2026.
• gov.ie, Statement by Tánaiste and Minister for Finance on Budget 2027, 6 October 2026, read 9 October 2026.
• gov.ie (Department of Finance), Government Marks Reduction of VAT Rate to 9% for Food Businesses and Hairdressers, 30 June 2026, read 9 October 2026.
• Department of Enterprise, Tourism and Employment, Budget 2027 delivers €1.3 billion for Enterprise, Tourism and Employment, 7 October 2026, read 9 October 2026.

A summary of announced measures, not tax advice. Check with Revenue or your accountant before you act on any figure. Cupán Studio builds websites for Dublin cafés.