Whether you are a sole trader, freelancer, or contractor, your self-employed income is subject to income tax at 20%/40%, Universal Social Charge, and PRSI Class S. Getting your expenses and preliminary tax right is essential to avoiding penalties.
Your net profit (revenue minus allowable business expenses) is added to any other income you have and taxed at the standard rate of 20% up to the standard rate band (EUR 44,000 for a single person in 2026), with the balance at 40%. USC applies on the full income (with a 3% surcharge on income over EUR 100,000 for self-employed individuals). PRSI Class S applies at 4.2% (rising to 4.35% from 1 October 2026), with a minimum contribution of EUR 650.
Self-employed individuals can claim the earned income tax credit of EUR 2,000 (Section 472AB TCA 1997). This is separate from the PAYE employee credit. If you have both employment and self-employment income, you can claim both credits, but the combined total cannot exceed EUR 2,000 from each source.
Revenue allows deductions for expenses incurred "wholly and exclusively" for the purpose of the trade or profession. Common deductions include:
New businesses in their first 3 years can avail of income tax relief under Section 486C TCA 1997 if their total income is under EUR 40,000. The relief reduces income tax (not USC or PRSI) to nil for income up to EUR 40,000.
You must pay preliminary tax for the current year by 31 October (or mid-November via ROS). The amount is calculated as either 100% of the prior year liability or 90% of the current year liability. Getting this wrong results in interest charges.
All self-employed individuals must file a Form 11 return by 31 October (paper) or mid-November (ROS). The return covers all income sources, not just self-employment.
Full profit and loss, tax calculation, preliminary tax, earned income credit, start-up check, and Form 11 guidance. EUR 49, delivered by email.
Get Your Report - EUR 49Revenue allows deductions for expenses incurred "wholly and exclusively" for the purpose of your trade or profession under Section 81 TCA 1997. Common deductions include materials and stock, motor expenses (business proportion only, or civil service mileage rates), office rent and utilities, phone and broadband (business proportion), professional fees (accountant, solicitor, insurance), marketing costs, travel and subsistence at Revenue-approved rates, and staff costs.
You cannot deduct personal expenses, entertainment (with very limited exceptions), fines, or the personal element of mixed-use expenses. Capital expenditure (equipment, computers, vehicles) goes through capital allowances at 12.5% per year over 8 years rather than being deducted in the year of purchase.
Revenue accepts a reasonable estimate of the proportion of household costs attributable to business use. Common approaches include calculating the floor area of your workspace as a percentage of total floor area, then applying that percentage to electricity, gas, broadband, and insurance. Keep a clear record of how you calculated the proportion.
Missing or underpaying preliminary tax is the most expensive mistake a self-employed person can make. Interest runs at 0.0219% per day from the due date. On a EUR 10,000 underpayment, that is roughly EUR 800 per year in interest charges. Always use the 100% prior year method unless your income is clearly falling.
Disclaimer: This information reflects the 2026 tax year. Tax rules change annually following the Budget. Check Revenue.ie for the latest rates and thresholds. This guide is for informational purposes only and does not constitute tax advice.