Temporary PRSI rebate for small businesses needed in Budget 2026 to tackle high labour costs

The Small Firms Association (SFA), Ireland’s leading voice for the small business community, has renewed its call to for the Government to introduce a temporary PRSI rebate in the forthcoming budget. Today, the SFA published its Budget 2026 submission which includes range of policy request aimed at reducing costs, lowering taxes easing regulation and fostering recruitment to small businesses.

The SFA’s recent Small Business Survey, conducted by Amárach showed that business costs remain a challenge for many small businesses with an average increase in costs at 11.7% in the past 12 months, among the businesses that have experienced increased costs. Labour-related costs remain the biggest challenge with 31 percent of all businesses reporting that employment costs have increased in the past 12 months, however that is a decline from 48 percent of all businesses in last year’s survey, which was referenced in its 2026 Budget submission.

Some of the other measures recommended by the SFA include the following:

• Improved access to finance for small business and small business startups to bank and non-bank finance, via the Strategic Banking Corporation of Ireland and Micro Finance Ireland schemes.
• Financial support to help small business owners on the essential digitisation journey to help with competitiveness and improve efficiencies.
• Reduction of the general Capital Gains Tax (CGT) rate from 33% to 20%. However, consideration could also be given to the introduction of a CGT Tapering relief in addition to Revised Entrepreneur’s Relief.
• Simplification of the claiming and the administration procedure for the R&D Tax credit.
• A significant annual subvention of €600 million annually to offset energy system charges and the PSO levy, reduce costs and bring Ireland into line with European norms.
• Increase the Small Benefit Exemption up to a value of €2,000 per annum and remove the reference to 5 benefits in a year.
• A reduction in VAT related to the hospitality sector, particularly related on the provision of foods and non-alcoholic drinks.
• Through unlocking the €1.5 billion surplus of the National Training Fund, the SFA wants to strengthen small business owners’ leadership, management capabilities through productivity-boosting training provided by the MentorsWork programme.

Commenting on the pre-budget submission, SFA Director David Broderick said:

“Small business owners need the tax system to give some relief without significant cost to the exchequer. Punitive taxes and burdensome regulations are impacting are putting a financial and time-consuming strain on entrepreneurs who are the lifeblood of many communities.

“High business costs remain a critical issue, so the time for the Government to live up to its commitments in the Programme for Government has arrived. A temporary PRSI rebate for businesses that employ up to 50 people must be included in Budget 2026 to give small business owners a chance to remain viable.

“The SFA was encouraged by the Programme for Government commitments to small business owners and the subsequent establishment of the Cost of Business Advisory Group. However, high business costs remain a challenge as outlined in the SFA’s recent Small Business Survey which is why Budget 2026 must include measures to tackle high business costs through a more creative tax system as outlined in the SFA’s budget recommendations.”

ENDS

Note to Editor:

• Please see the full pre-budget submission here.
• The Small Firms Association proudly represents a diverse membership of businesses employing up to 50 employees: homegrown and spanning every sector of the economy with members found in every town and every city in Ireland.
• SFA Director David Broderick is available for interviews. For more information and to arrange more interviews, please contact SFA Public Affairs Lead, Jonathan McDade at jonathan.mcdade@sfa.ie or 0876253551