Average incomes will increase marginally in the New Year as a result of changes in the income tax system.

Payroll services firm ADP said someone earning an average monthly salary of €3,704 before tax will take home an extra €26 as a result of the lower rate of income tax dropping from 35.82% to 35.75%.

People on the lowest incomes will also benefit from an increase in the minimum wage from €14.40 to €14.71 an hour, meaning they receive an extra €46 if they work 36 hours a week.

Those earning double the average wage will receive €37 a month extra, while the increase for people on three times the average salary will be €16.

The upper income tax rate is going up to 49.5%, but the earnings threshold is also rising, so people on middle incomes will reach it less quickly.

Those who earn between €1,000 and €2,000 a month – mostly part-time workers and people under 21 who do not qualify for the full minimum wage – saw their incomes go down this year, but that will be corrected in 2026, ADP tax law expert Karin Stam said.

“They would have gone down again this year, but a correction to the 2026 tax plan means they will be better off in the new year than they were in 2025. But they will still have less left over in 2026 than in 2024,” she said.

Pensioners will also see a small increase in their income, mainly because healthcare contributions (Zvw) are going down from 5.26% to 4.85%. A pensioner earning €1,000 a month will gain €5, while someone receiving €2,500 will get an extra €12.