M.A. WHATELY Sole trader or company? Estimate for the 2026 tax year
Estimate for the 2026 tax year
Enter your profit to compare.
Sole trader take-home
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Company take-home
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Where the profit goes
The breakdown
| For the year | Sole trader | Company |
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Before you decide
This is an estimate, and tax is only part of the answer
The figures use the published 2026 rates and the simple assumptions listed below. Your own answer can change with other income, expenses, capital allowances, how and when you take money out, and how long you plan to run the business.
Tax is rarely the whole reason to form a company. Weigh up:
- Liability: a company's debts are usually its own, though banks often ask directors for personal guarantees.
- Paperwork: a company files accounts and an annual return with the CRO every year, runs payroll and has directors' duties.
- Funding: some lenders, grants and investors prefer a company.
- Getting money out later: profit left in the company is taxed again when you take it out, by salary, dividend or on closing.
What the estimate assumes
- Tax year 2026, using rates from Budget 2026. Income tax bands and credits are the same as 2025; the USC 2% band now runs to €28,700.
- Profit means taxable trading profit, after expenses and capital allowances. You have no other income, apart from your spouse or partner's pay if you entered it.
- Sole trader: income tax with the personal and Earned Income credits, USC (with the 3% surcharge on self-employed income over €100,000) and Class S PRSI. PRSI rose from 4.2% to 4.35% on 1 October 2026, so 2026 income uses Revenue's blended 4.2375%, with a minimum of €650 once income reaches €5,000.
- Company: corporation tax at 12.5% on trading profit after salary, employer PRSI, pension and running costs. Dividends come only from this year's profit after tax and are taxed as your income, with USC and PRSI. Dividend withholding tax of 25% is taken first and credited against your tax, so it does not change the total.
- Directors who own 50% or more pay Class S PRSI on salary and dividends, and the company pays no employer PRSI on them. Under 50%, this estimate uses Class A on salary (paid evenly each week, with employer PRSI) and PRSI on dividends over €5,000.
- Pension: as a sole trader, relief from income tax only, up to the age-related limit on earnings of up to €115,000; any excess can be carried forward. Through the company, the same amount is paid by the company as an employer contribution, which reduces corporation tax and is not taxed on you. Employer contributions to a PRSA above 100% of salary are taxed as a benefit.
- Close company surcharge: not included. A close company pays a 20% surcharge on investment and rental income it doesn't pay out, and a professional service company pays 15% on half of the trading income it doesn't pay out. Ask about this if you plan to keep profit in the company.
- Preliminary tax: a sole trader pays the year's income tax, USC and PRSI by 31 October, at least 90% of this year's or 100% of last year's. Companies have their own preliminary corporation tax dates.
- Running a company: the extra yearly cost above is your own figure. The CRO charges €20 to file the annual return online, and most small companies can claim audit exemption if they file on time.
- Figures are rounded to the nearest euro. A difference under €500 a year is shown as about the same.
Sources
Rates checked on . General information only, not tax advice for your situation.