Budget day is now less than a month away. On October 7th, Budget 2026 will be decided on, and everyone in Ireland is wondering what it will mean for them.
This year, the budget will be taking place amid a backdrop of global economic and political uncertainty. There are a lot of new factors that will affect government spending- US tariffs and international conflict will no doubt weigh into the decision.
So, what can hospitality owners expect from Budget 2026? While nothing is set in stone, here is some of what we can expect:
VAT Reduction
Hospitality businesses across Ireland have been seeking a reduction in VAT for hospitality to decrease from 13.5% back to 9%. While this could be reinstated in Budget 2026, Simon Harris has made it clear that if this were the case, it would only apply to food and drink. He states the Government have ‘no intention’ of reducing VAT for hotel rooms.
The Irish Hotels Federation and Restaurants Association of Ireland have been lobbying for the VAT reduction for quite some time now, with 80% of hospitality business owners said they would have to cut hours without government action (RAI, 2025).
Wages
In 2022, the Government began plans to replace an annually-increasing minimum wage with a National Living Wage by 2026. This rate is 60% of the national median hourly rate, and currently sits at €14.75/hour.
However, earlier this year, the government confirmed that they would push the implementation of a national Living Wage back to 2029. This means that we are unlikely to see a rise in the minimum wage to €14.75, but we can still expect to see an increase to keep them on-target for their new goal in 2029.
US Tariffs
There is no doubt that US tariffs will be factored into the government’s decision making this year. Tariffs of 15% have and will impact the Irish economy in many ways, and Budget 2026 will need to plan accordingly.
Back in July, the Government stated that it would deliver a €9.4 billion budget day package- only in the case of a “no-tariff scenario”. The imposition of 15% tariffs almost certainly mean that TDs must go back to the drawing board before October 7th. It’s hard to say what will change in the face of these tariffs – only time will tell.
The Run-Down
Until October 7th, we can only speculate on what changed might be published in Budget 2026. However, we can expect it to be heavily influenced by global economics. Hopefully there will be positive supports in place to help hospitality businesses reduce costs in these turbulent times.
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