# Ireland Sole Trader Quote, Two-Thirds VAT Rule & RCT Pricing Guide (2026–2027)

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- **Last Verified:** Sun Nov 01
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- **Summary:** Ireland sole trader quote and RCT pricing guide for 2026–2027: how to price day rates, apply the 13.5% vs 23% Two-Thirds VAT rule, and handle 0%/20%/35% RCT.

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# Ireland Sole Trader Quote, Two-Thirds VAT Rule & RCT Pricing Guide (2026–2027)

**Short answer: Under Ireland sole trader quote and RCT pricing rules for 2026–2027, Irish tradespeople and construction subcontractors must price three statutory layers correctly before sending a quote: (1) whether the job is for a private homeowner (where you charge 13.5% reduced VAT unless materials hit the Two-Thirds Rule, which flips the entire job to 23% VAT) or a Principal Contractor under Relevant Contracts Tax (where VAT is reverse-charged and RCT is withheld at 0%, 20%, or 35%), and (2) your true billable day rate after Income Tax, USC, and 4.2%–4.35% Class S PRSI.**

> **⚡ Instant Ireland Sole Trader Form 11, 23% VAT & RCT Toolkit (`€EUR` + `🔗 Embed / CSV Template`):** Run your Irish self-employed income tax, USC, PRSI, and VAT numbers in the **[Free Self-Employment Tax Calculator](/keel/self-employment-tax-calculator/)** or **[Free EUR Invoice Generator](/keel/invoice-generator/)**, export via **`🔗 Embed / CSV Template`**, save up to **5 free records in the [iCloud Web Workspace (5 Free Saves)](/keel/workspace/)**, or **[Download Keel on the App Store (€0/mo, No Subscription)](https://apps.apple.com/us/app/keel-invoice-maker-receipts/id6786659713?ppid=32a8b77b-3169-4642-b14e-e5c96c6a5a77&pt=127772795&ct=blog_fatura_ireland-sole-trader-quote-an&mt=8)**.

In Ireland, quoting a bathroom renovation, rewire, heat-pump installation, roofing job, or carpentry subcontract without checking **Revenue's Two-Thirds VAT Rule** and **Relevant Contracts Tax (RCT)** can wipe out 10% to 20% of your margin before you even start on site. Many sole traders either quote a homeowner at **13.5% VAT** when the material value actually forces the whole invoice onto **23% VAT**, or forget that a Principal Contractor on a commercial/housebuilding site will deduct **20% RCT** from their gross payment unless their eRCT rate is at **0%**.

This guide walks through **2026–2027 Irish tradesperson day-rate pricing, the 13.5% vs 23% Two-Thirds VAT rule, eRCT 0%/20%/35% deductions, and VAT registration thresholds (€42,500 services / €85,000 goods)**. For your annual tax return obligations, see [Form 11 in Ireland explained](/keel/ireland-form-11-explained/) and [self-employed taxes in Ireland](/keel/ireland-self-employed-taxes/).

## How do you calculate a profitable Irish sole trader day rate or hourly rate in 2026–2027?

Before you add VAT or worry about RCT, your ex-VAT labour rate has to cover three realities of working for yourself in Ireland:

1. **Only ~1,150 to 1,250 billable hours (or ~155 to 175 billable days) per year:** After driving between jobs, queuing at Chadwicks, Brooks, or CEF, pricing site walks, and doing ROS admin, a solo tradesperson bills roughly 3.5 days out of every 5-day workweek.
2. **Annual Van, Insurance & Tool Overhead (€18,000 to €28,000/yr):** Commercial van diesel, DOE/CVRT, commercial motor tax, public/employer liability insurance (€2.6m/€6.5m standard cover), Safe Electric / RGII registration, and tool replacement (see [Ireland mileage and motor expenses](/keel/ireland-mileage-and-motor-expenses/) and [Ireland expenses and receipts](/keel/ireland-expenses-and-receipts/)).
3. **Irish Self-Employed Tax Stack (Income Tax + USC + Class S PRSI):**
   - **Income Tax:** 20% standard rate up to the single standard-rate band, and **40%** on the balance (after the **€2,000 Earned Income Tax Credit** and Personal Tax Credit).
   - **Universal Social Charge (USC):** 0.5%, 2%, 3%, and 8% bands (plus the **3% self-employed USC surcharge** on non-PAYE income over **€100,000**, bringing top marginal tax to **55.35%**!).
   - **Class S PRSI Increases (2025–2027):** Under Ireland's statutory PRSI roadmap, Class S PRSI rose to **4.2%** from 1 October 2025 and increases to **4.35%** from **1 October 2026** (through 2027).

| Irish Trade / Self-Employed Role (2026–2027 Benchmarks) | Typical Billable Hourly Rate (Ex-VAT) | Typical Full-Day Rate (Ex-VAT, 1 Tradesperson) | Standard Call-Out / Diagnostic Fee (Ex-VAT) |
|---|---|---|---|
| **Registered Electrician (Safe Electric) / RGI Plumber** | **€75 – €115/hr** | **€340 – €520/day** | **€95 – €140** |
| **Carpenter / Joiner / Kitchen Fitter** | **€60 – €90/hr** | **€280 – €420/day** | **€80 – €110** |
| **Roofer / Blocklayer / Plasterer / Groundworker** | **€60 – €95/hr** | **€280 – €450/day** | Site quote |
| **Painter & Decorator / Tiler** | **€55 – €80/hr** | **€260 – €380/day** | Site quote |

## How does the Irish "Two-Thirds VAT Rule" (13.5% vs 23%) work on homeowner quotes?

When you are VAT-registered in Ireland and work directly for a private homeowner or non-RCT client (where reverse charge does **not** apply), construction, repair, plumbing, electrical, and renovation services are normally taxed at the **reduced 13.5% VAT rate**—**UNLESS** the contract breaches [Revenue's Two-Thirds Rule](https://www.revenue.ie/en/vat/vat-on-services/the-two-thirds-rule/index.aspx):

- **The Statutory Two-Thirds Rule:** If the VAT-exclusive cost of the **goods/materials** you supply in a service contract **exceeds two-thirds (66.67%)** of the total VAT-exclusive contract price, you **cannot** charge 13.5% VAT—you must charge the **standard 23% VAT rate on the ENTIRE invoice (both materials and labour)!**

| Homeowner Boiler & Radiator Upgrade Scenario | Materials Cost (Ex-VAT) | Labour Charge (Ex-VAT) | Total Net Price (Ex-VAT) | Materials Share of Net Total | Applicable Irish VAT Rate | Total Homeowner Price (Incl. VAT) |
|---|---|---|---|---|---|---|
| **Scenario A: Bundled Quote (Breaches 2/3 Rule!)** | €2,200.00 | €900.00 | €3,100.00 | **70.97% (> 66.67%)** | **23% on whole job (€713.00)** | **€3,813.00** |
| **Scenario B: Materials Under 2/3 of Contract** | €1,900.00 | €1,100.00 | €3,000.00 | **63.33% ($\le$ 66.67%)** | **13.5% on whole job (€405.00)** | **€3,405.00** |
| **Scenario C: Separate Supply of Goods vs Installation Contract** | Checked under Revenue single vs multiple supply rules | — | — | Must reflect genuine separate supplies | 23% on goods / 13.5% on installation service if genuinely separate | — |

Look at Scenario A vs Scenario B: when your materials cross **66.67%** of the net quote, the homeowner's VAT bill jumps by **€308** on a €3,000 job! And if you mistakenly quoted *"€3,518.50 including 13.5% VAT"* on a job where materials were 71% of the cost, **Revenue will assess YOU for the missing 9.5% VAT out of your own profit margin**.

*Note on Irish VAT registration thresholds (2026–2027):* A sole trader providing services (or services subject to the Two-Thirds check) must register for VAT once rolling 12-month turnover exceeds **€42,500** (or **€85,000** for pure supplies of goods / where 90%+ of turnover is goods and not construction services subject to RCT).

## How do Relevant Contracts Tax (RCT 0%, 20%, 35%) and VAT Reverse Charge work on subcontractor quotes?

When you work as a **Subcontractor** in relevant operations (construction, civil engineering, haulage, forestry, or meat processing) for a **Principal Contractor** (such as a main builder, developer, local authority, or utility—**never a private homeowner improving their own house**), two rules change how you quote and get paid on [Revenue's eRCT system in ROS](https://www.revenue.ie/en/self-assessment-and-self-employment/rct/index.aspx):

1. **You NEVER charge VAT on an RCT-relevant construction invoice (VAT Reverse Charge):** Whether the work would otherwise be 13.5% or 23%, a VAT-registered subcontractor supplying construction services subject to RCT to a Principal Contractor issues a **VAT Reverse Charge invoice** showing **€0.00 VAT charged** and the mandatory statement: *"VAT on this supply to be accounted for by the Principal Contractor."* (The Two-Thirds Rule does **not** apply to RCT reverse-charge supplies!).
2. **The Principal Contractor notifies the payment in ROS eRCT and deducts 0%, 20%, or 35% RCT:**
   - **0% Rate (Gross Payment):** You receive **100%** of your invoice if you have a clean 3-year tax compliance record with Revenue.
   - **20% Standard Rate:** The Principal Contractor deducts **20% RCT** from your gross payment (including materials, because unlike UK CIS, **Irish RCT applies to the ENTIRE gross payment including materials** unless separate non-relevant contracts exist!) and remits it to Revenue as a credit against your Income Tax / Preliminary Tax on your [Form 11](/keel/ireland-form-11-explained/).
   - **35% Rate:** Applied if you are not registered with Revenue or have serious compliance arrears.

**Critical difference between Ireland RCT and UK CIS:** In the UK, CIS 20% is deducted only from labour (materials are exempt). **In Ireland, if you are on the 20% RCT rate, the 20% RCT deduction is taken off your ENTIRE payment—both labour AND materials!** That means if you are on a 20% RCT rate, quoting a big supply-and-fit package where you buy €15,000 of materials will leave you 20% out-of-pocket on the materials until Revenue offsets the RCT credit! Either apply on ROS to move to the **0% RCT rate** once compliant, or agree for the Principal Contractor to supply high-value materials directly.

## When must an Irish sole trader register for VAT in 2026–2027 (€42,500 vs €85,000)?

Following Finance Act threshold increases in effect across **2026 and 2027**, a sole trader supplying services must register for Irish VAT once turnover exceeds **€42,500** in any continuous 12-month period, while a business supplying pure goods (or where at least 90% of turnover comes from goods not subject to RCT) registers at **€85,000**.

## How should you structure materials vs labour when quoting on the 20% RCT rate?

Because Irish **20% RCT** is deducted from your **entire gross payment including materials** (unlike UK CIS), if your eRCT rate on ROS is 20% rather than 0%, ask the Principal Contractor to purchase high-ticket plant or structural materials directly so 20% of your material cash flow is not locked up with Revenue until your Form 11 offset.

## Frequently asked questions

**What is the Two-Thirds VAT Rule for Irish tradespeople in 2026–2027?**

Under Irish VAT law, building, plumbing, electrical, and repair services for private homeowners normally carry the 13.5% reduced VAT rate. However, if the VAT-exclusive cost of the materials/goods you supply exceeds two-thirds (66.67%) of the total VAT-exclusive contract price, the Two-Thirds Rule triggers and you must charge 23% VAT on the entire invoice (both labour and materials).

**Does the Two-Thirds VAT Rule apply when I invoice a Principal Contractor under RCT?**

No. When you supply construction operations subject to Relevant Contracts Tax (RCT) to a Principal Contractor, the VAT Reverse Charge applies regardless of the ratio of materials to labour. You do not charge VAT on the invoice; instead, the Principal Contractor accounts for the 13.5% VAT directly to Revenue on their own VAT3 return.

**Is Irish 20% RCT deducted from materials as well as labour?**

Yes—unlike the UK Construction Industry Scheme (CIS) which exempts materials, Irish Relevant Contracts Tax (RCT) is deducted at 0%, 20%, or 35% from the entire gross payment made by the Principal Contractor under a relevant contract, including both labour and materials. Every euro of RCT deducted is credited to your ROS account to offset your VAT, Preliminary Tax, or Form 11 Income Tax.

**What are the Irish VAT registration thresholds for sole traders in 2026–2027?**

Following Finance Act increases, the Irish VAT registration threshold in 2026–2027 is €42,500 in any continuous 12-month period for suppliers of services (including most tradespeople providing installation and repair services), and €85,000 for suppliers of goods. Note that if you supply construction services where the Two-Thirds Rule is exceeded, Revenue still tests your registration threshold against the lower €42,500 services limit unless 90% of your turnover comes from pure goods.

**How do I qualify for the 0% RCT rate with Revenue?**

Revenue automatically reviews subcontractor RCT rates on ROS based on your compliance history. To qualify for the 0% RCT rate (so Principal Contractors pay you 100% gross with no deduction), you must have an up-to-date tax compliance record with Revenue—meaning all Form 11, VAT3, and PREM returns and payments have been filed and paid on time over the preceding three years.

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*This article is general tax and business information, not personalized tax advice. Confirm VAT and RCT rules with Revenue (revenue.ie) or an Irish Chartered Tax Adviser (CTA).*

Build Irish quotes in euro (€), check the Two-Thirds 13.5%/23% VAT threshold automatically, and issue RCT reverse-charge invoices on-device with [Keel on the App Store](https://apps.apple.com/us/app/keel-simple-invoice-finance/id6786659713).