Foreign Earnings Deduction (FED)

How much allowance can you claim?

From 1 January 2026, the amount of the allowance due is the lesser of €50,000 or the specified amount. For the tax years 2012 to 2025, the amount of the allowance due was the lesser of €35,000 or the specified amount.

The specified amount is calculated using (D × E) ÷ F.

  • D is the number of qualifying days worked in a relevant state during the tax year or during a continuous 12-month period spanning two tax years.
  • E is all the income received from the employment in the tax year or during a continuous 12-month period spanning two tax years. This includes any taxable gain realised by share options less any qualifying pension contribution or premium. It excludes allowable expenses payments, Benefits in Kind (BIK), termination and restrictive covenants payments.
  • F is the total number of days that the employment is held by you in the tax year (there are 365 days in a full tax year).

The specified amount is reduced by your income earned on qualifying days for which Double Taxation Relief is available under a tax treaty.

  • Example 1

    You are required to travel to a relevant state to seek new markets for your employer’s goods. You leave Ireland on 8 January 2026 at 22.00 and arrive in the relevant state at 06.00 on 9 January 2026. You worked there until departing for Ireland on 11 April 2026 at 22.00. Your salary is €160,000.

    You spend 93 qualifying days in the relevant state. This consists of 23 days in January, 28 days in February, 31 days in March and 11 days in April.

    Relief due is:

    (93 days × €160,000) ÷ 365 days = €40,767.

    You are allowed to reduce your salary of €160,000 for Income Tax purposes by €40,767, which is the lesser amount. Your taxable salary in 2026 is €119,233. Your salary for Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) purposes in 2026 is €160,000.

  • Example 2

    Using the same facts as example 1 but assume you spent the same number of days in the relevant state in 2025. You are allowed to reduce your salary of €160,000 for Income Tax purposes by €35,000, which is the lesser amount. Your taxable salary in 2025 is €125,000. Your salary for Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) purposes in 2022 is €160,000.

Next: How do you apply for FED?

Published: 19 May 2026 Print this page

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