This is a niche relief, but for the people it fits it is worth a great deal — and the cap just went up by €15,000. It is aimed at Irish-based employees sent abroad to open up new markets, and it is the kind of thing an employer's payroll will not apply for you.
Quick facts
- Cap from 2026
- €50,000 (was €35,000)
- You must work
- At least 30 qualifying days in a relevant state
- Relevant states include
- Brazil, India, China and South Africa
- Reduces
- Income tax only — not USC or PRSI
- Formula
- Qualifying days × employment income ÷ days employed
- Excluded
- Civil and public servants, SARP, split-year and Transborder relief
What it is
"If you are resident in Ireland for tax purposes, but spend some time working abroad temporarily, you may be able to claim FED."
"FED only reduces an individual’s income for Income Tax purposes. FED does not reduce an individual’s income for Universal Social Charge (USC) or Pay Related Social Insurance (PRSI) purposes."
Who qualifies
"In order to qualify for FED, you are required to work in a relevant state for at least 30 qualifying days."
"You are required to work the number of qualifying days during a tax year or during a continuous 12-month period spanning two tax years." So a trip that straddles New Year can still count.
"Relevant states include Brazil, India, China and South Africa and:" a further list set out by Revenue, which has changed over the years — check Revenue's current list for the country you are going to before you rely on it.
You cannot claim if you "are a civil or public servant", "receive the key employee research and development relief", "are taxed using the split year residence rules", "receive the Transborder Workers’ Relief", or "receive relief under the Special Assignee Relief Programme ."
How much — and the 2026 increase
"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 ." — qualifying days, times your income from the employment, divided by the days you held the employment in the year.
Revenue's own example: "(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." In 2025 the same trip would have been capped at the old €35,000.
One reduction: "The specified amount is reduced by your income earned on qualifying days for which Double Taxation Relief is available under a tax treaty."
Common questions
How much is Foreign Earnings Deduction worth in 2026?
From 1 January 2026 the allowance is the lesser of €50,000 or the specified amount. For 2012 to 2025 the cap was €35,000.
How many days abroad do I need?
At least 30 qualifying days working in a relevant state, in a tax year or in a continuous 12-month period spanning two tax years.
Which countries count?
Relevant states include Brazil, India, China and South Africa, plus a further list published by Revenue. Check Revenue's current list for your destination.
Does it reduce USC and PRSI?
No. FED only reduces your income for income tax purposes.
Who cannot claim?
Civil and public servants, and anyone receiving the key employee R&D relief, split year residence treatment, Transborder Workers' Relief or the Special Assignee Relief Programme.
- €15,000 — €50,000 cap from 2026 minus the €35,000 cap for 2012 to 2025