EII Calculator Ireland 2026

What Is the Employment Investment Incentive (EII) Scheme?

The Employment Investment Incentive (EII) is an Irish income-tax relief that gives qualifying individual investors up to 40% income tax relief on amounts invested in approved SME companies. It is one of the most generous SME investor reliefs in the European Union, designed to channel capital into Ireland's domestic small-to-medium enterprises (the country's biggest source of net employment growth) (source: Revenue.ie EII).

Key 2026 parameters: minimum €1,000 per investment; annual maximum €500,000 for established/returning investors, €250,000 for new investors; relief is 40% of the amount invested when claimed against income tax (PAYE or self-employed) for the year of investment. For a higher-rate taxpayer at 40%, every €10,000 invested creates €4,000 of immediate tax relief — turning a €10,000 gross investment into a €6,000 net-cost investment. The risk profile is otherwise unchanged — you are still investing in equity of an unlisted SME with the same upside and downside as any private equity.

How EII Tax Relief Works in 2026

The relief is applied against the investor's income tax liability for the year. If you invest €50,000 in an EII-qualifying company in 2026, you can claim €20,000 (40%) as a credit against your 2026 income tax bill. If your tax liability is lower than the relief, the unused portion can be carried forward for up to 9 subsequent years until fully used. The relief is non-refundable — it can only reduce tax already paid or owed. To claim, your investment must be a NEW share issue from the qualifying company; secondary purchases of existing shares do not qualify.

Worked example: Sarah, a higher-rate taxpayer with €40,000 of income tax liability in 2026, invests €50,000 in a Dublin-based EII-approved tech SME. Tax relief = €50,000 × 40% = €20,000. Sarah's net cost is €30,000 (€50,000 invested − €20,000 tax relief). She holds the shares for 4 years, then exits at €75,000. Pre-tax return is €25,000; capital gains tax (33% in Ireland) on €25,000 = €8,250. Net return = €25,000 − €8,250 = €16,750 on a €30,000 net cost = 56% net return over 4 years (or roughly 11.7% annualised).

Eligibility — Who Qualifies for EII?

Investor side: you must be an Irish income tax payer (resident or non-resident with Irish-source income), aged 18+, and must not be "connected" with the qualifying company (i.e. not a director, employee, or holder of more than 30% of the company's shares). Non-resident Irish citizens with Irish income tax liability can also qualify. The investment must be held for at least 4 years from the date of issue (post-2024 changes may extend this to 7 years for higher relief tiers — check current Revenue guidance).

Company side: the SME must be unquoted, less than 7 years old (or 10 years for follow-on), have fewer than 250 employees, have under €15 million net assets pre-investment, and be conducting "qualifying trading activities" in Ireland. Excluded sectors: dealing in financial assets, leasing land, dealing in commodities or property development, professional services partnerships. The company must obtain advance Revenue approval (RICT — "Relief for Investment in Corporate Trades") before issuing EII-approved shares (source: Revenue.ie company conditions).

Risks, Holding Period, and Common Mistakes

EII is high-risk private equity. Empirical Irish SME failure data suggests roughly 30-40% of post-EII investments return less than the original capital after 4-7 years. The 40% upfront relief substantially cushions this — your effective downside on €50,000 invested is just €30,000 (the after-relief net cost). Common mistakes that lose relief: (1) Selling shares before the 4-year holding period (relief is clawed back). (2) Becoming a "connected person" (taking a director role) within the holding period. (3) Investing in non-approved companies — always verify Revenue approval before transferring funds. (4) Missing the claim deadline — claim is made on Form 11 / Form 12 income tax return for the year of investment.

For other Irish tax tools, see our Irish income tax calculator, CGT Ireland calculator, pension tax relief calculator, and Help to Buy calculator.

Last updated April 2026. Estimates only — confirm current rules and approval status with Revenue.ie. Sources: Revenue Commissioners, Department of Finance.