Business costs and labour costs are the overwhelmingly dominating concerns for small and medium sized enterprises this year.
This is according to ISME, the Irish SME Association, which has published the results of its latest member survey.
78% of respondents to the ISME survey said that business costs rank as the single biggest issue facing SMEs.
Business costs include energy, rent, commercial rates and other overheads - all of which have been subject to sustained and significant inflation in recent years.
ISME noted that despite easing inflation in some areas of the wider economy, these structural business costs have not moderated.
Labour costs follow closely behind, at 76% of respondents. These costs include employer PRSI, auto enrolment, statutory sick pay and related payroll burdens.
ISME noted that Ireland has the fourth highest median wages in the EU and SMEs continue to absorb cumulative increases in employment-related costs.
It said the survey findings underline the need for Government to focus on structural cost competitiveness in 2026, rather than layering additional obligations onto small businesses already operating on tight margins.
Employee taxation ranks third, with 46% of members citing it as their biggest concern. Members highlighted the combined burden of PAYE, PRSI and USC on workers, as well as the comparatively low income threshold at which employees enter the marginal tax band.
ISME said this creates upward wage pressure, as employers are often required to increase gross pay simply to protect employees' take-home income.
Meanwhile, 39% of respondents cited the cost of insurance as their main worry. Despite extensive legal reforms in recent years, employer liability, public liability, professional indemnity and motor insurance remain stubbornly high, ISME said.
In many sectors, businesses struggle to secure more than one quote for employer or public liability cover, effectively leaving them with a "take it or leave it" position, it added.
Finally, 38% of respondents said their biggest concern or the year ahead is the use of AI in the workplace to improve productivity and workforce efficiencies, and the ongoing challenge of recruitment and retention of talent.
Neil McDonnell, the chief executive of ISME, said that business costs and labour costs remain the dominant concerns for SMEs, year after year.
"These are not new issues, and the fact that they persist at such high levels should concern policymakers. It is also deeply worrying that long-running problems such as the cost of insurance remain unresolved for so many businesses, despite repeated reform commitments," he added.
