Rapid Arctic warming is thawing carbon-rich permafrost, releasing greenhouse gases that accelerate climate change. Despite the importance of this feedback, permafrost-enabled global-scale models simulate only gradual, top-down thickening of the seasonally-thawed soil. This ignores abrupt permafrost thaw and intensifying fire regimes that combust soil carbon and further accelerate thaw. Here, we expand a compact Earth system model (OSCAR v3.0) enabling initial estimates of the impacts of abrupt thaw and wildfire, together with gradual thaw, on remaining carbon budgets consistent with the temperature goals of the Paris Agreement. Our model suggests that including permafrost thaw and fire-related carbon emissions reduces the remaining allowable carbon budgets from 2025 onward by 25 % +/- 12 % for avoiding 1.5 degrees C and 17 % +/- 7 % for avoiding 2.0 degrees C, relative to simulations without these processes. Accounting for these additional emissions is critical for setting emissions reduction targets aligned with the Paris Agreement.