The Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar TD, has today (Tuesday the 12th of October) received Government approval to accept the recommendation from the Low Pay Commission to increase the National Minimum Wage to €10.50 per hour from 1 January 2022.
This represents a 30-cent increase, or just under 3%, on the current National Minimum Wage of €10.20 per hour and will see at least an estimated 135,000 people get a boost to their wages.
Announcing the increase today, the Tánaiste said:
“The Government today agreed to accept the Low Pay Commission’s recommendation to increase the National Minimum Wage to €10.50 from the 1st of January next year. It is estimated that at least 135,000 people will get this increase with many others on slightly higher pay levels also getting a knock-on increase. I hope this, along with the other measures we are announcing as part of the Budget, will go some way to protecting the lowest paid workers from the rising cost of living.
“Since 2015, the National Minimum Wage has increased from €8.65 per hour to its current rate of €10.20 per hour, or more than 17%, which is substantially more than inflation during that period. I offer my thanks to all the members of the Low Pay Commission for all their work this year, in putting together this recommendation to Government. Work is also ongoing on the development of a Living Wage for Ireland and I expect to be in a position to take a proposal to Government on that in the first half of the new year.”
This increase will also mean that those working under certain conditions, under the age of 18, 19 and 20, will receive a corresponding increase in their pay, as they are entitled to a percentage of the full minimum wage rate.
National Minimum Wage – rates with effect from 1 January 2022
Minimum Hourly Rate of Pay €
% of National Minimum Wage
National Minimum Wage (Aged 20 and over)
Aged under 18
The report of the Low Pay Commission in relation to the National Minimum Wage will be published shortly. The report highlights two long-standing anomalies in the PRSI system which need to be resolved. One discourages employers from increasing pay due a consequent increase in Employer PRSI and another can cause workers to be worse off if they get a pay increase as all of their income becomes liable for Employee’s PRSI once they exceed a certain threshold when it had previously been exempt.
While the introduction of the PRSI credit and the annual increase in the PRSI threshold will continue to mitigate the effects of these anomalies, a comprehensive solution is long overdue. As part of the Government decision the Ministers for Finance, Social Protection and Enterprise, Trade and Employment will develop an options paper to resolve these anomalies, in consultation with the Minister for Public Expenditure and Reform, no later than the end of Q2 2022.
NOTES FOR EDITOR
The increase in the nominal minimum wage in Ireland to €10.50 will move Ireland from having the third highest nominal minimum wage rate of the 21 EU member states that have national minimum wages to having the second highest. In 2021, Ireland’s rate was 6th in the rankings, when adjusted for purchasing power standards.
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