On Wednesday, 16th of November, the government approved a plan to introduce a new National Living Wage to replace the current National Minimum Wage.
This wage rate will be phased in over a four–year period, starting in January 2023. The first step will see the minimum wage increase to €11.30 per hour from 1st January 2023.
It has been determined that the living wage rate for 2026 will be set at 60% of the hourly median wage in Ireland, which is estimated to be €13.10 per hour in 2023.
Changes from 1st January 2023
From the 1st of January 2023, the minimum wage rate will increase by 80c per hour, from €10.50 to €11.30, for those aged 20 years and over.
Rates for other workers will be as follows:
- Aged 19: €10.17 – 90% of the minimum wage
- Aged 18: €9.04 – 80% of the minimum wage
- Aged under 18: €7.91 – 70% of the minimum wage
.The National Minimum Wage will remain in place until the National Living Wage is fully phased in by 2026. During this time, the minimum wage rate will gradually increase, closing the gap between the two wages. However, depending on economic conditions, the full living wage may be implemented sooner or later than planned.
Once it has been introduced, its impact will be evaluated and a decision made as to whether or not to raise it to 66% of the hourly median wage. No action is required when processing payroll as your payroll software will be updated with these new rates.
In addition to this change, workers‘ rights are set to improve further over the coming years with the introduction of Statutory Sick Pay and Automatic Enrolment onto pension schemes.