MORE THAN 160,000 people in Ireland are on track to receive a pay boost, as the coalition government moves ahead with plans to raise the national minimum wage by at least 55 cents per hour.
This would push the rate above €14 for the very first time.
This increase, which is expected to come into effect on January 1, forms part of a broader “last-minute budget” that is still under negotiation.
The Low Pay Commission recommended an increase of 4.5% to 5%, translating to a potential hourly rise of 65 cents from the current €13.50.
However, due to concerns over inflation and its wider economic impact, a more moderate 55-cent hike is likely to be announced on Budget Day.
Around 75% of minimum wage earners are employed in hospitality, an industry also set to benefit from a VAT cut from 13.5% to 9%, scheduled to take effect in July 2026.
While the wage increase has received broad political support, it is part of a quid pro quo deal, as businesses are expected to improve service delivery in return for tax relief.
But sectors like retail and general services may find it harder to absorb the wage hike.
The government’s long-term plan to phase in a national living wage, equivalent to 60% of the national median wage, has now been delayed until 2029.
This delay is aimed at reducing cost pressures on businesses.
Trade unions and opposition parties, particularly Sinn Féin, have been vocal in demanding stronger support for low-income households.
Sinn Féin’s Pearse Doherty criticised the government, arguing that families are being “hammered” by rising living costs while energy prices are set to spike again in the coming weeks.
Despite these warnings, the government has resisted calls to introduce further energy credits in the upcoming budget.
Meanwhile, Fianna Fáil is pushing for the reduced VAT rate on electricity and gas to be extended beyond its scheduled expiration in October, citing the ongoing strain on household budgets.
Ireland ranks among the top countries in the EU when it comes to gross monthly minimum wages.
According to Eurostat, Ireland’s minimum wage of €2,282 per month places it in the highest wage group alongside countries like Luxembourg (€2,704), Germany (€2,161), and the Netherlands (€2,246).
In contrast, Eastern and Southeastern European countries such as Bulgaria (€551), Albania (€408), and Ukraine (€164) remain in the very low wage bracket.
According to experts like Dr Sotiria Theodoropoulou of the European Trade Union Institute, nations with higher productivity and stronger worker bargaining power are better positioned to sustain higher wages.
Western Europe, with its more industrialised and high-tech economies, continues to outperform Eastern regions in wage levels.
Ireland’s planned minimum wage increase reflects a broader effort to balance social equity with economic caution.
As the final details of the budget are still being hammered out, economic uncertainties, such as energy tariffs and inflation, will likely shape the final outcome.
See More: Budget, Cost Of Living, Minimum Wage
