Finance minister Paschal Donohoe has announced a 2.9% increase in the National Minimum Wage from €10.20 to €10.50 an hour from January 2022.
The increase had been recommend by the Low Pay Commission.
In order to ensure that the salary of a full-time worker on the minimum wage will remain outside the top rates of the Universal Social Charge, the ceiling of the second USC rate band will be increased from €20,687 to €21,295.
• Download Low Pay Commission report
The minimum wage increase will impact the hospitality sector, still reeling from pandemic impacts. The minister also signalled that the reduced VAT rate of 9% for the hospitality sector will not be extended beyond the end of August 2022.
In Association with
The recommendation on the minimum wage increase was opposed by three of the nine members of the Low Pay Commission. The employer representatives said they favoured an increase closer aligned to forecasted inflation.
The trio also expressed concern in relation to the challenges facing sectors where minimum wage is more prevalent, especially hospitality, retail, beauty and hair industry; further labour costs which will also impact these sectors, including auto enrolment and mandatory sick pay; and that these sectors are more vulnerable in circumstances of a fourth wave and more prolific emerging variants.
Photo: Ministers Paschal Donohoe (right) and Michael McGrath. (Pic: Sasko Lazarov / RollingNews.ie)
