National Living Wage in Ireland: What Employers Need to Know

Employers in Ireland have numerous responsibilities. 

In addition to overheads such as renting premises, insurance, and more, employers must juggle several requirements for their employees. Part of this includes providing new starters with a written statement of employment within their first five days on the job to ensure they’re paid correctly. 

Now, employers must adhere to an increase in the National Minimum Wage, which, in 2026, will become the National Living Wage. But what exactly is the National Living Wage, and why is it of such importance?

 

Devised in 2022 under the recommendation of the Low Pay Commission, the National Living Wage in Ireland is set at 60% of the median wage in any given year.

The National Minimum Wage will remain in place until 2026 when, after a gradual phasing in process, at which point it will be replaced by the National Living Wage.

Upon its introduction, Leo Varadkar, Tánaiste at the time, said, "The introduction of a living wage is an important step we are taking towards eradicating low-wage employment for all workers and it will be implemented gradually over a four-year period. Once it is successfully in place, the Low Pay Commission will investigate if we can increase the living wage further to reach 66% of hourly median earnings.”

 

The National Living Wage and the National Minimum Wage, what’s the difference? 

According to Living Wage, the National Living Wage is defined as “a wage which makes possible a minimum acceptable standard of living.” Criteria for establishing the National Living Wage include:

• The concept that work should provide an adequate income to enable individuals to afford a socially acceptable standard of living.
• The average gross salary which will enable full-time employed adults (without dependents) across Ireland to afford a socially acceptable standard of living.
• A wage that provides for needs, not wants.
• Evidence based on rates of pay that is grounded in social consensus and is derived from Consensual Budget Standards research. This establishes the cost of a Minimum Essential Standard of Living in Ireland today.

In its current form, the National Minimum Wage in Ireland is generally the amount an employee is paid and is agreed with an employer before employment begins, e.g., the job offer stage. Most employees are entitled to a minimum wage under the National Minimum Wage Act 2000.

Having increased on January 1st, 2024, the National Minimum Wage is currently €12.70 per hour. Calculated by dividing an employee’s gross pay by the total number of hours they worked, the minimum wage consists of different rates of different age groups. These are:

Age group	Minimum hourly rate of pay	% of minimum wage
20 and over	€12.70	100%
19	€11.43	90%
18	€10.16	80%
Under 18	€8.89	70%

 

 

Minimum wage payments can also include board rates of €1.14 per hour and lodging rates of €30 a week or €4.28 a day. Furthermore, employers must pay a minimum wage to work experience placements, work trials, internships and any other employment practice involving unpaid work or working for room and board.

The National Minimum Wage will continue to increase incrementally until it is replaced by The National Living Wage.

 

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