Budget 2027 was announced on 6 October 2026, and for employers the headline is simple: the cost of employing people is going up again. The national minimum wage rises from 1 January 2027, the employer PRSI threshold moves, PRSI rates are climbing in stages, and the rules for reporting certain benefits to Revenue are changing. None of it is dramatic on its own, but together it is enough to change your 2027 labour budget. Here is what was announced and what to do about it before the new year.
Budget 2027 at a Glance for Employers
| Measure | What is changing | When |
|---|---|---|
| National minimum wage | Up 79c, from €14.15 to €14.94 an hour | 1 January 2027 |
| Employer PRSI threshold | Up from €552 to €600 a week | 1 January 2027 |
| PRSI rates | Up 0.15 percentage points for employers and employees | Applied from 1 October 2026, with a further rise due 1 October 2027 |
| Reporting of certain benefits (ERR) | Option to report monthly instead of in real time | 1 January 2027 |
The Minimum Wage Rise: What It Actually Costs You
The national minimum wage goes up by 79c to €14.94 an hour, an increase of roughly 5.6%. Take a full-time employee on 39 hours a week. That is an extra €30.81 a week, or about €1,600 a year, before employer PRSI and holiday pay. For ten staff on the minimum wage, that is around €16,000 a year.
The impact does not stop at the lowest-paid roles. If you pay slightly above the minimum wage, the gap between grades can shrink and you may need to adjust pay to keep it fair. Any overtime premium or holiday pay linked to the hourly rate rises with it too, so the real cost is wider than the headline figure.
Employer PRSI: A Higher Threshold, but Rates Keep Climbing
From 1 January 2027, the weekly earnings threshold for the lower employer PRSI rate rises from €552 to €600. It is a measure designed to support employers as the minimum wage goes up. To put it in context, a 39-hour week at the new minimum wage comes to €582.66, which stays under the new €600 threshold.
The rates themselves are still rising. Since 1 October 2026, the higher Class A employer rate is 11.40% (4.35% for employees), and a further 0.15 percentage point increase for both is due from 1 October 2027. So the higher threshold helps some employers, but it is partly offset by the next rate rise.
Reporting Changes: ERR Gets a Little Easier
Since 1 January 2024, employers have had to report certain expenses and benefits to Revenue, including travel and subsistence payments, the small benefit exemption and the remote working daily allowance. From 1 January 2027, you can either keep reporting on or before the date of payment, or report by the 14th of the month after the benefit is provided.
The detail will be set out in the Finance Bill, so check Revenue’s guidance before you change your process.
Other Costs to Plan For
Two other developments are worth keeping on your radar, even though they were not new in this Budget:
- Auto-enrolment. Employer contributions to My Future Fund step up over its first ten years, so the cost builds gradually rather than all at once.
- Pay transparency. Irish legislation implementing the EU Pay Transparency Directive is expected during 2027. Whatever the final detail, employers who hold accurate pay and hours data in one place will be better prepared.
Six Things to Do Before January
- Re-cost your rosters at €14.94. Re-forecast labour budgets by site and team, not just overall.
- Check your overtime patterns. Find where premium hours are avoidable with better shift planning.
- Update pay rates before the first pay run of 2027 in both payroll and your workforce system.
- Review holiday pay and leave accruals, since they are linked to pay rates.
- Decide how you will handle ERR reporting. Stay real time or move to monthly once the detail is confirmed.
- Brief your managers and staff. Expect questions about pay, take-home and rosters.
How Time Point Helps You Manage Rising Labour Costs
When costs rise, the businesses that cope best are the ones that can see their labour costs before payroll lands, not after. With Time Point you can:
- Compare planned and actual hours and costs in real time with our rostering software, and compare rosters against labour budgets before you publish them, so there are no unexpected payroll overruns
- Forecast staffing needs by day and week, so you are never over- or under-staffed
- Capture accurate hours, breaks and overtime with time and attendance software
- Send approved hours straight to payroll through payroll integration, with no manual re-entry
- Track leave entitlements with holiday balances
All of it sits in one workforce management platform, so HR, finance and operations work from the same numbers.
Want to see what the 2027 changes mean for your own rosters? Book a demo and we will show you.