From 1 January 2027, Ireland’s National Minimum Wage for employees aged 20 and over will increase from €14.15 to €14.94 per hour. Announced as part of Budget 2027, this represents an increase of approximately 5.6%. Age based minimum wage rates for workers under 20 will also increase.
For employers, however, the impact goes beyond simply updating hourly rates. Businesses should review their workforce and payroll arrangements ahead of the first pay period of 2027 and identify employees who will be directly affected.
Employers should also consider employees earning just above the minimum wage, as the increase may narrow existing pay differentials between entry level and more senior roles, potentially raising wider considerations around pay structures, employee expectations and retention. The wider employment cost should also be considered, including pension contributions, overtime and employer PRSI.
Where contracts or employment documentation specify particular rates of pay, employers should review whether updates are required. Employers should also check whether separate statutory sectoral pay requirements apply to their workforce.
With January approaching, now is an opportune time for employers to review their pay practices, contracts and wider HR compliance.
If you require further support or advice relating to HR, please do not hesitate to contact us at hrsolutions@nfpireland.ie / (066)7102887.
For more information visit https://nfpireland.ie
Caroline Reidy, Head of NFP HR Solutions Ireland Limited, HR and Employment Law Specialist