Currently, the national minimum wage is €9.55 per hour, which increased on 1st January 2018. The Low Pay Commission has recommended that the national minimum wage be increased by 25 cent to €9.80 per hour. The Government has accepted this recommendation and this increase is due to be introduced in January 2019.
This is the fifth increase of the national minimum wage since 2011. This increase could benefit up to 120,000 employees, increasing their hourly rate by 2.6%. An employee working 40 hours per week will see their gross pay increase by €10.00.
The new minimum hourly rates will be:
The Taoiseach, Leo Varadkar said “this increase will put us in the top five in the world for our national minimum wage in cash terms and purchasing power.”
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The National Minimum Wage for an experienced adult worker is increasing to €9.55 per hour from January 1st 2018. This is the third year in a row that the NMW has been increased but this is by far the largest with an increase of .30c
The National Minimum Wage Act, 2000 provides for a minimum hourly rate of pay for all workers.
All workers, including full time, part time, casual and temporary will be deemed to be covered by the act with only 2 exceptions; close relatives of the employer and certain industry specific apprentices.
Workers can be broken down into 5 different categories; experienced adult workers in employment more than 2 years and over the age of 18, a worker under the age of 18, workers in their first and second year of employment who are over the age of 18 and trainees’ who are undergoing a course that satisfies certain conditions set out in the Act.
The new minimum hourly rates are:
Breaches of the act are deemed to be criminal offences and are punishable with hefty fines and even imprisonment.
One of the most common calls I get on the support line is from a distressed customer who tells me they have lost their payroll information. Reasons for the loss of this information are varied and could be anything from a laptop being stolen, a virus attacking the computer, holding files to ransom or fire or water damage to the computers in the office.
The first question I’ll ask on a call of this type will be “do you have a backup?”. Honestly, I can’t tell you the number of people that say “No” to this. People are also mistakenly under the impression that we have a copy of their payroll data. Unfortunately this is never the case, we do not have access to the employer’s payroll information so this can add to the customer's stress levels as you can imagine!
We would always stress the importance of taking a backup of your payroll information. You would have your computers and office equipment insured against anything happening so why would you not do the same for your data? Think of your backup as your information’s insurance policy, after all it is almost irreplaceable or at the very least a major inconvenience to try and rebuild your payroll.
In a lot of cases, the call to our customer support line comes too late for us to be of any real assistance and the only advice we have to give is to start over and process payroll from the beginning again.
We never think anything like this will happen to us, but take it from me, it does, so go ahead and take out that insurance policy and backup before it is too late!
The following links will guide you to taking a backup in your software or book a demo of BrightPay Connect our latest cloud add on that offers an automated online backup feature:
There can often be some confusion surrounding an employee's entitlement to pay for a public holiday particularly where the employee may be part-time or the public holiday falls on a day that the employee does not normally work.
It is also worth noting that not every bank holiday is a public holiday though in most cases they coincide. Good Friday is a bank holiday but it is not a public holiday. The following dates are the official public holidays in Ireland.
Employees who qualify for public holiday benefit will be entitled to one of the following:
So, who is entitled to a payment?
How to calculate the amount to be paid?
If the public holiday falls on a day which the employee would normally work:
If the public holiday falls on a day which the employee does not normally work:
Further information can be found at Organisation of Working Time Act 1997.
The 2017 Living Wage has been set at €11.70 per hour, up from €11.50 last year. The new figure represents an increase of 20 cent per hour on the previous rate. The recommended living wage rate is now nearly a third higher than the legally required minimum wage, which is set at €9.25 an hour.
The 20 cent increase in the Living Wage was arrived at upon consideration of a number of changes in the cost of living and the taxation regime in the last year. The Living Wage for the Republic of Ireland was established in 2014, and is updated in July of each year. It is part of a growing international trend to establish an evidence-based hourly income that a full-time worker needs so that they can experience a socially acceptable minimum standard of living.
Where employees use their own private cars or motorcycles for business purposes, reimbursement in respect of allowable motoring expenses can be effected by way of flat-rate mileage allowances.
There are two types of mileage allowance schemes which are acceptable for tax purposes if an employee bears all the motoring expenses:
The Department of Public Expenditure and Reform has recently published circulars with new Civil Service Travel Rates, the revised rates are effective from 1st April 2017. The distance bands have increased from two to four with a lower recoupment rate for the first 1,500 kilometres.
Business travel carried out between 1st January and 31st March 2017 will not be affected by these new bands and rates, business travel to date from 1st January 2017 will count towards the cumulative business travel for the year.
Motor Travel Rates - Effective from 1st April 2017
Reduced Motor Travel Rates per kilometre
The reduced rates are payable to Civil Service employees who undertake a journey associated with their job but not solely related to the performance of their duties, such as:
The Motor Travel Rates for motorcycles and bicycles remain unchanged as follows:
Bicycle: 8 cent per km
Please note, there are changes to subsistence rates which are also effective from 1st April 2017.
Almost all welfare benefits and state pensions are to be increased in 2017.
The maximum weekly Illness Benefit payment will increase by €5.00 from €188 to €193 per week from week commencing 13 March 2017.
Illness benefit is considered as income for tax purposes and thus needs to be taken into account for PAYE purposes by an employer. It remains exempt from USC & PRSI.
No payment is made for the first six days of illness and for any Sunday.
Thesaurus Payroll Manager will automatically apply the increased rate of €193 per week as soon as Week 12 is reached in the software, which users should be aware of. Further information on how to process illness benefit in Payroll Manager can be found here:
In addition, standard Maternity and Paternity payments will increase from €230 to €235 per week from 13 March 2017. These are both taxable sources of income but aren’t liable to USC or PRSI. Unlike illness benefit, however, an employer must not tax these benefits through payroll. Instead, the Revenue will tax Maternity and Paternity Benefit via the employee’s tax credit Certificate by reducing the employee's SRCOP and tax credit on receipt of information from the Department of Social Protection.
The new hourly rate represents an increase of 50c on the previous figure and is the second increase to the minimum wage since 2011. Alongside the hourly pay increase, employer PRSI thresholds are being adjusted from 1 January to ensure that an increased PRSI burden does not fall on minimum wage employers.
Minimum Wage for Trainees:
Employee aged over 18, in structured training during working hours
The minimum wage is the lowest rate of pay that employers can legally pay to workers. Presently in Ireland the minimum wage stands at €8.65 per hour (apart from exceptions for apprentices etc.). However a low pay commission group is to be established and is expected to recommend an increase of €0.50 per hour. The commission is likely to be modelled on a similar body in the UK, which has employer and trade union representatives. Tánaiste Joan Burton said the minimum wage needs to be kept under constant review due to cost of living increases.
Employers’ groups such as Ibec and business groups such as the restaurant sector are strongly opposed any increase in the minimum wage and believe that any increase will inevitably lead to job losses and risk the economy’s fragile recovery. “There is no justifiable economic argument for imposing a 6% increase on SMEs when inflation is practically zero,” ISME’s Mark Fielding said. The Small Firms Association called on the government to reject the proposals, and freeze the minimum wage for the next three years.
Meanwhile the Unite trade union expressed its disappointment believing the proposed rise does not go far enough in its submission to the commission, it had sought a €1 increase.
The Living Wage
A living wage is based on the amount an individual needs to earn to cover the basic costs of living. A coalition of groups says this is about €11.45 an hour, significantly above the minimum wage of €8.65 an hour. Earnings below the living wage suggest employees are forced to do without certain essentials so they can make ends-meet. Ms Burton has encouraged employers to commit to paying a “living wage” to their employees. She has that this will benefit society by giving lower paid workers more spending power and reducing reliance on social welfare. However Ms Burton said the move towards a living wage should initially be on a voluntary basis, rather than a legally enforceable level of pay like the national minimum wage. In recent days Ikea in Ballymun announced that it will be introducing the living wage for all Irish and UK employees. Ms Burton has said “If people get a living wage, they have more spending power, more financial independence and can move away from welfare dependency. It benefits the family and the exchequer.”
Established in 2000, the TaxSaver Commuter Ticket Scheme is an incentive for workers to use public transport and is seen as a way to encourage the use of public transport. The scheme is operated in conjunction with the Revenue Commissioners. The scheme involves employers providing employees with bus and rail commuter tickets while saving on employer PRSI payments.
The employers and employees must sign a contract agreeing to participate. The employer then applies for commuter tickets for employees. Information on tickets are available from Dublin Bus, Irish Rail, Bus Éireann, Luas, and approved private operators websites. Detailed information sheets on each type of ticket are also available for distribution to employees.
Employees participating in the scheme may receive the tickets through salary sacrifice, in lieu of an annual cash bonus, or as a benefit-in-kind. It costs employers and employees nothing to join the scheme itself.
Through salary sacrifice employees receive TaxSaver commuter tickets as part of their basic salary package. They then benefit from reduced Income Tax, PRSI and Universal Social Charge (USC) payments due to the fact that the cost is a tax allowable deduction.
Employees only have to pay tax, PRSI and USC on the "money" portion of their salary. Employer PRSI is also calculated on the "money" portion of the employee's salary.
Employers can achieve PRSI savings of up to 10.75% and employees can save between 31% and 52% of travel costs as a result of tax, PRSI and USC savings by participating.
Companies must keep a receipt of purchase and a copy of the ticket for their tax records.