Minimum wage in Ireland explained
Almost every worker in Ireland is entitled to the National Minimum Wage (NMW), and some employers also offer the higher rate Living Wage. In this article, you’ll learn what the minimum wage is, how it’s decided and how minimum wage affects workers depending on their age.
What is the minimum wage in Ireland?
The NMW is the minimum wage per hour a worker is entitled to earn in Ireland by law. The minimum wage you receive depends on your age and the sector you work in. The current national minimum wage if you’re over the age of 20 is €10.20 per hour (November 2021).
How does minimum wage work?
The hourly rate a worker receives is determined by both their age and whether or not that worker is an apprentice. You’re only entitled to the NMW if you’re of school leaving age, which is 16.
How is the minimum wage decided?
The government sets the minimum wage rates, applying them to all employees. This includes those who work full-time, part-time, in a small start-up business and those completing essential training for their job. As of January 2021, the rates for national minimum wage:
|Your Age||Hourly minimum wage||% of minimum wage|
|20 and over||€10.20||100%|
Will the minimum wage increase soon?
The government usually increases the minimum wage rates in January each year (the last increase was in January 2021), but you can also expect an increase when you turn 18, 19 or 20.
During the Budget 2022, the government announced an increase in the minimum wage as follows:
|Your Age||Hourly minimum wage from January 2022|
|20 and over||€10.50|
It’s worth noting that some parts of your pay don’t count towards your minimum wage. This includes tips, overtime payments, a loan from your employer and a pay advance. Commission, on the other hand, is included.
An employer can take certain deductions from your pay, but only for things such as tax, pension payments, trade union fees and any charges for accommodation they provide.
An employer cannot use the cost of tools, uniforms, travel or training courses to reduce your pay.
Are you taxed if you earn minimum wage?
Yes, you might still be taxed on your income even if you earn minimum wage, with different thresholds applicable based on how much you earn and whether you are single, married or in a civil partnership, or are widowed or a surviving civil partner.
How does Ireland’s minimum wage vary depending on age?
A varying scale of minimum wage exists so that more people of various ages and experience levels can find employment. This was put in place by the government in light of evidence that younger workers were being priced out of jobs.
While younger workers usually receive lower wages than older workers, a couple of reasons for that might be because they often lack the experience and have a higher training cost than older and more experienced employees.
Overall, the aim of minimum wage is to ensure a higher percentage of employment for younger people.
What is the Living Wage?
The Living Wage is a guide, rather than a law, that employers can follow. The aim is to give all employees an income that reflects minimum living costs, which some people argue that minimum wage doesn’t do. The Living Wage is increased each year to reflect changes in the cost of living.
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