Minimum wage rates in Ireland for 2023 and the new living wage

On Wednesday, 16th of November, the government approved a plan for a new National Living Wage to be introduced which will replace the current National Minimum Wage. The living wage rate will be phased in over a four-year period, beginning this January.  

The first step towards the new living wage will see the current minimum wage increase to €11.30 per hour from 1st January 2023. It has been agreed that the living wage rate that will be introduced in 2026 will be set at 60% of the hourly median wage in Ireland. It is estimated that 60% of the hourly median wage in Ireland would equate to €13.10 per hour in 2023. 

Changes from 1st January 2023 

From the 1st of January 2023, the minimum wage rate will increase by 80c per hour, from €10.50 to €11.30, for those aged 20 years and over. 

Rates for other workers will be as follows: 

• Aged 19: €10.17 - 90% of the minimum wage
• Aged 18: €9.04 - 80% of the minimum wage
• Aged under 18: €7.91 - 70% of the minimum wage

What does the living wage mean for employers? 

The National Minimum Wage will remain in place until the National Living Wage is fully phased in, in 2026. The minimum wage rate will increase between now and 2026, closing the gap between the minimum and the living wage. However, the full living wage may be introduced faster or slower than the proposed time frame, depending on prevailing economic circumstances.  

Once the living wage has come into effect in 2026, the impact of the change will be assessed, and it will be decided whether or not the living wage rate will be increased to 66% of the hourly median wage. 

No action needs to be taken when processing payroll as your payroll software will be updated to reflect these new rates.

The living wage is just one of the improvements to workers' rights to be introduced over the coming years. Other changes we are set to see for employees is the introduction of Statutory Sick Pay and Automatic Enrolment onto pension schemes.