On 1st February 2020 the national minimum wage in Ireland is to be increased to €10.10 per hour from €9.80.
In 2019 the Low Pay Commission recommended the minimum wage level should rise by 30 cents per hour for adults. Normally a minimum wage rise would take place in January . But the Government decided to delay the date of implementation because of fears of a “no -deal” Brexit and it’s effect on the economy.
From February 1st 2020 – these will be the increased minimum wage rates.
- Aged 20 or more : – €10.10 per hour
- Aged under 18 : – €7.07 per hour (70%)
- Aged 18 : – €8.08 per hour (80%)
- Aged 19 : – €9.09 per hour (90%)
Someone on the new €10.10 minimum wage who is working full time for 39 hours a week will earn €20,483 a year before deductions.
It was announced on January 10th 2020 that the USC threshold will also be raised in line with the minimum wage. So the current ceiling of the 2% USC rate will go up from €19,874 to €20,484.
The USC amendment will be legislated for later in the year as part of the usual Finance Bill 2020 process but in the meantime , Revenue have agreed that this will be implemented on an “administrative basis” for the 2020 tax year.
Take Home Pay on Minimum Wage
For someone getting the new 2020 minimum wage of €10.10 an hour they will have annual deductions as listed below…
- Income tax deductions of €797 ;
- PRSI €558
- USC €229 –
- This leaves a take-home annual pay of €18,889 or €363 a week.
- This will be an increase of just €6 a week compared to the take home pay of €357 when getting the €9.80 minimum wage in 2019.
The Living Wage is a level of pay recommended by the Living Wage Technical Group. It is not mandatory – just advisory. That advisory body recently raised its recommended minimum living wage from €11.90 per hour to €12.30. Lidl is one company in Ireland that pays the Living Wage.