Budget 2016 – Minimum Wage Net Pay Increase

Budget 2016 confirmed that the top rate of the minimum wage will be increased in January 2016 by 50c an hour to €9.15 per hour.  Full Details Here

Alongside the pay increase there will also be PSRI changes and USC changes.  So : how much extra will someone get in their take home pay after all the changes are taken into account?

If we look at someone on the minimum wage working full time for 39 hours a week. Their gross annual pay will currently be €17542 and they will have to pay Income Tax of €208 a year but no PSRI and €374 USC. This leaves them with a take home pay of €16960 a year or  €8.36 an hour

From January 2016 their pay will increase to €9.15 an hour or  €18556 a year. They will have deductions of  €411 Income Tax, €160 PSRI and €316 USC. This will leave them with a take home pay of  €17669 a year or €8.71 an hour . This represents an annual increase of  €709 a year or  35c an hour.

Details of PRSI Changes in January 2016

Details of Reduced USC in 2016

2 thoughts on “Budget 2016 – Minimum Wage Net Pay Increase

  1. I do not understand why minimum wage increase is reduced by 30% because of tax. If this is minimum wage and the living wage is even higher how can the government justify taking most of it for themselves? The tax on the minimum wage is 43 cent per hour which is almost the full increase of 50 cent per hour .
    If the government did not tax the minimum wage then an increase of 6 cent an hour would give the same actual increase but would also help keep inflation down and enable small businesses to keep competitive.

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