Budget 2027 brings two payroll changes that Irish employers should build into their 2027 forecasts: the adult National Minimum Wage is due to rise from €14.15 to €14.94 an hour on 1 January 2027, while the weekly earnings threshold for the higher employer PRSI rate will increase from €552 to €600. For employers with hourly-paid staff, the changes affect wage budgets, payroll settings and the cost of each working hour.
Employers should review pay scales, weekly earnings, overtime and PRSI classifications before the changes take effect. This guide explains the new rates and the payroll checks required. Finsoul Ireland offers accounting and HR-related business support.
What Budget 2027 Means for Irish Employers
Budget 2027 was presented on 6 October 2026. It announced a 79-cent increase in the adult minimum wage and a higher weekly threshold for the reduced employer PRSI rate.
The main dates and figures are:
| Area | Current position in 2026 | 2027 change |
| Adult National Minimum Wage | €14.15 an hour | €14.94 an hour from 1 January |
| Employer PRSI threshold | €552 per week | €600 per week in 2027 |
The minimum wage change is set out in the National Minimum Wage Order 2026. The PRSI threshold increase was announced in the Budget. Check current Revenue and Department of Social Protection guidance before changing payroll settings.
Minimum Wage Ireland: The Current Rate and the 2027 Position
The adult rate in 2026 is €14.15 an hour for employees aged 20 and over. From 1 January 2027, it will rise to €14.94. That is an increase of €0.79 per hour, or approximately 5.6%.
For an employee working 39 paid hours a week, the increase adds €30.81 to gross weekly pay, or €1,602.12 over 52 weeks at unchanged hours. This excludes employer PRSI, pension contributions and other employment costs.
The 2026 rates and age categories
The 2026 rates are age-related: €14.15 for employees aged 20 and over, €12.74 for age 19, €11.32 for age 18 and €9.91 for those under 18.
The new adult rate is €14.94. Check the 2027 order and Workplace Relations Commission guidance for age-related rates. An employee may move into a higher age band on their birthday.
Searches for minimum wage Ireland 2026 and Ireland minimum wage 2026 often return the €14.15 adult rate. That is the 2026 figure, not the rate that applies from January 2027. The Irish minimum wage also needs to be checked against the employee’s age and any applicable sectoral minimum rate.
What counts towards minimum wage pay?
The calculation uses reckonable pay over the employee’s pay reference period. Basic pay, certain shift allowances, bonuses and commission may count. Overtime premiums, expenses, tips paid through a central fund and benefits in kind do not count. Board and lodgings are subject to set limits.
Employers must set a pay reference period of no more than one month, include it in written terms and retain records showing that staff received the correct rate. The Workplace Relations Commission explains the calculation and record rules.
Employer PRSI Changes in Budget 2027
PRSI is paid by employers and employees. The employer contribution is an additional cost, not a deduction from gross wages. Rates depend on PRSI class and earnings.
The threshold rises from €552 to €600
Budget 2027 raises the weekly earnings threshold for the higher employer PRSI rate from €552 to €600. The lower employer rate applies to eligible Class A employees whose weekly earnings fall at or below the threshold; the higher rate applies above it. The change means that some employees whose weekly pay is between €552 and €600 will fall within the lower-rate band in 2027.
This is a threshold change, not a cut to the PRSI rate. Savings depend on earnings, PRSI class and paid weeks. The government estimates €650 to €700 annual savings per employee below the new threshold, but this is not a guaranteed saving for every payroll.
A separate PRSI rate increase is scheduled for October
Employers should also account for a separate change that was legislated before Budget 2027. Under the Social Welfare (Miscellaneous Provisions) Act 2024, PRSI contribution rates are scheduled to rise by 0.15 percentage points from 1 October 2027. This increase is part of a multi-year programme and is not the same measure as the Budget’s threshold adjustment.
Class A payroll calculations must reflect both the higher threshold and the October rate change. Check the Department of Social Protection’s current PRSI rates and employer guidance before updating payroll.
How Minimum Wage Ireland and PRSI Changes Affect Payroll Costs
The wage increase raises gross pay for employees below €14.94 or where employers maintain pay gaps. The PRSI threshold change may reduce contributions for some staff, but it will not automatically offset the wage increase.
Consider an employee working 39 hours a week at the adult minimum rate. The gross weekly wage rises from €551.85 at €14.15 an hour to €582.66 at €14.94. The employee’s weekly pay therefore rises by €30.81. As the new weekly amount is below €600, the employee falls within the lower employer PRSI threshold for the relevant class, subject to the rules in force. This example does not calculate the employer’s final PRSI bill, which also depends on the applicable rate and the October 2027 rate adjustment.
Review pay bands above the statutory floor too. Raising only the lowest rates may narrow differences between roles, so employers may choose to adjust other bands to reflect responsibility or experience. This is a business decision, not a legal requirement.
What Irish Employers Should Do About Minimum Wage Ireland and PRSI
Review pay rates and employee records
Identify employees paid at or near the minimum wage. Check age, hours, pay frequency and PRSI class, including for part-time, seasonal, temporary and casual staff.
Update payroll and financial forecasts
Forecast the new hourly rate from January, including employer PRSI, pension costs, overtime and related pay-band changes. Model the October PRSI increase separately.
Check pay calculations and records
Check average hourly pay over the selected reference period. Excluded payments must not be used to make up a shortfall. Keep wage records, report the correct PRSI class and contributions, and correct errors promptly.
Communicate changes to employees
Tell affected employees when the new rate applies and explain any payslip changes. Communicate revised pay bands and effective dates clearly.
How Finsoul Ireland Supports Employers with Payroll and HR Requirements
Finsoul Ireland offers payroll services and HR consulting services for Irish businesses. These services cover payroll processing and related records, as well as HR administration and employee information.
Employers remain responsible for meeting Minimum Wage Ireland requirements, applying correct PRSI classifications and completing statutory reporting. Professional support does not replace checks against current official guidance.
Frequently Asked Questions
What is the minimum wage rate in Ireland in 2026?
The adult National Minimum Wage for employees aged 20 and over is €14.15 per hour from 1 January 2026. Lower age-related rates apply to employees under 20.
Is Minimum Wage Ireland increasing in 2027?
Yes. The adult hourly rate is due to rise to €14.94 from 1 January 2027, an increase of 79 cents.
What PRSI change did Budget 2027 announce for employers?
The weekly threshold for the higher employer PRSI rate will rise from €552 to €600 in 2027. The amount an employer pays still depends on the employee’s earnings and PRSI class.
Are employer PRSI rates also increasing in 2027?
Yes. A separate 0.15 percentage-point increase is scheduled for 1 October 2027 under the Social Welfare (Miscellaneous Provisions) Act 2024. Employers should account for this separately from the threshold change.
What should employers do before the new rates take effect?
Review hourly pay, age categories, working hours, PRSI classes and payroll settings. Update wage forecasts and check the final official guidance before processing the first payroll affected by each change. Budget 2027 gives employers two distinct payroll changes to plan for: a higher minimum hourly rate from January and a higher employer PRSI threshold, alongside the separately scheduled October contribution-rate increase.