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Understanding Ireland’s National Minimum Wage Changes for 2025

As we enter 2025, significant changes to Ireland's National Minimum Wage (NMW) are set to take effect. The revised rates reflect a commitment to ensuring fair pay across different age groups while maintaining clarity on exclusions and reckonable components. Here’s everything you need to know about the new rules, how they impact workers, and what employers need to consider.


Understand the new minimum wages in 2025
Understand the new minimum wages in 2025

New Minimum Wage Rates by Age


From 1 January 2025, the national minimum wage rates will rise, depending on the worker’s age. For comparison, here are the rates for both 2024 and 2025:

Age Group

2024 Rate (€)

2025 Rate (€)

Increase (€)

Aged 20 and above

12.70

13.50

0.80

Aged 19

11.43

12.15

0.72

Aged 18

10.16

10.80

0.64

Under 18

8.89

9.45

0.56

These adjustments aim to further align wages with living costs while maintaining a fair structure across different age groups.


Excluded Categories of Employees


While the National Minimum Wage applies to most employees, specific groups are excluded from these regulations:


  1. Close relatives of sole traders: This includes spouses, civil partners, parents, step-parents, children, step-children, grandparents, siblings, or half-siblings of the employer.


  2. Craft apprentices: Employees undergoing training under the Industrial Training Act, 1967, or the Labour of Services Act, 1987, are exempt.


Employees are advised to clarify their employment status to determine eligibility.


Reckonable vs. Non-Reckonable Pay Components


Understanding what can and cannot be included in calculating the NMW is critical for compliance. Here is a side-by-side comparison:

Reckonable Components (included in NMW calculations)

Non-Reckonable Components (excluded from NMW calculations)

Normal basic pay

Expense reimbursements

Shift allowances

Premium payments for overtime, public holidays, or unsocial hours

Fees, bonuses, or commissions

Special duty allowances

Payments for zero-hour contracts

Tips and gratuities not distributed through payroll

Service charges distributed via payroll

Payments in kind

Board and lodging contributions

Payments in lieu of notice or termination

Board and Lodging Contributions


For employees provided with meals or accommodation as part of their remuneration, specific rates can be included in NMW calculations:

Component

2024 Rate (€)

2025 Rate (€)

Meals (per hour worked)

1.14

1.21

Accommodation (per week)

30.00

31.89

Accommodation (per day)

4.28

4.55

These increases ensure that non-cash benefits are valued more appropriately alongside the updated NMW rates.


Average Hourly Rate of Pay and Pay Reference Period


An employee's average hourly rate of pay must meet or exceed the NMW. This is calculated by dividing the gross reckonable pay by the hours worked within a given pay reference period.


  • Pay Reference Period: Employers must define this for each employee (typically a week, but no longer than a month). This period must be outlined in the employee’s written terms of employment.


Employees can request a written statement of their average hourly pay rate for any pay period within the last 12 months. Employers are required to respond within four weeks and maintain records of such statements for 15 months.


Employer Responsibilities and Record-Keeping


Employers must adhere to the following to ensure compliance:

  1. Maintain Records: Employers must keep detailed records of employee pay for at least three years to demonstrate compliance with the NMW.

  2. Avoid Victimisation: Employers must not penalise employees for asserting their legal right to fair pay in line with the NMW.

  3. Provide Transparency: Employers must issue statements of pay when requested, clearly outlining reckonable pay components and average hourly rates.


Key Takeaways


  1. Higher Pay in 2025: The increase to €13.50 for workers aged 20+ reflects a positive move towards better wages for Ireland’s workforce.

  2. Youth-Specific Rates: Younger workers have clearly defined rates that rise proportionally with age, offering a fair progression in earnings.

  3. Clear Inclusions and Exclusions: Employers and employees should familiarize themselves with reckonable and non-reckonable pay components to avoid disputes.

  4. Board and Lodging Updates: With specific monetary values for meals and accommodation, employees benefiting from these must understand how they contribute to the overall pay calculation.

  5. Comparative Increases: The changes from 2024 to 2025 represent a steady commitment to increasing the living standards for workers of all ages.

  6. Strict Compliance Required: Employers must maintain accurate records and ensure transparency to avoid legal repercussions.


Conclusion

The 2025 changes to Ireland’s National Minimum Wage signal a commitment to supporting workers across various age groups while maintaining fairness and transparency. Employees should understand their entitlements, while employers must rigorously comply with these new rules to avoid penalties. By fostering an environment of compliance and fairness, these changes aim to enhance Ireland’s labour landscape.


It’s essential to recognize the difference between the minimum wage rates and the salary thresholds required for employment permits. Factors such as minimum requirements and what qualifies as reckonable pay towards these thresholds can vary significantly.


At Future Direct, we specialize in guiding businesses and individuals through Ireland’s dynamic labour and immigration requirements. Whether you’re a business seeking immigration advices to source international skilled talent or an individual aiming to achieve your career goals in Ireland but confuse with the immigration procedures, our expert team provides tailored advice and support every step of the way.


Contact us today at +353 (01) 513 4085 or email info@futuredirect.ie for professional guidance. Let us simplify the employment permit process and help you navigate Ireland’s thriving economy with confidence.




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