Undoubtedly the single most painful part of the Budget was the announcement that the NMW was to increase by 65cent to €14.15c for each hour worked by someone aged 20 and over.
The Sub Minimal rates will be €9.91 (Under 18), €11.32 (18 yr old) and €12.74 for those aged 19.
As we reported last week, the Minister for Enterprise Mr Peter Burke TD has decided against accepting a recommendation to abolish these sub minima rates and they will remain in place until 2029.
The increase is almost 5% (4.81%), significantly higher than the current CSO Consumer Price Index (CPI) of 2.7% and forecasts of inflation for 2026 which are estimated to be 1.9% – 2% according to the Central Bank of Ireland.
While it must be accepted that food price inflation is higher than general inflation, it still is hard to understand how the Low Pay Commission could have ignored all of the statistical evidence available to them.
In our submission to the LPC in May we suggested that a 30-cent increase, while difficult for many members to fund, was reasonable and would have been marginally ahead of the official CPI.
Given that Auto Enrolment will also be coming on January 1st, with an extra 1.5% cost to employers it’s hard to see it being a Happy New Year for many of us.
Its worth pointing out that the statutory National Minimum Wage has increased by 44% in the 6 years from Jan 2020 to Jan 2026. This compares to the CSO inflation index for Jan 2020 to the most recent report (September 2025) which shows inflation to be 23.1%. Such increases are neither warranted or sustainable, and the sooner reality sets in the better for employers and employees in the service industries such as ours.
