Tax cuts help staff, but PRSI, auto-enrolment and the minimum wage all push your costs up. Here is how to plan a pay review that is fair, affordable and ready for pay transparency.
Key points for employers
- ConfirmedTax changes give staff a net gain at no cost to employers.
- ScheduledEmployer auto-enrolment contribution 1.5%, rising to 3% in 2029.
- ScheduledEmployer PRSI up again in October 2027.
- ReportedPay transparency legislation expected during 2027.
- ConfirmedEmployer PRSI lower rate extended to staff earning up to €600 a week.
Your 2027 cost pressures in one place
| Cost | 2027 change |
|---|---|
| Minimum wage | Up 79 cent to €14.94 an hour from January |
| Employer PRSI | 11.4% higher rate since October 2026, with a further step in October 2027 |
| Employer PRSI threshold | Lower rate now applies up to €600 a week, up from €552 |
| Auto-enrolment | 1.5% employer contribution on eligible staff, rising to 3% from 2029 |
| Pay transparency | Reporting and pay range rules expected to be legislated in 2027 |
Use the Budget in your pay conversation
A 3% pay rise on €45,000 plus the Budget changes gives a bigger net gain in 2027 than the same rise in 2026. When budgets are tight, showing staff their total net improvement is a fair and honest part of the conversation.
Watch the €600 a week line
Once weekly pay goes over the employer PRSI threshold, the higher employer rate applies to all of that pay, not just the amount above it. A rise that takes someone from just under €600 a week to just over it can cost more than it looks. Check the full employer cost of any rise near that point.
Get ready for pay transparency
The EU Pay Transparency Directive will require employers to give candidates the pay range before interview, ban questions about salary history and widen gender pay gap reporting. Irish legislation is expected during 2027. A 2027 pay review is the right moment to put pay bands and job grades in place.
- Group roles into clear grades with documented pay ranges.
- Check for unexplained pay gaps between men and women in the same grade.
- Write down the criteria for pay increases and apply them consistently.
- Remove salary history questions from application forms now.
Share options and KEEP
Business groups asked for the Key Employee Engagement Programme to be simplified so SMEs can compete for talent with share options. Check the Finance Bill for any changes before you design a share scheme.
More on Budget 2027 for employers
Back to the Budget 2027 live hub
Sources and how we check figures
Figures are from the Budget speeches and Budget day reporting. Items marked Reported should be checked against the final Budget documents on gov.ie and Revenue guidance. This page is general information, not legal, tax or financial advice.