Minimum wage to rise to €14.15 per hour next year

Finance minister Paschal Donohoe said the ceiling for the USC 2% rate band will also be increased by €1,318 to €28,7000

Fine Gael Minister for Finance, Paschal Donohoe and Fianna Fail Minister for Public Expenditure, Infrastructure, Public Services, Reform and Digitalisation Jack Chambers during a photo opp for Budget 2026 at Government Buildings. Photo: Leah Farrell/© RollingNews.ie

Finance minister Paschal Donohoe has announced that the national minimum wage will be increased by 65c to €14.15 per hour.

Announcing the measure as part of Budget 2026, Mr Donohoe said the hike will be implemented on January 1, 2026.

In tandem with that, the ceiling for the USC 2% rate band will be increased by €1,318 to €28,7000.

Speaking in the Dáil on Tuesday, the minister for finance said: "This increase will ensure that full-time workers on the minimum wage will remain outside the top rates of USC, while also giving a modest benefit to all workers whose income is above that amount."

Mr Donohoe also announced that the Government would be extending the USC concession that applies to those who have a full medical card and earn less than €60,000 per year, so that the reduced rate of USC continues to apply for a further two years until the end of 2027.

Budget 2026 saw minimal changes to personal tax for employees, with income tax bands remaining unchanged. 

Mr Donohoe told the Dáil that the scope for significant personal tax changes is limited, adding: "However, over the lifetime of this Government, I will stand by our commitment to make progressive changes to income tax, if the economy remains strong."