Ireland's €2.4bn rise in wages swallowed up by inflation

Wages paid to Irish employees increased by €2.4bn in the year to the end of March but inflation and other seasonal factors means total disposable income only grew by 1% during that time, new data from the Central Statistics Office (CSO) shows. Picture: iStock

Wages paid to Irish employees increased by €2.4bn in the year to the end of March but inflation and other seasonal factors means total disposable income only grew by 1% during that time, new data from the Central Statistics Office (CSO) shows.

Between January and March this year, the total compensation paid to employees increased by 5.7% to €44bn compared to the same period last year. This was the largest component of the total disposable income, €49bn, during the quarter.

“The number employed was relatively flat but employed people had higher average earnings in the quarter compared with the previous quarter and a year earlier,” the CSO said. “After accounting for inflation and seasonal factors, household total disposable income in real terms grew by 1% in the 12 months and was also 1% higher compared to quarter four 2025.” 

Households added almost €1 to their wealth for every €5 of disposable income during the first three months of the year with a seasonally adjusted household savings rate of 19.1%. This rate is similar to what was recorded between October and December, 18.7%.

Household spending

Household spending on goods and services increased by 5.9% to €40bn, compared to the first quarter of last year, before price or seasonal adjustments.

The consumption of goods and services by households and government was €57.7bn, an increase of €3.1bn, or 6%, compared to the first quarter of 2025.

Capital investment was down €1.6bn to €40.3bn.

In the non-financial sector, the gross value added by non-financial corporations was €101bn in the quarter - down €22bn or 18% year-on-year. The decrease was largely due to the pharmaceutical heavy industry sector.

The €101bn in gross value added was split into €30bn for wages and €71bn in gross operating surplus Non-Financial corporations invested €26bn in capital assets in the quarter, which is €5bn less than in the same quarter last year.

In the financial sector, investment income inflows and outflows were €64bn and €55bn respectively in Q1 2026. The value added of the sector was comparatively small: €6bn, similar to the equivalent quarter of 2025. The sector paid €3bn in compensation of employees during the quarter and made €3bn in gross operating surplus.

Average weekly earnings in Ireland is €1,046.88

Meanwhile further data published by the CSO on Tuesday shows the average weekly earnings in Ireland has risen to €1,046.88, up 3.9% from the previous year. Average hourly earnings in the period from April to June rose by 3.8% to €31.96 in the period, from €30.79 in Q2 2025.

Average weekly earnings rose across 12 of the 13 economic sectors in the year to Q2 2026. The largest annual percentage increase in average weekly earnings in Q2 2026 was in the Accommodation & Food Service Activities sector, €36.19 (7.7%) higher than a year previous. The only sector which saw average weekly earnings decrease was Arts, Sports, Recreation and Other Service Activities, which saw average weekly earnings of €679.73 down €39.30 (4.7%) from a year previous.  

Average hourly earnings grew on an annual basis by 3.8% to €31.96. "The sector with the highest average hourly total labour costs in Q2 2026 was Information & Communication at €61.40. The lowest average total labour costs were in the Accommodation & Food Service Activities sector, which recorded a rate of €20.27," said the CSO's Niall O'Sullivan.

"Over the three years from Q2 2023 to Q2 2026, average hourly earnings rose by 13.4% from €28.19 to €31.96." 

Average weekly paid hours increased by 0.3% from 32.7 in Q2 2025 to 32.8 in Q2 2026, said Mr O'Sullivan.

The job vacancy rate at the end of June was 1.3%, unchanged from a year previous, and 0.1% higher than the rate recorded at the end of the first quarter in March 2026. The Public Administration and Defence; Compulsory Social Security sector had the highest job vacancy rate at 3.9% in Q2 2026, followed by 2.6% in the Professional, Scientific & Technical Activities sector.