The Irish Government has announced Budget 2025, with Minister for Finance Jack Chambers and Minister for Public Expenditure and Reform Paschal Donohoe revealing a range of measures.
The minimum wage is to rise by 80 cents per hour to €13.50. This is less than the €1 that was recommended by the Low Pay Commission.
There are a number of tax changes in Budget 2025. The point at which people pay the higher rate of tax of 40% is to increase from €42,000 to €44,000 to take account of rising wages. The latest figures from the Central Statistics Office show wages are rising at 5% per annum.
The Universal Social Charge rate of 4% is to be reduced to 3%, which is the second consecutive reduction to this rate.
Other measures include a €4,000 Power Up grant for commercially rateable businesses in the hospitality and retail sector for the cost of electricity. And the Small Benefit Exemption has increased from €1,000 to €1,500. This allows an employer to provide limited non-cash benefits or rewards to their workers without the payment of income tax, PRSI and USC.
Despite intense campaigning, the 13.5% VAT rate for the hospitality sector has not been reduced. Hairdressers are included in this sector and the Irish Hairdressers Federation (IHF) and the Hair and Beauty Industry Confederation (Habic) were among the organisations that lobbied for a return to the lower rate of 9%.
Minister for Enterprise, Trade and Employment. Peter Burke had reportedly been pushing for the 9% rate to be reintroduced for restaurants, bars and hairdressers, with accommodation businesses to be excluded from the reduction. However, the 13.5% rate is to remain in place. Habic said it was “disappointed” with this decision.
