Minimum Wage 2018

Posted in Employment, PAYE/PRSI

The following Low Pay Commission recommendations were implemented from January 1 2018:

  • Experienced adult worker   €9.55per hour
  • Over 19 and less than 2 years since first job   €8.60per hour.
  • Over 18 and less than 1 year since began first job   €7.64per hour.
  • Aged under 18   €6.69per hour

An experienced adult worker, for the purposes of the National Minimum Wage Act, is an employee who has an employment of any kind in any 2 years over the age of 18.

Of course the national minimum wage does not stop an employer from offering a higher wage.

How to calculate the hourly rate

Under the National Minimum Wage Act 2000, the basic method of calculation is to divide the gross pay by the total number of hours worked. It is necessary to note what pay is taken into account, what hours are included as working hours and what is the pay reference period i.e. over what period the calculation is made.


What is not taken as pay?

The following items are to be excluded from the minimum wage calculation:

  • Overtime or call-out premium
  • Service pay
  • Unsocial hours premium
  • Central fund tips managed by the employer and paid as part of wages
  • Premiums for working public holidays, Saturdays or Sundays
  • Allowances for special or additional duties
  • On-call or standby allowances
  • Certain payments re absences from work – sick pay, holiday pay or pay during health and safety leave
  • Redundancy payments
  • Payment connected with leaving the employment including retirement
  • Contributions paid by the employer into any occupational pension scheme available to the employee
  • An advance wage payment
  • Payment in kind or benefit in kind, other than board and/or lodgings
  • Payment not connected with the employee’s employment
  • Compensation for injury or loss of tools
  • Award as part of a staff suggestion scheme
  • An Employer loan.

So what counts as pay?

For the purposes of the national minimum wage the gross wage includes the basic salary and any shift premium, bonus or service charge.

If the employee receives food (known as board) and/or accommodation (known as lodgings) from the employer, the following amounts are included in the minimum wage calculation:

  • €0.85 per hour worked for board only (calculation at hourly rate)
  • €22.56 for lodgings only per week, or €3.24 per day.


Working hours are whichever is the greater of the hours set out in the employment contract or the actual hours worked or available for work and paid.

“Working hours” include:

  • Overtime
  • Travel time where this is part of the job
  • Time spent on training authorised by the employer and during normal working hours.

“Working hours” excludes:

  • Time spent on standby other than at the workplace
  • Time on leave, lay-off, strike or after payment in lieu of notice
  • Time spent travelling to or from work.


The employer selects the period, known as the pay reference period, from which the average hourly pay will be calculated. This might be on a weekly or fortnightly basis but it cannot be for a period longer than a month.

The employer must include details of the pay reference period in the employment contract given to an employee.


There are exceptions to those entitled to receive the national minimum wage. The legislation does not apply to a person employed by a close relative (a spouse, civil partner or parent) nor those in statutory apprenticeships. Also some employees such as young people under 18 and trainees are only entitled to a reduced or sub-minimum rate of the national minimum wage. 

Exemption for employer

If an employer cannot afford to pay the national minimum wage due to financial difficulty the Labour Court may exempt an employer from paying the minimum wage rate for between 3 months and one year. Only one such exemption can be allowed.

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