First published on Wednesday, October 8, 2025
Last updated on Wednesday, October 8, 2025
Here are the key impacts for small and medium-sized businesses, and what they’ll mean:
Minimum wage increases by €0.65 to €14.15 per hour
VAT reduced from 13.5% to 9% for food, catering and hairdressing
Rising costs for fuel and energy via carbon tax increases
Minimum wage increases – what do they mean for employers?
From 1 January 2026, national minimum wage will increase by 65 cents to €14.15 per hour.
This rise in national minimum wage will increase payroll costs for employers, as well as adding to the admin burden in January, especially for employers who already have tricky shifts and rotas to sort out. You can’t afford to get wages wrong: failure to comply with the National Minimum Wage Act is a criminal offence that comes with a fine of up to €2,500.
How BrightHR can help:
Payroll Navigator: Generate timesheet reports for Revenue, and keep a secure payroll archive to meet your legal requirements. Our navigator supports you with common payroll reports for absence, annual leave, staff information, and payroll exceptions
Shifts and rotas software: Reveal the impact of your rota decisions before they impact your bottom line. You can instantly see the complete cost of every shift you schedule before you announce those open shifts
VAT reduction for food-led hospitality and hairdressers
Good news for food, catering and hairdressing businesses, with a VAT cut from 13.5% to 9%. But the change won’t come in until July next year, and the Restaurants Association of Ireland are warning that the rising costs of supplies, energy and wages will “cripple many businesses before 9% VAT arrives in July”.
The restaurant and hospitality sector is one of Ireland’s largest employers, with over 220,000 employees in the industry. The majority are SMEs who will have to deal with the minimum wage increase and pension auto enrolment in less than three months’ time.
How BrightHR can help:
Pension auto-enrolment webcast for employers: 25% of small businesses are still getting their heads around auto-enrolment. That’s why we’re running a webcast on pension auto-enrolment on Wednesday 22 October. Join Gemma O’Connor, Head of HR Advisory & Technical Services, for a session on compliance. We’ll go through which workers will be auto-enrolled (including casual and seasonal workers and employees on probation), the differences between traditional workplace pensions and My Future Fund, and the actions employers need to take now to be compliant. Still not sure what your auto-enrolment responsibilities are? Save your seat here.
Learn more about the legal changes and your responsibilities
The 2026 Budget certainly represents challenges for businesses. And managing these changes in a short amount of time may seem daunting.
Get ready for 2026 with BrightHR. Our 24/7 HR and legal advice line will help you navigate changes with confidence. And our document library contains expert-written templates, documents and policies that’ll keep your business compliant.
