The Government is set to raise the thresholds for employer PRSI payments in the budget, as a step towards mitigating the potential effects of predicted increments in the minimum wage. This plan mirrors actions taken earlier in the year to alleviate the ramifications of the prior year’s rise in minimum wage, which Government officials had deemed essential to aid in reducing the strain caused by business cost hikes as a result of government-initiated alterations.
Budget day is expected to include the introduction of this action following dialogues between Peter Burke, the Minister for Enterprise, and his Fine Gael collaborator, Heather Humphreys, the Minister for Social Protection. According to insiders, there is an ongoing initiative to establish this measure as a recurrent feature accompanying rises in the minimum wage.
The previous year’s modifications in response to the minimum wage hike raised the threshold for the superior rate of employer PRSI from €441 to €496, meaning businesses pay an 8.8% PRSI rate until reaching that amount. The value of the upcoming increased threshold remains unknown, however it will relate to the new, heightened minimum wage.
As per Low Pay Commission recommendations, the Government is predicted to amplify the minimum wage. A wage increment of roughly 80 cents per hour, going from €12.70 to €13.50 per hour, is projected. In addition, ministers seek to advocate for business grant supports. A Fine Gael insider categorised this move as “vital to reducing costs on family-run businesses”.
In its alternative budget being released on Wednesday, Sinn Féin is forecasted to vie for small business votes. The party plans to propose an employer PRSI rebate scheme created to assist entities affected by its future proposal to enforce a living wage over the ensuing years. The rebate would cut down on employers’ PRSI responsibilities and be assigned to businesses for each staff member within a certain salary band, up to a ceiling of €651.
The party confirms it would provide the greatest assistance to firms most affected, without promoting lower wages. The compensation an employer could potentially get would equate to roughly 2 per cent of the gross weekly salary. The annual cost of this plan, as evaluated by the Department of Social Protection, is set at €250 million.
In a measure aimed to prevent using this scheme as an incentive to pay minimum wage, the credit would be implemented on a tapering basis.
The Green Party have already targeted small businesses for their support by offering a €175 million rates rebate dispersed among about 100,000 smaller enterprises, aiming to assist them in managing their expenses and enhancing visitor numbers in town centres.