Living Wage updated to €16.00 per hour for 2026/27
Tues, 29th Sept
The Living Wage Technical Group (LWTG) has published the updated Living Wage for 2026/27 at €16.00 per hour, a 3.9% increase from last year’s rate of €15.40 per hour. This rate is the minimum income required for a single adult working full-time to afford a socially acceptable minimum standard of living in Ireland. The updated rate reflects the impact of rising living costs and policy changes which effect the net salary of a Living Wage worker.
Over the past year, minimum living costs increased by an average of 3.1%, mainly driven by rising household energy costs and rents for the single adult household on which the rate is modelled. Rents increased by 4.7% (almost €11 per week) and household energy costs rose by 29.2% (an average of over €9 per week). These increases placed significant upward pressure on minimum living costs and together account for most of the living cost pressure driving the increase in the Living Wage rate. There has also been a modest increase in the level of PRSI payable on a Living Wage salary.
The ‘My Future Fund’ auto-enrolment pension scheme came into effect this year and has had an impact on the calculation of the Living Wage rate for the first time. Employee auto-enrolment contributions towards a future pension are currently set at 1.5% of earnings. The full incorporation of these contributions, in conjunction with the changes in living costs, results in a calculated reference Living Wage rate of €16.35 per hour. Without this new contribution, the reference rate would be €16.05 per hour.
The Technical Group regarded the combined impact of these increases as too large to introduce in a single year. The auto-enrolment contributions will be phased into the calculation over time. Consequently, the annual increase this year is limited, capping the rate at €16.00 per hour, aligning with the percentage change in earnings in the private sector over the last 12 months.
The Living Wage is the minimum hourly pay required for a full-time worker (without dependents) to afford the goods and services that people have agreed are needed for enabling a basic, yet dignified, standard of living. The calculation is evidence-based drawing on budget standards research undertaken by the Vincentian MESL Research Centre at SVP and reflects the real costs faced by employees in Ireland. The change to the annual Living Wage rate is determined by changes in these living costs and income taxes.
Robert Thornton, Research Manager at the Vincentian MESL Research Centre and LWTG member said:
“The Living Wage rate is informed by research with members of the public establishing what people need to be able to live with dignity. The cost of meeting these needs has risen by 33% since 2020 and as a result the Living Wage needed to meet these costs has also increased. Policy measures can contribute to limiting the potential growth in the Living Wage rate, but currently the gap between the real Living Wage and National Minimum Wage remains significant.”
Dr Nat O’Connor, Research & Policy Analyst, and LWTG member said:
“Low paid workers often struggle with high rents and high energy costs and find it difficult to make ends meet at the end of each week. The Living Wage is calculated to give full-time workers a minimum essential standard of living. The calculated increase to the Living Wage is 3.9%, which is in line with average wage inflation across the economy. It is unreasonable to expect the lowest paid workers to accept anything less than €16 per hour given the cost of living in Ireland today.”
Notes to the Editor
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The Living Wage Technical Group was established in March 2014 and worked to establish a method for calculating the Republic of Ireland Living Wage, which was launched in July 2014. This is the 13th year the Living Wage has been calculated and published by the group.
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The Living Wage Technical Group is supported by: Nevin Economic Research Institute, SIPTU, Social Justice Ireland, Society of St Vincent de Paul, TASC, Unite the Union, UCD School of Social Policy, Social Work and Social Justice, and the Vincentian MESL Research Centre at SVP
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The Living Wage rate is based on the rationale that full-time employment will at least provide for a socially acceptable minimum standard of living for a single person without dependents. It represents the minimum required to meet physical, social and psychological needs, and enable a life with dignity. Having an income below this standard of living means doing without goods and services which are essential for taking part in the norms of everyday life in Ireland.
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This differs from the Government’s living wage which adopts a fixed threshold approach as opposed to the “basket of goods” approach used by the LWTG. The Government’s living wage is intended be set at 60% of the median wage.
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The Living Wage rate is calculated by researchers at the Vincentian MESL Research Centre at SVP. The Minimum Essential Standard of Living (MESL) researchers work with members of the public in deliberative focus groups to reach consensus on what are the minimum goods and services that people need to live and partake in Irish society; enough to meet needs but not wants.
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Recent research from the Working in Ireland Survey1 found that 31.6% of all employees had a net income below the Living Wage, with 21.8% of full-time employees earning below the Living Wage. The research referenced the 2025/26 Living Wage rate of €15.40 per hour, assessing net income per week against the net full-time Living Wage salary, then €543.06 per week.
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The Living Wage calculation method limits the annual increase to the percentage change in hourly private sector earnings in the 12 months prior to the calculation. The change in the 12 months to 2026Q2 was 3.8%. Limiting the rate to a 3.8% increase from the previous rate of €15.40 and rounding to the nearest €0.05 produces a rate of €16.00 per hour.
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A technical document detailing the calculation methodology is also available at livingwage.ie
The Living Wage Technical Group is supported by:
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Nevin Economic Research Institute
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SIPTU
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Social Justice Ireland
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Society of St Vincent de Paul
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TASC
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Unite the Union
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UCD School of Social Policy, Social Work and Social Justice
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Vincentian MESL Research Centre at SVP
