Spring Memorandum: Higher minimum wages and kilometer allowance
Minimum wages will increase more rapidly from 2023. While these wages normally rise each summer in line with collective labor agreement wages, the next three years will see an extra increase of 2.5 per cent a year. The increase set out in the Cabinet’s Spring Memorandum was originally planned to be introduced in two phases from 2024, but the starting date has now been brought forward by a year. As well as the approximately 438,000 employees on the minimum wage, the rise will also benefit people receiving a state pension or social welfare.
Click here for details of the minimum wages as at 1 July 2022.
As well as higher minimum wages, the travel allowance that can be paid tax-free now looks likely to rise faster than previously planned. The government is reserving EUR 200 million over the coming years to allow an increase from 19 cents to 21 cents per km in 2023 and to 23 cents in 2024. This is intended to compensate employees to some extent for higher fuel costs. The exact amounts employers can choose to pay their employees tax-free will be announced on Budget Day in September.
We will let you know as soon as more details are announced. In the meantime, feel free to contact our HR experts if you have any salary or travel allowance-related questions.