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The Living Wage for 2026/27 is €16.00 per hour. This is a €0.60 (3.9%) increase from the 2025/26 rate of €15.40 per hour. It represents the minimum rate required for a full-time worker (without dependents) to afford the goods and services that people have agreed are essential for enabling a life with dignity.
The Living Wage rate is calculated by researchers at the Vincentian MESL Research Centre at SVP building on the evidence from the Minimum Essential Standard of Living (MESL) work. The rate is reviewed and published by the Living Wage Technical Group. It reflects the real costs faced by employees in Ireland. The change to the annual Living Wage rate is determined by changes in living costs and income taxes.
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 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.
This differs from the Government’s Living Wage which adopts a fixed threshold approach as opposed to the “basket of good” approach used by the LWTG. The Government’s living wage was due to be set at 60% of the median wage by 2026, but is now due to reach this threshold by 2029.
A Living Wage is intended to establish an hourly wage rate that should provide employees with sufficient income to achieve an agreed acceptable minimum standard of living. In that sense it is an income floor; representing a figure which allows employees afford the essentials of life. Earnings below the Living Wage suggest employees are forced to do without certain essentials so they can make ends-meet.
Further details on the Living Wage and on the methodology used to calculate the hourly Living Wage rate can be found on livingwage.ie