Helping your business cope with rising employment costs

How to cope with rising employment costs

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Rising labour costs will eat into the profitability of many businesses this year making it more important than ever to get timely, accurate reports from your payroll and bookkeeping systems.

 

If you have employees, it’s likely that wages and salaries are your single biggest cost. So, with labour costs rising, it’s very important to keep up to date and anticipate how the various changes coming into force will affect your payroll.

 

Once you know what to expect, you can then feed this information into your budgets and forecasts where it will help you manage your cashflow more effectively and make better decisions for your business.

So, what labour cost increases are in store in 2024?

 

Among the most significant changes to take into account are:

 

  • An increase in the National Minimum Wage (up by €1.40 per hour to €12.70 per hour from 1 January 2024).
  • The statutory sick leave entitlement (which came into force last year) is rising from three days in 2023 to five days in 2024, seven days in 2025, and ten days in 2026.
  • The parent’s leave entitlement is rising to 9 weeks in 2024. (Note parent’s leave is not the same as parental leave)
  • A new entitlement to five paid days domestic violence leave in a 12-month period came into operation on 27 November 2023. (We discussed this in our article on Additional Leave Entitlements last year).
  • Likewise, Medical Care Leave, which came into effect on 3 July 2023, entitles employees to up to 5 days unpaid medical care leave in any consecutive 12-month period.
  • If you have employees who require a work permit, note that the salary requirement for most General Employment Permit holders increased from €30,000 to €34,000 in January 2024.
  • Pensions auto-enrolment is due to be phased in from late 2024.
  • PRSI contribution rates for employers and employees are set to increase by 0.1% from 1 October 2024.

 

Other recent developments which have payroll implications include the 2024 updated tax rates, bands and reliefs and updated civil service subsistence rates. There are also new reporting requirements for certain employee benefits and expenses. (See Nikki’s recent article on reportable benefits)

 

As is always the case with payroll, it’s important to monitor developments throughout the year and ensure that you anticipate and reflect any relevant changes in your budgets and forecasts. Keep in mind that as well as the cost impact, changes may also have workplace policy and record-keeping implications for your business.

 

Need help?

 

If you are not sure how to get the information that you need from your existing systems, GroForth can help you. We can take a look at your bookkeeping and payroll processes and identify any improvements that may be needed. If necessary, we can also prepare monthly management reports for you. The purpose of these reports is to enhance your ability to control costs, nip potential problems in the bud, improve forecasting and cashflow management, and maximise your profitability. Contact us for details.

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