Budget 2019 – Key Takeaways for Employers and Employees

Taoiseach Leo Varadkar announced last night that Budget 2019 would make a real difference in people’s lives by putting money back in people’s pockets. Increases in social welfare payments were pledged along with reductions in USC and income tax. Family-friendly measures which seek to make childcare more affordable were also promised. The clear message from the government was that our national economic growth should translate into rising living standards.

How will employers feel the impact of Budget 2019?

Given that the political pressures of the housing crisis and healthcare reform almost certainly exerted the greatest influence on this year’s budget, we now take a look to see how exactly the government’s budgetary decisions will impact on both employers and employees.

Budget 2019 – an employer perspective

SME supports

€950 million has been allocated to the Department of Business, Enterprise and Innovation. This represents a 9% increase on last year and will be used to support the SME sector during a period of uncertainty caused by Brexit.

VAT changes

Special VAT rate of 9% in the hotel and restaurant sector to be increased to 13.5%.

Special VAT rate of 9% for hairdressers to be increased to 13.5%.

Reduction in VAT for electronic newspapers from 23% to 9%.

Printed newspapers to continue to enjoy VAT rate of 9%.

The changes in VAT will be most disappointing to employers in the hospitality sector which supports over 200,000 jobs. The increased VAT rate will undoubtedly impact on the sector’s ability to continue to generate employment particularly in light of its exposure to a bad Brexit outcome.

National Minimum Wage

The minimum wage increase of €0.25 to €9.80 has been confirmed. The increase may exert pressure on the payrolls of certain employers.


The weekly threshold for the higher rate of employer’s PRSI will be increased from €376 to €386.  This change is intended to “ensure that there is no incentive to reduce working hours for a full-time minimum wage worker”.

Paid parental leave

Two weeks’ paid parental leave will be introduced in November 2019. An incremental increase of up to 7 weeks’ paid leave to every parent of a child under one year of age will be introduced over time. Employers will have a full year to ensure they are prepared for the introduction of this benefit which is more likely to be availed of by both parents.

Budget 2019 – an employee perspective

Middle-income earners

The point at which people hit the 40% rate of income tax will rise by €750 to €35,300 for single workers.


The 2% rate of USC currently levied on income over €12,012 and under €19,372 has been increased by €502 to ensure that a full-time worker on the minimum wage will remain outside the top rates of USC.

The third rate of USC currently levied on incomes between €19,300 and €70,000 will be reduced from 4.75 % to 4.5%. This measure will see a worker at the top end of this band increase their disposable income by around €175 a year.

Working families

The Home Carer Credit is increased by €300 bringing the value of the credit to €1,500 per year. This will assist families where one spouse works primarily in the home to care for children or other dependants.

Paid parental leave

The introduction of paid parental leave is likely to be welcomed by working parents of young children who are experiencing significant pressures with childcare costs.

Affordable childcare scheme

The income thresholds for the Affordable Childcare Scheme will increase next year.

In net terms

  • the base income threshold is being raised from €22,700 to €26,000;
  • the maximum income threshold will go from €47,500 to €60,000; and
  • the multiple child deduction will increase from €3,800 to €4,300.

The expansion of this scheme is intended to allow more workers to access childcare and to encourage people to return to work.

Brexit challenges and border county investment

The Minister for Finance, Paschal Donohoe’s presentation began by putting the challenges posed by Brexit at the forefront. Notably, for border county employers, Mr. Donohoe confirmed that Project Ireland 2040 includes comprehensive investment in cross-border and all-island projects which are intended to promote growth in the border region.

If you have any queries on how Budget 2019 will affect your business, please call our advice service on 1890 253 369

Book a call with a consultant

Complete the form below and a consultant will call you as soon as possible.

Book a call with a consultant

Complete the form below and a consultant will call you as soon as possible.

Latest Resources

Employer’s guide to lay-offs in Ireland

It’s common for businesses facing a downturn in trade to let employees go on a temporary basis. As an employer, you may also need to […]

Long-term sickness absence: When to conduct an informal welfare meeting

Everyone gets sick, so short-term sickness absence is something all employers will have to deal with from time to time and tends to cause minimal […]

Notice periods: an employer’s guide

Within a business, it’s constantly necessary to re-evaluate and adjust workforce planning. Whether this is due to employees looking for different career paths or the […]

Olga Shevchenko

Director/Advocate, Immigration Advice Bureau

Olga Shevchenko specialises in immigration advocacy and consultancy, in particular, employment permit, visas, family reunification, citizenship, etc, for those seeking to visit, reside or invest in Ireland.

Olga provides extensive information, knowledge, and support to her clients, enabling access to positive solutions for people struggling to handle the immigration law.

Minister Neale Richmond

Minister of State, Department of Enterprise, Trade and Employment

Neale Richmond TD was appointed as Minister of State at the Department of Enterprise, Trade and Employment with special responsibility for Employment Affairs and Retail Business and the Department of Social Protection in January 2023.

Much of his work at the Department of Enterprise, Trade and Employment is with businesses, workers, their representative bodies and the State Agencies to ensure that the economic recovery and growth extends to all parts of the country. He works closely with the SME sector, including retail, on building resilience and on the transition to the green and digital economies.

Mark Carpenter

Director of Regulatory & Corporate Affairs, Sky

Mark Carpenter is Director of Regulatory & Corporate Affairs at Sky Ireland. In this role he has responsibility for External and Internal Communications, Public Policy and Regulatory Affairs and the company’s ‘Bigger Picture’ (CSR) programme. He also works closely with Sky Group teams on a variety of matters, in particular our partnerships with domestic broadcasters.

Prior to working at Sky, Mark worked as a Policy Officer in Houses of the Oireachtas and as a Management Consultant at Accenture. He has a BA in History from Oxford University and a PhD in Political Science from Trinity College Dublin.

Nora Cashe

Litigation and Compliance Manager, Peninsula

Nóra studied Law in Griffith College Dublin and qualified as a Barrister in 2008, practising in the area of Criminal law. She is also member of the Irish Employment Law Association.

Nora has extensive experience representing clients at Employment Tribunal hearings, Conciliation / Mediation meetings before both the Workplace Relations Commission and the Labour Court. 

Nóra is a member of the Irish Employment Law Association and engages with the WRC Adjudication Service as part of their stakeholder engagement forum.

Deiric McCann

Managing Director, Genos International Europe

Deiric McCann leads Genos International Europe – The EU division of a world-leading provider of emotional intelligence solutions. 

With over two decades experience at the highest levels of management, Deiric supports clients to develop the resilience, emotional intelligence, psychological safety and engagements of their employees.

Rhiannon Coyne

Senior HR Consultant, Graphite HRM

Rhiannon Coyne is a Senior HR Consultant at Graphite HRM and will be providing an overview of best practice on how to deal with complaints of bullying and harassment in the workplace. 

With a number of recent updates to employment laws, Rhiannon will take a closer look at employment equality and how it is interlinked to Health & Safety and what employers can learn from recent case laws.

David Begg

Chairman, Workplace Relations Commission

David Begg was appointed Chairperson of the Workplace Relations Commission (WRC) in January 2021.

David is also a professor at Maynooth University Institute of Social Sciences. Mr Begg’s extensive history in the trade union movement included leading the ESB Officers Association and Irish Congress of Trade Unions, stepping away from the latter in 2001 to chair international aid agency Concern.

David Begg was also previously a director of the Central Bank of Ireland between 1995 and 2010.