Employers to pay lower PRSI rate for minimum wage earners from October

The threshold for the higher rate of employer PRSI is set to increase, the government has announced.

Minister for Enterprise, Trade and Employment, Peter Burke put forward a plan to support SMEs which included 14 measures.

During the launch, it was confirmed that the threshold for the higher rate of employer PRSI will go from €441 to €496 from October 1 this year.

This means that employers with employees earning the weekly equivalent of the national minimum wage will pay the lower PRSI rate of 8.8pc.

On January 1, the minimum wage increased to €12.70 per hour. However, the threshold for the high rate of PRSI did not increase in line with the change.

The move will improve businesses’ cash flow, Minister for Finance Michael McGrath said.

“The change to employer PRSI to ensure those who are employed on low pay, that the employer has to pay the lower rate of employer PRSI, I think that is appropriate.

“That will also provide an important cash flow benefit to many businesses later in the year,” Minister McGrath said.

It was also announced that the deadline for the Increased Cost of Business scheme (ICOB) will be extended by two weeks.

The scheme offers eligible businesses to apply for a one off payment against their commercial rate bill.

For commercial rate bills less than €10,000, businesses can receive 50pc of the payment and for businesses with a bill between €10,000 and €30,000 the scheme offers a grant of €5,000.

However, last month it was reported that many of the 143,000 eligible businesses across the country had been slow to avail of the free money.

“It is an important injection of cash into your business, and we are all very much aware that cash is the lifeblood of businesses,” Minister for Enterprise Peter Burke said.

For those businesses in the hospitality and retail sector, the government said it will introduce a second payment of ICOB.

The measures will also see the doubling of the Innovation Grant Scheme to €10,000 as well as an increase to the maximum amount available under the Energy Efficiency Grant Scheme.

The maximum grant available will go up to €10,000 and the rate of contribution from businesses will go from 50pc to 25pc.

“These measures represent agreement from across government on the need to support our SMEs in the face of rising costs – while also balancing critical progress in terms of working conditions,” Minister Burke said.

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