As 2025 came to a close, some notable updates emerged that are worth highlighting.
New Guidance on Termination Payments
The Irish Revenue Commissioners updated their guidance on the taxation of ex-gratia payments made on termination of employment. In relation to the Standard Capital Superannuation Benefit (‘SCSB‘), the guidance confirms that weeks beyond the standard 36 months may be taken into account when determining average remuneration, if the employee has taken unpaid leave during that time. See: Part 05-05-19 – Taxation Treatment of Termination Payments on Retirement or Removal from Office or Employment
Salary Thresholds for Employment Permits
The Government has published a roadmap which outlines a gradual approach to increasing minimum salary thresholds for all employment permits. The published document is available here.
Employment (Contractual Retirement Ages) Act 2025
This Act gives employees the right to refuse early retirement and seek compensation if unjustly retired before the State Pension Age (currently 66). The Act also prohibits penalisation of employees who issue a non-consent notification and introduces a criminal offence for employers who fail, without reasonable cause, to provide a reasoned written reply. Although enacted on 16 December 2025, a Commencement Order is required before the changes introduced by the Act become effective. See our article here.
Revised EWC Directive Adopted by the EU
This Directive revises the 2009 European Works Council (‘EWC‘) Directive and came into effect on 31 December 2025. It must be transposed into Irish law by 31 December 2027. The revisions brought under the Directive seek to make the representation of workers in large multinational companies more effective by, e.g. clarifying the definition of “transnational matters” and strengthening consultation rights. Ireland’s current implementing legislation will require substantive revision to give effect to the Directive (the Transnational Information and Consultation of Employees Act 1996). See the full text of the Directive here.
Statutory Minimum Wage Increase
From 1 January 2026, the national minimum wage has increased from €13.50 to €14.15 per hour.
Auto-Enrolment Pension Scheme Comes into Effect
‘MyFutureFund’, commenced with effect from 1 January 2026. Regulations have recently been enacted which introduce a minimum contribution rate of 3.5% of an employee’s gross pay, with a minimum of 1.5% from the employer. This applies to defined contribution schemes and will not impact non-contributory schemes, provided that the employer contribution is at least 3.5% of gross pay. For further detail, see our article here.
If you have any queries in relation to the above, please reach out to your usual Littler contact.
