Spiralling business costs are impeding small businesses from hiring staff

The Low Pay Commission is expected to recommend to the Government an increase of 5 per cent to the National Minimum Wage.

The rate is currently at €13.50 an hour and an increase of 5 per cent would bring the rate to €14.17 an hour.

Reacting to the proposal, Small Firms Alliance (SFA) Director David Broderick blasted the increase as one that “flies in the face of reality.”

“Spiralling business costs are impeding small businesses from hiring more staff, expanding operations and making further investments into their businesses.

‘Many small businesses will not be able to cope with this latest hike in the minimum wage as it will raise all other wage brackets on a pro rata basis,” said Mr Broderick.

“The minimum wage has increased every year since 2017. After several turbulent years, what small business owners need now is breathing space.

‘If government choses to accept this proposal, it will suffocate small businesses.”

“The Small Firms Association has renewed its call for the Government to introduce a temporary PRSI rebate in Budget 2026 to help small business owners cope with rising labour costs.

‘The SFA has been calling for this rebate for over a year and has included it in its recent pre-budget submission.  Failure to act on this will devastate the livelihoods of small owners in communities across the country.”

The CEO of Retail Excellence Ireland, Jean McCabe was “stunned and flabbergasted” to hear about the recommendation, adding that it could be the “nail in the coffin” for a lot of small businesses.

Recently, the SFA commissioned a survey, conducted by Amárach which showed that almost third of small businesses reported an increase in labour costs in the past 12 months.

Almost half of small businesses reported increases in costs overall.

‘The survey also stated that 81 per cent of small business owners said that the Government needs to do more to help small businesses, up from 74 per cent in last year’s survey.