What Employers can expect in Budget 2022
With Budget 2022 set to take place on Tuesday 12th October, many business owners are already considering how their employer’s commitments and employees’ salaries are likely change.
At Paycheck Plus, our payroll experts have been combing through the various ministers’ comments to see what changes are likely to be implemented as part of Budget 2022 and how it is likely to impact on your business.
The Minister for Finance Paschal Donohoe has already indicated that a “€500 million tax package will be delivered as part of [the] Budget” and the possibility of income tax, welfare and pension reform seems likely following Tánaiste Leo Varadkar’s comments at an Ibec members’ event last month.
Mr. Varadkar told business leaders “Given the economic figures that are informing our pre-budget discussions, I am confident that we are in a position to – and need to – include a pension, welfare and personal income tax package in next month’s Budget.”
The Tánaiste also intimated that he wants push through a series of reforms, which are likely to impact flexible working, occupational pensions, auto-enrolment, minimum wage rates and statutory sick pay. Following recent reports regarding the “living Wage”, the Tánaiste has acknowledged that wages and allowances need to increase. The possibility of increasing the minimum wage and providing clearer regulations around tips and gratuities has already been mooted. How this will be funded is not yet known but the Tánaiste has already suggested that “modest increases in PRSI might be justified”.
Retail workers may also be in line for monetary bonuses and/or time off in lieu. Following Taoiseach, Micheál Martin’s comments that he wanted to give back something that would “reflect the contribution” of the efforts of many workers, in “many sectors” during the pandemic, not just the traditional frontline workers like nurses and gardaí.
The budget will also be used to promote remote working with updates to remote working allowances – such as the eWorking allowance – looking likely. The Minister for Enterprise, Trade and Employment has already made comments to this effect claiming that remote working “is going to be a big part of the future and particularly can be beneficial in terms of work-life balance”.
Ministers are also thought to be considering a range of possible options for the future of the Employment Wage Subsidy Scheme (EWSS). Any changes that are made will not come into effect before November however, as the Minister for Finance has already announced that there will be no change to the (EWSS) for the month of October, with the thresholds and rates for the EWSS remaining unchanged.
A €4.7 billion package is expected to be finalised soon, but room for manoeuvre is limited with reports suggesting that as much as €500million could be taken up with welfare increases, and a similar sum will be required to stem soaring health service waiting lists.
While much is not yet known, employer’s commitments look set for a considerable amount of upheaval, and as always Paycheck Plus will be on hand to help our clients navigate through this new terrain. Clients can register here for our Post Budget Webinar which will take place on the 12th November at 19:30.
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