Payroll Adjustments for year 2025

Janice Galea

Array

13 January, 2025

As part of the government's budget announcement for the new year, several significant payroll changes have been introduced that will affect both employees and employers in 2025. These changes include adjustments to tax brackets, increases in minimum wage, and updates to social security and pension contributions.

These payroll adjustments will be effective as from 1st January 2025 and are being summarised below:

Cost of Living Adjustment

Full Timers:     Eur 5.24 per week

Part Timers:    Eur 0.13 per hour

Minimum Wage

Aged 18 years and over - € 221.78 per week

Aged 17 years - 215.00 per week

Aged below 17 years - € 212.16 per week

Public & National Holidays for the year 2024:

Wednesday, 1st January                                 New Year's Day,

Monday, 10th February                                   Feast of St Paul's Shipwreck

Wednesday, 19th March                                 Feast of St Joseph

Monday, 31st March                                       Freedom Day

Friday, 18th April                                             Good Friday

Thursday, 1st May                                           Workers' Day

Saturday, 7th June                                          Sette Giugno

Sunday, 29th June                                          Feast of St Peter and St Paul

Friday, 15th August                                         Feast of the Assumption

Monday, 8th September                                  Victory Day

Sunday, 21st September                                 Independence Day,

Monday, 8th December                                   Immaculate Conception

Saturday, 13th December                                Republic Day

Thursday, 25th December                               Christmas Day

Vacation Leave Entitlement

An employee with a 40-hour working week is entitled to 224 hours of paid annual leave; that is, 192hrs basic leave entitlement + 32hrs, in lieu of the 4 Public Holidays that fall on weekends. This is calculated on the basis of a 40-hour working week, and an 8-hour working day. If the average normal hours (excluding overtime) calculated over a period of 17 weeks is below or exceeds 40 hours per week, the vacation leave entitlement in hours should be adjusted accordingly, as provided for in the Organisation of Working Time Regulations. When an employee is in employment for less than 12 months, s/he shall be entitled to a proportionate amount of annual leave.

It is only possible to carry forward up to 50% of the annual leave entitlement to the following year if there is an agreement with the employer. Such vacation leave carried forward from the previous year shall be utilised first and may not be carried forward again.

Unless otherwise agreed to in any applicable collective agreement, the employer may utilise up to the equivalent in hours of twelve working days from the annual leave entitlement for the purposes of any type of shutdown.

Tax Rates

Effective from this year, the tax bands for all computations (single, married and parent rates) have been widened, providing tax reductions for any individual. The new applicable tax bands shall be as follows:

Tax on Part-time Work

Tax rate applicable to income from part time work shall be taxed at the rate of 10%.

Tax on Overtime Individuals who are employed on a full-time basis, working in a non-managerial position and earning a basic weekly wage of not more than €375 (per week) will be taxed at a flat rate of 15% tax for the first €10,000 of overtime earned in a year.

Class One National Insurance Contributions

Class Two National Insurance Contributions

Sickness/ Injury Benefit

Daily rates as from 1st January 2025: