Irish hospitality labour costs rose 4% in Q2 2026 — what drove the increase

Most of the increase came from pay

In Q2 2025, the sector’s average labour cost was €19.50 for each paid hour. The preliminary figure for Q2 2026 was €20.27. That is an increase of €0.77 per paid hour, or 3.9%. ^{S1, S2}

Pay accounted for most of the change. Average hourly earnings rose from €17.51 to €18.08, an increase of €0.57. Other employer labour costs rose from €1.99 to €2.19, an increase of €0.20. The two increases add up to the published €0.77 total after rounding. ^{S1, S2}

Why the smaller cost category grew faster

The CSO reports that earnings rose by 3.3%, while other employer labour costs rose by 10.1%. The 10.1% figure looks much larger because it applies to the smaller starting amount of €1.99. In cash terms, pay still added more to the hourly cost: 57 cent compared with 20 cent. ^{S1, S2}

Put another way, about three quarters of the 77-cent increase came from pay and about one quarter came from other employer costs. ^{S1, S2}

What “other employer costs” means

The CSO’s category covers costs outside direct earnings. It includes employer social-security contributions, redundancy payments, other social costs and benefits in kind, after subsidies and refunds are deducted. The release does not break the 20-cent increase down far enough to say which of those items caused it. ^{S2, S3}

One separately reported item, benefits in kind, actually fell from €0.04 to €0.02 per paid hour. It therefore did not explain the rise in the wider category. The evidence does not support blaming the change on a particular tax, policy or employment cost. ^S1

What hospitality operators should take from this

The figures show that changes in pay did not account for the full movement in labour costs. For this sector-wide average, costs outside pay accounted for roughly one quarter of the annual increase. ^{S1, S2, S3}

The figure is a benchmark, not a budget forecast. It is a survey-based estimate of average costs per paid hour for accommodation and food-service enterprises in the Republic of Ireland with at least three employees. A hotel, restaurant, café or catering business may have a very different staffing mix and cost pattern. ^{S1, S3}

How to read the figures

The CSO calculates hourly earnings and other labour costs by dividing each amount by total paid hours. This report compares the published Q2 2025 and preliminary Q2 2026 figures. The one-quarter share is calculated from the rounded published increases: €0.20 divided by €0.77. It is therefore an approximate explanation of the published sector average, not a new survey result. ^{S2, S3}

Limitations

• Q2 2026 is preliminary and may be revised. The accommodation and food-service employer response rate was 37.8%, based on 318 responding enterprises.
• The values are sector averages per paid hour. They are not individual wage rates, inflation-adjusted figures or business-specific costs.
• The data do not show recruitment needs, staff-retention outcomes or the cause of the increase in other employer costs.
• The survey covers Republic of Ireland enterprises with at least three employees in the sectors included by the CSO.