In a widely expected move, the Low Pay Commission is to recommend a 50c increase in the minimum wage from €8.65 to €9.15.
In a report submitted to Government, the commission said that the evidence suggested that a moderate increase would not lead to significant job losses.
The commission took into account the fact that the economy was recovering and competitiveness had improved.
Welcoming the recommendations, Taoiseach Enda Kenny said the Government believed that work should pay more than welfare and the report would be addressed in October’s budget.
Tánaiste and Minister for Social Protection Joan Burton said she had put the commission on the agenda for Labour when she became Tánaiste.
Referring to the risk of low-paid workers losing money in tax after the increase, she said any potential anomalies would be tackled in the Budget.
The Low Pay Commission found that just over 70,000 workers or 4.4% were on the minimum wage, two thirds of whom worked fewer than 35 hours a week.
Two thirds of those on the minimum wage were female and 39% were under 30.
As well as recommending an increase in the minimum wage it said changes were needed to tax and PRSI if the increase was not to adversely affect those on low pay.
Three members of the commission wanted a higher figure and did not agree with the figure arrived at, with ICTU President Patricia King suggesting it should have been set at €10.
Minister of State Ged Nash said it is important "we make work pay and incentivise people to take more hours".
Speaking on RTÉ's Six One, he said 122,000 people will experience an immediate pay increase after the introduction of the new rate.
He said the said the increase is a result of a "balanced, evidenced-based approach to setting the minimum wage" with recommendations from "employers, trade unions, and academics."
