Employers group IBEC has warned the Government that any increase in labour costs would cost jobs and undermine the economic recovery.
In its pre-Budget submission, IBEC also said that collecting the new property tax through the income tax system was the wrong approach.
It said it would make taking up a job less attractive and also risked fuelling wage pressures.
''The €3.5 billion adjustment is just about right, but it needs to be done in a way least damaging to growth,'' said IBEC director general Danny McCoy.
''Any increase in labour costs will make companies less likely to take on new staff and will push already struggling firms out of business. We desperately need to create new jobs - raising tax on work is the last thing we need,'' he added.
IBEC claims that the Government's proposal for an extra tax on jobs through a statutory sick pay scheme would cost at least 3,500 jobs both directly and indirectly in the economy. Any increase in PRSI would have a similar negative effect.
Mr McCoy also said it is essential that a new property tax is not perceived as a tax on work. ''Collecting the property tax through the income tax system will discourage work and fuel wage pressures, which will make creating new jobs all the more difficult,'' he said.
IBEC said that a package of measures to support growth, which involves no net additional costs to the Exchequer, should be introduced with steps to raise revenue and cut expenditure.
''Austerity alone is not the answer, we need Government to deliver the conditions for economic growth. We need an ambitious growth strategy that supports investment, addresses the weakness in the domestic economy and rebuilds confidence,'' Mr McCoy said.
