MOre than half of Irish companies plan to hike pay for employees this year, according to a survey by employers lobby group Ibec.
In all, 57pc of companies plan to increase pay but the average increase will only be 2pc, Ibec added.
Last year, half of all companies increased pay, while the other half kept rates unchanged.
"Pay will increase for most in 2015, but not all," Ibec chief executive Danny McCoy said. "The economy is recovering strongly, but we have a long way to go.
"The economy in money terms is still about 6pc below its pre-crisis peak and overall price levels are below where they were in summer 2008. This needs to be reflected in pay expectations. Many companies remain in survival mode and simply cannot afford pay rises," he added.
Ibec said companies also plan to take on more people, so the total pay bill for 55pc of companies will increase in 2015.
Increases in pay are most likely in high-tech sectors, such as medical devices where 91pc of companies expect to boost basic pay.
Pharmaceuticals and electronics are also good sectors with the vast majority expecting pay hikes.
Big companies are also good. Three out of five companies with more than 50 employees expect to increase basic pay in 2015, compared with just over half of respondents with fewer than 50 employees.
Mr McCoy said the Government must also do more to boost take home pay by cutting taxes: "Despite welcome moves to reduce the income tax burden in the last budget, there is scope to do more," he said.
High taxes are a "serious disincentive to work, taking a promotion or doing overtime. Further income tax cuts are needed," Mr McCoy added.