The Manx living wage scheme will help vulnerable people on the island "have a better life", said the government.
Tynwald last month introduced a Manx Living Wage rate of £8.61 per hour - £1.11 more than the minimum wage.
While companies are legally obliged to pay the minimum wage, it is up to managers to decide whether to offer the living wage to their employees.
Chief Minister Howard Quayle said: "I am a passionate believer in the impact it can have on the most vulnerable."
He added: "It will not happen overnight and we will not get it right straight away but a journey of 1,000 miles starts with a single step. Today is the start of that journey."
'Better quality of life'
The island's living wage has been calculated by the Economic Affairs Division. It says the hourly Manx living wage is 16p more than in most of the UK because of "increased travel and delivery costs incurred by Manx residents".
The Isle of Man rate would amount to an annual salary of £16,795.
Bill Henderson MHK said its introduction would mean lower income families "will have a better quality of life" and enable them "to put something more than cheap meals on the table for the family."
In the UK more than 3,000 employers became accredited by the Living Wage Foundation after the scheme was introduced in 2016.
In the Isle of Man the government intends to establish a similar form of accreditation, allowing companies to promote themselves as Living Wage employers.