- Changes in laws significantly reduce the net wages of employees and increase the obligations of companies.
- Health contributions for employees increased from 4 to 5 percent.
- Four new tax bands were introduced instead of the original two.
The common denominator is the effort to increase the state’s income. Taxes and levies have increased, the burden of some responsibilities has been transferred from the state to employers, and people will also be affected by the drop in unemployment benefits, summarized the experts of the Humanet HR platform.
“The health insurance rate paid by employees has increased by 1 percentage point from four to five percent last year. Employer rates remain unchanged. The skilled labor burden of health contributions increased to 16 percent, which is an increase of two percentage points in two years,” the experts calculated.
They reminded that until last year, income during temporary incapacity for work (PN), sick pay (OCR) and maternity leave was burdened only by accident insurance to the Social Insurance Company (SP). However, this has changed since January of this year. This income is also subject to all taxes. This applies, for example, to rewards achieved during this period.
Instead of the previous two income tax rates, four tax bands were introduced this year. “The tax of 19 percent will be paid this year by everyone whose taxable earnings do not exceed 3,665.28 euros per month. Previously, it was 4,186 euros. The rate of 25 percent will be paid by employees from the part of the taxable salary exceeding 3,665.28 euros and up to 5,029.10 euros. A higher rate of 30 percent will be paid by employees from the salary over 5,029.10 euros and less than 6,250.86 euros. And the highest tax rate of 35 percent will be paid by employees on taxable wages exceeding 6,250.86 euros,” the company explained.
This year there will be fewer days off. The holiday on November 17 ceased to be a holiday permanently, it also changed temporarily on May 8 and September 15. According to experts, this measure will negatively affect employees and has an impact on the breakdown of additional payments and wage rules of employers.
Changes that have a negative impact on income include a reduction in unemployment benefits. This benefit decreases from the fourth to the sixth month of receiving it. “By the third month, 50 percent of the daily assessment basis remains at the previous level, but in the fourth month it is only 40 percent, in the fifth month 30 percent, and in the sixth month 20 percent,” explained the experts.
According to them, this year is the most significant intervention in the wage area in recent years. Although consolidation measures increase state revenues, they also reduce the disposable income of employees and increase the administrative and financial burden on companies.
“If we were to summarize the changes in one sentence, they mean less money in net for employees and more obligations for employers. “Companies must quickly adapt to the new wage regime, which interferes with the calculation of levies, taxes and wage supplements,” assessed humanet payroll methodologists Klaudia Sehnalová and Alexandra Luptovcová. They pointed out that in addition to the company’s consolidation measures, this year the implementation of the directive on transparency of remuneration and the directive on platform work, which will bring new requirements for internal processes, reporting and management of remuneration, are expected this year.
