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Two very important measures concerning private sector workers will take effect on January 1 of the new year. It involves the reduction of three percentage points in insurance contributions and the suspension of the imposition of a special solidarity contribution.
The simultaneous implementation of these two measures will have the effect of increase from 1.45% to 10.43% the net amounts of monthly salaries that will be received by hundreds of thousands of private employees beginning in January 2021.
In particular, from 1-1-2021:
The monthly withholdings for insurance contributions will be reduced from 8 to 78 euros for employees with a gross monthly salary of 650 to 6,500 euros. Monthly income tax deductions will remain zero for employees with gross monthly income of 650 to 780 euros and will increase from 0.80 to 34.32 euros for employees with gross income monthly salaries above 780 and up to 6,500 euros. These small increases in income tax deductions are due to the fact that, due to the reduction in insurance contributions, from 1-1-2021 the taxable monthly earnings will increase, that is, those that will remain after the deduction of the insurance deductions. Therefore, income tax deductions will be calculated as of 1-1-2021 on the increase in taxable monthly earnings resulting in an increase.
Monthly special solidarity contribution reserves It will remain zero for those employees who receive a gross salary of up to 1,000 euros per month and will now be zero for those who receive a gross salary greater than 1,000 euros, due to the temporary suppression of this contribution for 2021 salaries in the private sector .
See a detailed table with the increase based on the salary amount HERE
The temporary abolition of the monthly deductions of special solidarity contribution from private sector salaries will only benefit those employees who receive amounts of gross remuneration (salary amounts before deducting insurance premiums, income taxes and deductions of special solidarity contribution). more than 1,000 euros per month or taxable amounts of earnings greater than 858 euros per month.
Read more here
