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If the new government does not review taxes or proposed levels, such as the minimum wage, after the elections, many will see a few extra euros “in their hands” next year.
The situation of those who earn less than the minimum will not change at all, their reward will not change.
A person who receives an average salary (around € 830 “in hand”) will see a salary of around € 3 more next year.
Those who earn about 1,500 euros “in their hands” can expect an additional 5 euros next year. These trends are shown by the Delfi calculator prepared according to the taxes that will come into effect next year.
According to the preliminary budget, the main tax rates will not change next year: the personal income tax for employees will reach 20 percent and the amount of Sodra fees (health and social security) will reach 19.5 percent. .
However, wages will increase with the change in tax relief – the tax-free income amount (NPD) formula, which will apply to an even wider circle of people. This change is planned for after 2019. implementation of the tax reform.
Wages will continue to rise and the planned monthly minimum wage (MMA) will increase slightly for virtually all workers covered by the NPD.
What changes for those who receive the lowest incomes?
Those who win the minimum will receive this year 429 euros. Next year, with the entry into force of the new MMA, the minimum wage will reach € 449.15. The increase in the minimum wage (from 607 to 642 euros on paper) will mainly contribute to this, and the variation for the NPD will be only 1.34 euros.
However, if employees are paid less than the minimum wage, and this is their only job, the wage “in their hands” will not change at all and employers will “suffer” more.
Associative photo.
The floor called “Sodra” applied in the country, which determines that social security contributions per employee cannot be less than the minimum wage. This year it is 118 euros, next year 125 euros.
For example, if an employee is paid € 100 on paper, only € 20 is deducted from Sodra. This year, the employer Sodra has to pay an additional 110 euros for other contributions and fees, next year – already 117 euros. The employee would receive 77.5 euros each year and the next year.
The roof of Sodra is coming down: the progressive rate is activated
Next year, the bill on the roof of Sodra will be even smaller, since it will no longer be necessary to pay contributions to Sodra – for those who earn a lot (about 4000 thousand euros “in hand” and more) it will add 144 euros, because in instead of “progressive” social security rates 32 percent. Income tax rate.
Next year, the Sodra ceiling will apply to those employees whose annual salary exceeds 60 average wages, or 5 average wages per month.
The biggest benefit is for those with higher incomes.
The new NPD formula will add more euros to those with above-average income. For example, a person who earns around € 800 “in their hands” will receive an additional € 2.6 next year when they accumulate in a pension fund.
At € 1,000, the salary increase will already be € 3.39, at € 1,400 an additional € 4.88, and those who win € 1,500 “in their hands” will receive an additional € 5.25.
Around € 1,650, the difference between last year and this year no longer exists.
However, not everyone will experience growth alone.
Those who have chosen to accumulate in a pension fund, but have chosen a transition period, will pay higher contributions to pension funds next year: not more than 2.1%, but 2.4%. This will take away the benefits of the tax change and a few extra euros from the salary “in hand”.
For example, when this year’s salary is 800 euros and is accumulated in a pension fund with a transition period, next year 1.23 additional euros will be allocated to savings. The higher the person’s salary, the higher this amount will be. For example, a person who receives € 2,000 will already earn € 10 less next year.
Calculator assumptions
The calculator is preliminary and evaluates invalid legal acts or registered proposals that have not yet been adopted by the Seimas.
The calculator assumes that the employment contract is for an indefinite period, the workplace is one and the main one (Sodra floor is used when the salary is below the minimum).
It is strictly prohibited to use the information published by DELFI on other websites, in the media or elsewhere, or to distribute our material in any way without consent, and if consent has been obtained, it is necessary to indicate DELFI as the source.
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