Slovakia Salary Guide 2024: Calculate Net Salary, Taxes, and Insurance Contributions.
Navigating the complexities of salary calculations in Slovakia for 2024? Our comprehensive guide breaks down the process, making it accessible and easy to understand. From detailed insights into mandatory insurance contributions to understanding diverse tax rates, this article covers it all. Empower yourself with the knowledge to accurately compute your net and annual salary in Slovakia.
In this post, join Pexpats to find more on:
- How to calculate employee monthly net and annual net salary
- Mandatory employee and employer insurance contributions
- How to calculate annual taxable income
- The different tax rates in Slovakia
- Tax relief, discounts, and bonuses
- Examples of employee personal income tax declarations
- Pexpat’s handy, online employee net salary calculator
How to calculate employee taxable income?
How to calculate employee taxable income?
A full-time employee’s net salary in Slovakia is what remains from gross salary after mandatory insurance contributions and taxation. For example, both the employee and the employer make monthly contributions to various health and social insurances. The employee can then calculate personal income tax by subtracting total employment contributions from gross annual salary.
What remains is the employee’s annual taxable income (the so-called “tax base”). Annual tax base (except for income from business activity, capital and dividend income) up to EUR 47 537.98 is taxed at 19% above the limit at 25%. There are then forms of tax relief, tax discounts, and tax bonuses employees can claim to lessen their tax burden. After applying these, the remainder is the employee’s annual net salary.
Your taxable income under permanent employment in Slovakia is what we refer to as the ‘tax base’. The tax base accounts for earnings over a taxable calendar year after mandatory employer-employee insurance contributions. It can also take into account additional tax relief, discounts, and bonuses the employee may be entitled to receive. To simplify:
- Taxable income = Annual Gross Salary - Total Contributions - Relief / Deductibles
How much income tax do employees pay in Slovakia?
How much income tax do employees pay in Slovakia?
By law, income from permanent employment in Slovakia must contribute a certain percentage into various social funds. The rate is subject to revision from year-to-year, and varies in amount from the employee to the employer.
The minimum wage for 2024 is set at 750 EUR.
In 2024, the employer must contribute 36.20% on top of the employee’s corresponding gross salary into social funds. The employee is responsible to contribute 13.4%, which they pay monthly out of their gross salary.
Personal income tax then has two different tax rates. Which tax rate the employee falls under depends on how much they earn annually.
What are the tax rates in Slovakia?
What are the tax rates in Slovakia?
The two tax rates in 2024 in Slovakia are 19% and 25%. These rates are adjusted annually, and entail income thresholds which determine the tax rate individuals must pay.
In 2024, the tax rates are:
- 19% - For annual taxable income up to EUR 47 537.98 (not including income from business activities, capital income, and dividend income)
- 25% - For annual taxable income over EUR 47 537.98 (not including income from business activities, capital income, and dividend income)
How much do employees pay for mandatory insurance?
How much do employees pay for mandatory insurance?
The employee contributes 13.4% of gross salary into various social insurances. These include contributions into the following.
- Social Security Retirement - 4%
- Disability Insurance - 3%
- Sickness Insurance - 1.4%
- Unemployment Insurance - 1%
- Health Insurance - 4%
Example employee income tax calculation:
Let’s look at an example employee personal income tax calculation. Say an employee makes EUR 800 gross per month. Below is how we would calculate monthly insurance payments, taxes, and the remaining net salary.
- Gross employee salary = EUR 800 per month.
- Health Insurance = 800 x 4% = EUR 32
- Sickness Insurance = 800 1.4% = EUR 11.20
- Retirement Social Security = 800 x 4% = EUR 32
- Disability Insurance = 800 x 3% = EUR 24
- Unemployment Insurance = 800 x 1% = EUR 8
- Total Contributions = EUR 107.20 per month
In this case, the tax base = 800 - 107.20 = EUR 660.80. However, all individuals in 2024 can also claim EUR 470.54 per month tax exempt income. The annual amount of the non-taxable part of the tax base, if it is less than or equal to the amount of 24,952.06 euros (92.8 times the amount of the subsistence minimum) 5,646.48 euros (21.0 times the amount of the subsistence minimum) or 470.54 euros per month.
Thus, the calculation becomes:
- Tax base (EUR 660.80) - Tax-exempt income (470.54) = Taxable income (EUR 190.26)
- EUR 190.26 x 19% (employee income tax) = EUR 36.15 income tax per month
- Tax base (EUR 660.80) - income tax (36.15) = EUR 624.65 monthly net salary
Note: The above calculation does not account for tax bonuses or discounts which could further reduce the tax liability.
How much does the employer contribute to insurance?
Obligatory employer contributions are on top of gross salary, and amount to 36.2% of the corresponding wage.
Contributions then amount to the following percentages and limits:
- 14% into Social Security Retirement
- 3% into Disability Insurance
- 1.4% into Sickness Insurance
- 0.50% into Unemployment Insurance
- 4.75% into Reserve Fund
- 0.25% into Guarantee Fund
- 0.8% into Accident Insurance
- 11% into Health Insurance
What is the child tax benefit in Slovakia?
What is the child tax benefit in Slovakia?
Provisions for a tax bonus are in force, namely 140 euros per month for a child under 18 years of age and 50 euros per month for children over 18 years of age, up to the age of 25, if they attend full-time studies at high school or university.
How to calculate tax benefits for dependent children
Percentage rules limit how much parents can receive per child according to the tax base of the parent. This is in addition to the maximum bonus limits per child. For example, a parent can claim up to 20% of their tax base if they have only one child. However, for subsequent children, the allowance increases at the following percentages.
- 20% of tax base for 1 child
- 27% for 2 children
- 34% for 3 children
- 41% for 4 children
- 48% for 5 children
- 55% for 6 or more
Example child tax bonus calculation:
Take again the example of an individual earning EUR 800 gross salary per month. Now, say this parent has 3 children. Two are under 18 years old, while the other is over 18 (but still a dependent). In this case, the child tax bonus calculation would be:
- EUR 800 (gross salary) - 107.20 (total contributions) = EUR 660.80 (tax base)
- Child tax bonus = EUR 140 x 2 (children under 18) + EUR 50 (child over 18) = EUR 330 (before applying statutory tax bonus limits)
- EUR 660.80 (tax base) x 34% (statutory limit for 3 children) = EUR 224.67 the parent is eligible to claim per month.
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