How to Calculate Employee Net Salary in Slovakia
See how to calculate net and annual salary after mandatory insurance contributions while under full-time employment in Slovakia.
Employee Net Salary, Insurance, and Taxes in Slovakia
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”). This tax base is the amount which personal income tax will apply to at either a 19% or 25% rate. 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.
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
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?
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.
In 2023, the employer must contribute 35.2% 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?
The two tax rates in 2023 in Slovakia are 19% and 25%. These rates are adjusted annually, and entail income thresholds which determine the tax rate individuals must pay.
In 2023, the tax rates are:
- 19% - For annual taxable income up to EUR 41,445.46 (not including income from business activities, capital income, and dividend income)
- 25% - For annual taxable income over EUR 41,445.46 (not including income from business activities, capital income, and dividend income)
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 2023 can also claim EUR 410.24 per month tax exempt income. Thus, the calculation becomes:
- Tax base (EUR 660.80) - Tax-exempt income (410.24) = Taxable income (EUR 250.56)
- EUR 250.26 x 19% (employee income tax) = EUR 47.61 income tax per month
- Tax base (EUR 660.80) - income tax (47.61) = EUR 613.19 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 35.2% of the corresponding wage. Contributions then amount to the following percentages and limits:
- 14% into Social Security Retirement - max limit of EUR 1,186.78
- 3% into Disability Insurance - max limit of EUR 254.31
- 1.4% into Sickness Insurance - max limit of EUR 118.67
- 1% into Unemployment Insurance - max limit of EUR 84.77
- 4.75% into Reserve Fund - max limit of EUR 402.66
- 0.25% into Guarantee Fund - max limit of EUR 21.19
- 0.8% into Accident Insurance - no maximum limit
- 10% into Health Insurance - no maximum limit
What is the child tax benefit in Slovakia?
The tax bonus for rearing dependent children in Slovakia entails maximum monthly limits based on age and number of children. Each child parents raise under 18 years of age entitles a maximum monthly bonus of EUR 140. For children over the age of 18, the maximum bonus is EUR 50 per child. However, the child / children must be enrolled in an education program, and have no additional source of income.
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
Free online tools for accurate, hassle-free accounting
If you found this post useful, don’t hesitate to explore our completely free online tools for expats in Slovakia. Pexpat’s solutions range from tax and employment calculators to document and invoice generators for all your expat needs. We’ve designed each tool to make assimilation hassle-free, and also have User Accounts for automated and exact record-keeping. Go ahead. Start making your life easier with Pexpats: solutions by expats, for expats.
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