Saturday , June 12 2021

Wage Growth From 2021: See How Much You Get



Hundreds of thousands of private sector employees will receive from January 2021 monthly salary increased from 1.45% to 10.43%.

The new, increased amounts of net salaries will result from the introduction of measures to reduce deductions for insurance contributions and the elimination of special deductions from solidarity contributions that have already been established by the government.

What is changing

In particular, from January 2021, two very important measures announced by the Prime Minister will enter into force. Kyriakos Mitsotakis last September from the “stage” of the TIF and which have already been included in the law of the Greek state:

1 A three percentage point cut in insurance premiums for private sector workers at a budget cost of € 816 million.

2 Suspension of the special solidarity levy on employees in the private sector with a gross monthly wage in 2021. Above EUR 1000 and small and medium-sized enterprises, self-employed persons, other self-employed persons, incomes and farmers with annual incomes above EUR 12,000 in 2020. This measure will have a budgetary cost of 767 million euro. When used in conjunction with a reduction in insurance premiums, it will increase, from January 2021, the monthly net wages of those private employees who earn more than EUR 1000 gross a month.

Changes

The amounts and percentages of the increases that private sector workers will receive from next year are reflected in the table with detailed examples provided by ET today. The table shows the changes in insurance premiums and deductions from the gross monthly wages and salaries of private sector employees that will be caused by the reduction in insurance premiums and the temporary abolition of the special solidarity contribution from 1 January 2021. maintaining them, it turns out that from 1-1-2021:

The monthly insurance premium deductions will be reduced by EUR 8 to EUR 78 for employees with a gross monthly salary from EUR 650 to EUR 6,500.

Monthly deductions from income tax will remain zero for employees with gross monthly earnings between EUR 650 and EUR 780 and will increase by EUR 0.80 to EUR 34.32 for employees with gross monthly earnings above EUR 780 to EUR 6,500. These small increases in income tax deductions will result from the fact that due to the reduction in insurance premiums from 1-1-2021, taxable monthly income, ie the income that remains after the deduction of insurance deductions, will increase. Thus, deductions from income tax will be applied from 1-1-2021 On increased monthly taxable income causing the increase.

The monthly deductions from the special solidarity contribution will remain zero for those workers with a gross salary of up to € 1,000 per month and will now be reset for those with a gross salary above € 1,000, due to the temporary abolition of this contribution for 2021 in the private sector. At this point, we should clarify that a special solidarity contribution is levied on the annual taxable income of salaries above EUR 12,000, which corresponds to monthly salaries above EUR 858 in the private sector. Monthly wages over EUR 858 in the private sector will correspond to the period 1-1-2021. Gross wages (gross) over EUR 1000, taking into account that from this level of gross earnings and above, monthly insurance premiums will be deducted from 141 euros. Therefore, the temporary abolition of the monthly special solidarity levy on private sector wages will only benefit employees who receive gross wages (wage amounts before insurance premiums, income tax and special solidarity contributions of EUR 1,000 per month or more). taxable amounts of earnings over 858 euros per month. Employees in such cases will benefit from the temporary waiver of monthly deductions from the special solidarity contribution, which will start from 1.07 euros per month for people with a gross salary of 1070 euros per month and up to 306.15 euros for people with a gross earnings of 6,500 euro per month.

Finally, private sector employees with gross monthly earnings between EUR 650 and EUR 6,500, which currently corresponds to net monthly earnings between EUR 550 and EUR 3,354.67 (after deduction of monthly insurance contributions, income tax and special solidarity contribution), will receive increases from their monthly net wages. ranging from 1.45% to 10.43% and from EUR 8 to 349.83. So, from January 2021, their monthly net earnings will be between 558 and 3,794.49 euros!

“Net Wage” means one that results from the withholding of insurance and the deduction of gross wage tax.


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