Personal Income Tax – 20%

Employee income taxation

Employees’ personal earnings is also subject to income tax, and the employer must withhold and pay income tax on gross wages, ancillary payments, bonuses, vacation pay, and other benefits that are considered wages. The personal income tax rate is 20%.

Single tax-free income

A general income tax exemption of 6,000 EUR per year (500 EUR/month ) applies to all income.

If the employee has submitted an application to the payer (employer) regarding the sale of tax-free income, one can deduct the permitted amount of tax-free income per month when calculating the amount of withholding income tax.

In addition to income tax, the employer must withhold the mandatory funded pension and the unemployment insurance benefit from the employee’s income. Lastly, social tax must be paid on the employee’s accrued wages.

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