Hundreds of thousands of private sector workers will be received from January 2021 monthly salaries increased from 1.45% to 10.43%.
The new increased amounts of the net salary will result from the implementation of measures to reduce the deduction for insurance premiums and the abolition of the deduction for special solidarity contributions, which have already been set by the government.
What is changing
In particular, from January 2021, two very important measures announced by the Prime Minister will come into effect. Kyriakos Mitsotakis last September of the “step” of the TIF and already included in a law of the Greek state:
1 The three percentage point reduction in insurance premiums for private sector employees, with a budget cost of 816 million euros.
2 The suspension of the imposition of a special solidarity contribution on employees in the private sector with a gross monthly salary of 2021 above EUR 1,000 and on small and medium-sized enterprises, self-employed persons, other self-employed persons, incomes and farmers with an annual income of more than EUR 12,000. This measure has a budget of 767 million euros. Applied in conjunction with the reduction in insurance premiums, it will have the effect of increasing the net monthly salaries of those private employees who receive gross amounts in excess of 1,000 euros per month from January 2021.
The amounts and percentages of the increases that private sector workers will receive from next year are shown in a table of detailed examples presented today by “ET”. The table shows the changes in insurance and tax deductions on the gross (gross) monthly salaries of employees in the private sector that will be caused by the reductions in insurance premiums and the temporary abolition of the special solidarity contribution from January 1, 2021. From the examples in the table, pertaining to employees without dependent children, shows that from 1-1-2021:
– The monthly deductions for insurance premiums are reduced by 8 to 78 euros for employees with a gross monthly salary of 650 to 6,500 euros.
– The monthly income tax deduction remains zero for employees with a gross monthly salary of 650 to 780 euros and increases by 0.80 to 34.32 euros for employees with a gross monthly salary of more than 780 euros and up to 6,500 euros. These small increases in the income tax deductions will be due to the fact that, as a result of the reduction in insurance premiums as of 1-1-2021, the taxable monthly wages, that is, the income that remains after deductions, is increased. For example, the income tax deductions will be calculated from 1-1-2021 on increased taxable monthly income resulting in an increase.
– The monthly deduction of special solidarity contributions remains zero for employees with gross wages up to 1,000 euros per month and is now set to zero for those with gross wages of more than 1,000 euros, due to the temporary abolition of this wage contribution for 2021 in the private sector. At this point we should clarify that the special solidarity contribution is imposed on an annual taxable income of salaries of more than 12,000 euros, which corresponds to monthly taxable amounts of salaries of more than 858 euros in the private sector. Monthly taxable amounts of salaries of more than 858 euros in the private sector correspond from 1-1-2021 to gross (gross) amounts of salaries of more than 1,000 euros, since from this level of gross wages and above the monthly deductions of insurance premiums from 141 euro. Therefore, the temporary abolition of the monthly deductions from the special solidarity contribution on the salaries of the private sector only benefits those employees who receive gross wages (salary amounts before deduction of insurance contributions, income tax and special solidarity contribution of € 1,000 per month or more). taxable amounts of more than 858 euros per month. In these cases, the employees will benefit from the temporary abolition of the monthly deduction of the special solidarity contribution, which starts at 1.07 euros per month for those with a gross salary of 1070 euros per month and will increase to 306.15 euros gross for them. salary 6,500 euros per month.
– Finally, employees in the private sector with a gross monthly income of 650 to 6,500 euros, which currently corresponds to a net monthly wage of 550 to 3,354.67 euros (after deduction of the monthly deductions of insurance contributions, income tax and special solidarity contribution), received on their net monthly salary increases which will vary from 1.45% to 10.43% and from 8 to 349.83 euros. From January 2021, their net monthly income will now range from EUR 558 to EUR 3,794.49!
“Net pay” means that which results from the deduction of insurance and tax deductions from gross pay.