Health insurance is administered on the basis of solidarity: health care services do not depend on the amount of social tax paid for a specific person. The Health Insurance Fund pays health care institutions for the cost of health care services for insured persons.
Employers pay social insurance tax amounting to 33% of the employee’s gross earnings (20% is used to fund pension insurance and 13%, health insurance).
Social tax in 2018 in a nutshell:
- tax rate: 33% of gross earnings;
- a monthly rate of 470 euros is the basis for payment of social tax;
- the minimum monthly social tax is 155,10 euros (monthly rate 33% of the gross wages).
Income tax is deducted from the employee’s gross wages each month. To take into account tax-free income, the employee must submit a written request to the employer. Tax-free income for a given month can be taken into consideration only in the case of one payer of earnings.
- the income tax rate is 20%
- annual basic exemption (non-taxable amount) per year is up to 500 EUR in a month and up to 6000 EUR in the year, but decreasing depending on the total income amount. If total amount of all income is 25 200 EUR in a year or more, there is no right to basic excemption at all.
Unemployment insurance is a compulsory form of insurance that provides the employee compensation in the event of unemployment, collective layoffs and insolvency of employer.
- the employee’s unemployment insurance rate is 1.6%
- the employer’s unemployment insurance rate is 0.8%.
Minimum wages in 2018
- Minimum hourly wage 2.97 euros
- Minimum monthly wage 500 euros.