Next year, the public administration will earn more than 10 million euros thanks to the minimum wage increase from 580 to 623 euros. Municipalities, which are financed from income taxes, will benefit. On the one hand, the state will collect 10 million euros less in corporate tax, as the personnel costs of businesses will increase. On the other hand, the social insurance company Socialna Poistovna and health insurance companies will collect an additional sum of 24 million euros in social insurance contributions from higher wages.
"It is still true that the government earns most thanks to the lowest-income groups," comments Viliam Palenik, director of the Employment Institute. While five years ago, the minimum wage burden was below 30 percent, next year it will near 40 percent. The representatives of the current government criticized former Prime Minister Robert Fico in the past, when the state earned more than employees after the minimum wage increase. The government led by Igor Matovič set a goal to change this through the tax-social insurance contribution reform.
For the time being, priority has been given to reaching an agreement on so-called Kurzarbeit, a permanent mechanism that protects businesses from the swings caused by the corona crisis. Analysts at the Finance Ministry are working on a long-delayed reform that would combine taxes and social insurance contributions into one institution.
