Only a minimum of companies used the opportunity to reward their employees with a 13th holiday salary, to be part of their June salary this year. The audit and tax consultant Grant Thornton Slovakia came to the conclusion based on its analysis.
“Of all our clients operating in both the manufacturing and non-manufacturing sectors, less than 5 percent were able to take advantage of this opportunity,” said the tax partner of Grant Thornton, Silvia Hallová. “I estimate that less than 3 percent of companies in Slovakia provided holiday pay as the 13th salary under the new system.”
The bad setting of conditions is the main reason why the idea of 13th and 14th salaries do not work. These are benefits employees receive before the summer and Christmas holidays. Holiday and Christmas bonuses are exempt from the payment of health insurance levies only for now. This means that an employer may save only up to €16.20 when paying a €500 holiday salary.
Holiday and Christmas bonuses will be exempt from income tax only as of 2019 and from social insurance levels as of 2021.
“The introduction of the so-called entitlement to the 13th and 14th salary, therefore, proved to be a purely propagandistic step,” said Hallová.
Wilfried Serles, managing partner at Grant Thornton Slovakia, points out that the burden of taxes and social insurance contributions in Slovakia is higher than in Austria, i.e. a country considered to be one with high taxes.
“If the government really wants to increase the income of people, it has to reduce the burden of taxes and social insurance contributions,” said Serles, managing partner at Grant Thornton Slovakia. “Any other measure is only a show without a final effect.”
23. Aug 2018 at 13:08 | Compiled by Spectator staff