2020 will deliver new figures and new benefits for employees, natural persons and self-employed persons.
Subsistence minimum
The subsistence minimum is increasing from EUR 205.07 in 2019 to EUR 210.20 in 2020.
Minimum wage
The government has approved an increase of EUR 60 in the minimum wage from EUR 520 to EUR 580. Together with the minimum wage, the minimum hourly wage has increased from EUR 2.989 to EUR 3.333 per hour.
Child tax bonus
Due to the change in the subsistence minimum, the monthly child tax bonus is set to rise from EUR 22.17 to EUR 22.72 per month per child over the age of 6. For children 6 and under, an increased child tax bonus in the amount of EUR 45.44 per month per child is provided throughout 2020.
The annual child tax bonus for a child 6 and under provides a EUR 545.28 reduction in tax obligations. The amount is EUR 272.64 for a child over the age 6.
Standard deduction
The amendment to the income tax act also modifies the calculation of the standard deduction. The standard deduction in 2020 is increasing as a result of the increase in the subsistence minimum and an increase in the calculation coefficient from EUR 328.12 per month to EUR 367.85 per month, an annual increase from EUR 3.937.35 to EUR 4,414.20. The annual increase in the standard deduction when applied in full provides a EUR 90.60 reduction in an individual taxpayer’s tax obligation.
Tax rates
15% – the amendment to the income tax act reduces the tax rate for natural persons reporting income under §6 (1) and (2) of the income tax of less than EUR 100,000 during the tax year in 2020.
19% – annual income of EUR 37,163.36 or less is subject to the 19% tax rate, which is a EUR 906.98 increase in this threshold over the previous year.
25% – any income over the amount of EUR 37,163.36 is subject to this higher tax rate in 2020.
Advance income tax payment obligations
The amendment to the income tax act raises the lower threshold for advance income tax payment obligations. The lower threshold is EUR 5,000 in 2020, compared to EUR 2,500 in 2019.
Statutory social insurance and health insurance deductions for trade license holders in 2020:
Minimum assessment basis
The assessment basis for health and social insurance has increased by EUR 29.50 from EUR 477.00 to EUR 506.50.
Maximum assessment basis
Social insurance – an increase from EUR 6,678 to EUR 7,091.
The maximum assessment basis for health insurance remains the same in 2020.
Contributions towards a child’s sports activities
A new contribution is being rolled out in 2020 for a child’s sports activities. An employee whose child is engaged in sports activities will be able to request that their employer cover 55% of eligible costs for such child’s sports activities, up to a maximum of EUR 275.
Eligibility conditions for the contribution
Employee:
- must be employed continuously for a minimum of 24 months,
- must file the request with their employer.
Employee’s child:
- must be under the age of 18,
- must have permanent residence in Slovakia (or residency status similar to permanent residence),
- must be a member of a sports organisation for a minimum of 6 months prior to the filing of the request for the contribution.
The sports organisation must be registered in the register of legal entities.
Self-employed persons may also use the contribution towards a child’s sports activities if they have performed such activities for a minimum of 24 continuous months.
Rental housing contribution
An employer may provide an employee with a rental housing contribution. The income tax act has permitted up to EUR 60 per month of such non-financial remuneration to be tax exempt if specific conditions are met. Beginning in 2020, the amendment of the income tax act increases this amount by EUR 40 per month. Therefore, a total of EUR 100 per month per employee may be completely exempt under specific conditions.
