Average income

 

The employee receives a salary in return for his/her work. The amount of an employee’s salary must be stipulated in advance in the employment contract.

A net salary is a salary without contributions into compulsory insurance funds and income tax. The so-called “labour cost” however includes the contributions to social and health insurance fund an employer pays on behalf of an employee. (See also sections Social SecurityTaxationHealth insurance)

Example: the average nominal monthly wage in Slovakia in 2018 was 1004 €. After being reduced by contributions to compulsory insurance funds (social insurance, health insurance), the rest of the income is taxed at 19 % for private individuals (provided the tax base does not exceed 176.8 times the current amount of subsistence minimum). The monthly net wage then amounts to 681 € (not applying yet the annual non‑taxable amount).