‘Brave’ rise in minimum wage
Benchmark salary set at 830 euros gross as of April 1, increased for a fourth time since 2019
The new minimum salary to be introduced from next Monday, April 1, will amount to 830 euros gross, increased by 6.4%, the government announced on Friday. It will concern at least 560,000 workers already employed in the private sector.
This is the fourth consecutive increase of €50 gross – or €40 net – which the competent Minister of Labor, Domna Michailidou, described as “brave,” as it leads to net (after taxes and contributions) earnings amounting to €706.
In fact, cumulatively, from 2019 to 2024, the increase is of the order of 27% and leads to three extra monthly salaries added to the income of the employees.
At the same time, of course, the burden on businesses also increases, as does the state’s revenue from the collection of more contributions and taxes.
In detail, for an employee who currently receives the minimum wage of €780 gross, €108.19 corresponds to employee contributions and €4.96 to payroll tax, which means that the employee receives €667 net. Of course, the employer is burdened with a total of €953.86, as they also pay the employer contributions that amount to €173.86.
Now as of Monday, the new minimum salary increases by 6.4% and stands at €830, with the employee receiving €706 in hand and the total cost for the employer amounting to €1,015.01. In practice, that is, the employee will receive an additional €39.11 per month, for 14 months of the year (as the holiday and leave bonuses are also included), while the state will collect an additional €22.04 from contributions and tax.
This significant burden on businesses has caused reactions mainly from the representatives of small and medium-sized enterprises, who are urgently requesting a reduction in social security contributions. It should be noted that there is a government pledge for a contribution reduction, but not before 2025.
The increase announced, however, is estimated to lead to an upward readjustment of the incomes of the rest of the employees, too, as was also done in previous years.
