INCREASE OF SOCIAL SECURITY COSTS
a) The Maximum Pensionable Salary is Increased
The maximum social security contribution base (which is the amount of the salary on which the Social Security contribution rates for employers are applied) gets to € 4,495.50 (x 12 months), which is equivalent to an increase of 7.92% with respect to that of 2022 (€ 4,139.40/month). Thus, companies and employees will stop paying social security tax when salaries reach the limit of € 53,946 per year. Their social security costs get to just such maximum threshold.
b) Approval of a New Social Security Tax
New Law has set a new tax as from 1st of Jan 2023, and over a period of ten years, payable both by employees and employers to increase the Social Security Reserve Fund for retirement pensions. This new tax of 0.6% is distributed as follows 0.5% by the employer and 0.1% by the employee. Thus, employers must adjust their cost estimation when hiring a new employee.
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