Taxes and payrolls: the labour market in Slovakia
Each labor market has some peculiarities. It may be tricky for foreigners to understand fully the payment methods, taxes, and other related benefits. TalentUp is starting a series of different blog articles, one for each country. This article analyzes the labor market in Slovakia.
General data about the labour market in Slovakia
| Minimum wage | 700€ |
| Payment basis | Monthly |
| Maximum working hours a week | 40h |
| Working hours compensation | – 125% of the employee’s average salary rate. – 140% rate for hours performed at night. – 150% rate for hours performed on a Saturday. – 200% rate for hours performed on a Sunday. |
Payroll taxes in Slovakia
Social Security contributions are made by the employer and the employee and are used for funding unemployment, pension, maternity/paternity leave, and sickness or injury.
| Contingencies | Employer % | Employee % |
| Sickness Insurance | 1.4% | 1.4% |
| Old Age Pension | 14% | 4% |
| Disability Insurance | 3% | 3% |
| Unemployment Insurance | 1% | 1% |
| Guarantee Insurance | 0.25% | |
| Accident Insurance | 0,8% | |
| Solidarity Reserve Fund | 4.75% | |
| Health Insurance | 10% | 4% |
| Total | 35.2% | 13.4% |
All contingencies have a maximum base of 7,931€ except for accident insurance and health insurance. Starting from January 1st, 2022 the maximum annual assessment base is EUR 67,980. Dividends paid out from profits generated from January 1st, 2017 are not subject to health insurance at all.
Once contributions are paid, employees need to pay an income tax that varies depending on their gross salaries:
- 19% up to 41,445.46€
- 25% for 41,445.46€ and above.
Contingencies from self-employees
Self-employed individuals considered micro-taxpayers with annual taxable income not exceeding EUR 49,790 are taxed at 15%. A self-employed individual also must make earnings-related insurance contributions.
Example of net salary in Slovakia
As a reference, we use the average salary of a software engineer. In Slovakia, on average, software engineers earn annually 30,000€.
| Employer | Employee | |||
| % | € | % | € | |
| Gross salary (annually) | 30,000 | |||
| Sickness Insurance | 1.4% | 420 | 1.4% | 420 |
| Old Age Pension | 14% | 4,200 | 4% | 1,200 |
| Disability Insurance | 3% | 900 | 3% | 900 |
| Unemployment Insurance | 1% | 300 | 1% | 300 |
| Guarantee Insurance | 0.25% | 75 | ||
| Accident Insurance | 0,8% | 240 | ||
| Solidarity Reserve Fund | 4.75% | 1,425 | ||
| Health Insurance | 10% | 3,000 | 4% | 1,200 |
| Total | 35.2% | 10,560 | 13.4% | 4,020 |
| Income tax | 19% | 4,936.2 | ||
| Net salary (annually) | 21,043.8 |
The employer contributes 10,560€ to social security and the employee 4,020€.
After paying the income tax, the employee has a net salary of 21,043.8€ coming from a gross salary of 30,000€.
Unemployment regulation in Slovakia
The notice period is dependent on the employee’s time of service as follows:
| Time worked | Notice period |
| Less than 1 year | 1 month |
| Between 1 and 5 years | 2 months |
| More than 3 years | 3 months |
An employee’s length of service and the reason and type of termination determine the severance pay rate. If an employee is terminated with notice, a minimum of four times the employee’s average monthly earnings is to be paid.
Probation periods are limited to three months for operational roles or six months for managerial positions.
Different kinds of leaves in Slovakia
Annual leave is:
- By default 4 weeks
- 5 weeks for employees older than 33
- 8 weeks for employees who work in dangerous, complex or demanding jobs (such as teachers)
- 8 weeks for parents
- Employees who haven’t completed a year of service but have worked 60 consecutive days are entitled to annual leave accrued at the rate of 1/12 for every 21 days worked.
An employee may carry over unused annual leave entitlement to the next vacation year, but no further than that.
There are 15 public holidays.
In terms of sick leave, employees are entitled to ten days of paid time off for illness. During the first three days of sickness, the employee is compensated at a rate of 25.00% of their standard pay rate. From the fourth to the tenth day of sickness, the compensation increases to 55.00% of their regular salary.
If an employee’s sickness extends beyond the initial ten-day period, they may receive compensation through a social security benefit. This benefit amounts to 55.00% of the employee’s regular daily rate.
It’s important to note that to qualify for sick leave pay, employees are required to provide a medical certificate.
In Slovakia, in civic duty leave, an employer must provide unpaid leave to enable an employee to fulfil their civic duties.
An employee is also granted paid military service leave compensated by the military authority directly.
Paid parental leave
Maternity leave lasts for 34 weeks, 37 if it is a single mother and 43 for multiple births. The minimum leave is 14 weeks. It usually starts between six and eight weeks before the expected delivery date.
The maternity leave pay is 75% of the average pay rate, paid by Social Security.
Paternity leave is 28 weeks, 31 if it is a single father.
Parental leave can be requested until the child is 3 or 6 if the child has a long-term health condition. It is paid by the Central Office of Labor Social Affairs and the family.
Other common Slovakian benefits
| Benefit | % of companies with this benefit |
| Flat hierarchy | 11 |
| Casual dress code | 10.9 |
| Professional development | 10.5 |
| Free snacks | 10.3 |
| Free parking | 9.3 |
How to employ a Slovakian worker
There are three primary work authorization categories that apply in this context:
- Firstly, the EU Intra-Company Transferee Permit is designed for managers, specialists, and graduate trainees from outside the European Union who are being transferred to the same company.
- Secondly, the Single Permit for Local Hires is intended for hiring experienced foreign workers when no local staff is available.
- Lastly, the EU Blue Card is a work permit option for highly skilled and highly paid workers who are being locally hired. It’s worth noting that EU/European Economic Area (EEA)/Swiss nationals are exempt from needing work or residence permits, but they must still report their stay and register their residence if their visit exceeds three months.
Some platforms (Papaya Global among them) offer the Employer of Record (EoR) service helping companies hire countries where they do not have any office.
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