Increases in net earnings, ranging from €7.14 to €378, will be seen at the end of the month by hundreds of thousands of private sector employees with January’s payroll.
Read: The allowance that is larger than the basic salary – Who are the beneficiaries
Salary increase from January: Who gains up to €378 per month
The increases result from reduced income tax withholding with the new tax scale, lower rates and additional reductions for families with children, which boost the disposable income of employees and are expected to be reflected in payroll statements issued by company accounting departments.
Employees with annual income above €10,000 will see more money in their bank accounts, with the biggest beneficiaries being taxpayers with children and young people up to 30 years old. The higher the income, the greater the relief will be, while the benefit increases even more for those with dependent children.
It is characteristic that for a private sector employee with four children and income of €30,000, the tax reduction and consequently the increase in their earnings amounts to €4,100 annually or €292 monthly. Conversely, the benefit is minimal or even zero for taxpayers with low incomes without children. For example, a private employee without children earning €980 per month will have a benefit of €100 per year or just €7.14 per month.
The benefit
The benefit comes from the reduction of tax rates by 2% for incomes from €10,000 to €40,000, which are set at 20% from 22% for income from €10,000 to €20,000, at 26% from 28% for income €20,001-30,000, at 36% from 34% for income €30,001-40,000, while establishing a new rate of 39% for incomes €40,001-60,000.
For example, an employee with income of €20,000 who was taxed at 22% will now pay 20% tax. This automatically saves €200 per year or about €14 per month for earnings from January 1, 2026 onwards.
How much salaries increase for employees without children
For employees without children, the increases are lower.
- A private employee without children earning €980 per month will have a benefit of €100 per year or just €7.14 per month.
- A private employee with €20,000 annual income will gain about €200 per year, i.e., just over €14 per month (or about €16.5 for a public employee with the same income)
- For €40,000 annual income, the benefit reaches €600 per year (about €50 per month).
- For €50,000, the relief reaches €1,100 annually, i.e., €92 per month.
Increases for young people up to 30 years old
The benefits for young people up to 30 years old are significant:
- A young person up to 25 years old with income of €15,000, meaning €980 net per month, will have a benefit of €1,283 per year and their monthly net earnings will increase by €91, so the €980 will become €1,071 per month, net.
- A young person with €20,000 taxable income, i.e., €1,251 net per month, will have a tax reduction of €2,483 per year, an amount equivalent to an increase of €177 per month, and thus their net earnings will increase from €1,250 to €1,427.
- A young person with €25,000 taxable income, i.e., €1,500 net per month, will have an increase of €229, and consequently the €1,500 net will become €1,729.
- For young people 26 to 30 years old with €15,000 taxable income, the annual benefit will be €650, i.e., €46.4 increase in their net monthly earnings. For €20,000 taxable income, i.e., €1,250 net per month, the annual benefit amounts to €1,300, i.e., €93 per month, and thus the €1,250 will become €1,343.
- Young people aged 30 without children with €25,000 taxable income, i.e., €1,500 net, will have an annual increase of €1,400, i.e., divided by 14 salaries, €100 per month, and thus their net earnings will increase from €1,500 to €1,600 from January 1, 2026.
Families with children: the big winners
The increase in net earnings is even greater in households with children, due to both lower rates and higher tax-free thresholds. The new tax-free limits are:
- €10,000 with 1 child
- €11,375 with 2 children (from €11,000)
- €14,364 with 3 children (from €12,000)
- €27,100 with 4 children (from €13,000)
Specifically:
- For a private sector employee with four children and income of €30,000, the tax reduction, and consequently the increase in their earnings, amounts to €4,100 annually or €292 monthly, while for income of €40,000 it rises to €4,300 annually or €307, and for income of €50,000 the benefit reaches €4,800 or €342 monthly.
- A parent with many children with monthly net salary of €1,800 will have a tax reduction of €4,100, equivalent to almost 2.3 salaries.
- For taxable income of €25,000, meaning €1,500 net, an employee with three children will have an annual tax reduction of €1,700, meaning €129 per month, and thus the €1,500 salary will become €1,629 on January 1. With four children, the annual benefit amounts to €3,180, i.e., €227 per month, and thus the €1,500 will become €1,727 per month from January 1, due to the income tax reduction.
- For taxable income of €30,000, i.e., about €1,700 net salary, the tax reduction with two children amounts to €1,200. Therefore, the €1,750 becomes €1,836 if receiving 14 salaries and having two children, €2,100 if having three children, i.e., €150 per month, and €4,100 with four children, i.e., €292 per month if receiving 14 salaries.
- A parent with many children with taxable income above €60,000 will have a tax reduction of €5,300 per year, which means their monthly net earnings will increase by €378.
