Significant changes to the income of millions of workers in both the public and private sectors, as well as for all pensioners, are on the way following the package of measures recently announced by the government. However, to properly assess the real benefit for citizens’ wallets, it is essential to distinguish between gross and net amounts. The gross amount is what is stated before the applicable tax and social security deductions. The net amount is what is ultimately paid to the beneficiary. Therefore, a raise or a benefit announced in gross terms does not automatically mean that the full amount will end up in the beneficiary’s bank account.
Read also: October 2026 pensions: When payments begin – The two key dates
Salary and pension increases – Examples of net amounts
In detail:
– Civil servants are set to receive a total across-the-board salary increase of €80 per month (gross) in two phases. The first increase will be implemented in April 2027 and the second from 1 January 2028. The raises will affect salary scales, with the entry-level grade set at €1,000 gross.
– In addition, a Christmas bonus of €500 gross is planned for December 2027. This amount will not be paid in full into the beneficiary’s bank account, as it is subject to tax and deductions. Specifically, the net amount of the €500 bonus may range from approximately €257 to €389, depending on age, taxable income, and number of children. The bonus will be permanent and will count toward regular and pensionable pay.
– For employees over 30 years of age, the net amount can reach up to €389, for those in the lowest income brackets and with more children. For taxable income up to €30,000, the net amount ranges from approximately €288 to €319, depending on family status. At a taxable income of €40,000, the net amount drops to approximately €257.
– For civil servants aged between 26 and 30, the net amount can also reach €389 in the lowest income brackets. For employees aged up to 25, it can reach €389, provided their annual taxable income does not exceed €20,000.
Practical examples
The total annual benefits cited for civil servants refer to additional net income resulting from the combination of salary increases, tax changes, and the Christmas bonus. Together with the rise in the minimum wage, civil servants stand to benefit on multiple fronts.
- For example, a 40-year-old civil servant with two children and a gross salary of €2,000 currently takes home €1,447 net. The additional annual benefit is estimated at €562 in 2027 and €964 in 2028.
- For a 29-year-old with no children, earning €1,500 gross and €1,123 net, the additional annual benefit is estimated at €609 in 2027 and €1,033 in 2028.
- Finally, for a 49-year-old with three children earning €2,500 gross — compared to a current net of €1,832 — the total additional annual benefit is estimated at €1,944 in 2027 and €2,411 in 2028.
Seniority allowance
In the private sector, completing three years of service leads to a 10% increase on gross pay for those earning the minimum wage. Based on the current minimum wage of €920 gross, the first three-year increment equals an additional €92 gross per month, bringing gross pay to €1,012. Furthermore, the final amount of the increment in 2027 will depend on the minimum wage in force at that time. If the base amount increases, the seniority allowance will rise accordingly. For those who complete three such three-year periods, the total increment can reach 30% of gross pay.
November benefit
The situation is different for the annual support payment for pensioners. The amount is being raised to €400 and will be paid in full as a net sum, since it is tax-free and not subject to any deductions. The payment is made every November, with the first payment scheduled for 30 November 2026. With the abolition of income and asset eligibility criteria, the number of beneficiaries is set to increase significantly, and the €400 will be paid to every eligible recipient who meets the required conditions. This means a retired couple, both of whom qualify, could together receive €800 net — €400 for each spouse.
Personal difference to be phased out
From 1 January 2027, approximately 671,586 older pensioners who still have a remaining personal difference supplement will receive the annual pension increase in full. With an estimated increase of around 2.6%, the additional amount is indicatively calculated at between €25 and €50 per month, depending on the level of the pension. These amounts relate to the pension increase itself and not to a separate benefit. The personal difference supplement will continue to be paid as a separate amount, but will no longer increase going forward.
Originally published in Apogeumatini
