From 2020 to the end of 2023, gross income increased by 11% and the income tax on it increased by 41%.
The much-vaunted abolition of the so-called “solidarity contribution” and the reduction of social security contributions – both measures promised and implemented by the ruling conservative government, which presented real welfare for wage earners bled dry by the previous left-led SYRIZA government – were undone by the increase in income tax, and then some.
The promise of New Democracy to bring salaries closer to the EU average has not been fulfilled. Due to higher inflation in goods and some services, the differences have even widened.
According to the Organisation for Economic Co-operation and Development (OECD), gross annual income averaged 12,554 euros, after falling sharply over the decade due to the financial crisis. Income tax on this income averaged 946 euros, including the solidarity contribution. Social security contributions added another 2,443 euros.
The conservative government that came to power in 2019 quickly increased the minimum wage. This had last been done before the crisis, during which the minimum wage had been significantly cut. The increase – and many increases – helped to boost gross wages, which reached 17,685 euros at the end of 2023, an increase of 10.93 percent compared to 2020.
However, despite the abolition of the solidarity contribution, the average income tax was 1,334 euros, 41.01 percent higher than in 2020. Social security contributions remained almost unchanged at 2,452 euros, an increase of 0.37 percent.
Due to some changes in tax law, the expected income increase of 3% will be exceeded by a 7.5% increase in income tax, and disposable income will grow 2.5 percentage points less than inflation.
Since the current government took power in 2019, it has not adjusted tax brackets to inflation. This would not have been a major problem in previous years when inflation was negative due to the crisis and then rose to very low levels.
