The tax burdens on gross wages can be divided into two main groups:
- taxes and contributions payable by the employee and
- taxes and contributions payable by the employer.
Taxes and contributions on wages of employees may be the following (in 2019):
- 15 percent personal income tax (PIT),
- 10 percent pension contribution,
- 8.5 percent health insurance and labour market contribution
Employer have to pay the following taxes and contributions on gross wages (in 2019):
- 17.5 percent social contribution tax,
- 1.5 percent vocational training contribution.
Subject to the fulfilment of various conditions defined in legal regulations, the taxes and contributions payable may be reduced by tax, tax base and contribution allowances. In certain cases, tax or contribution exemption applies. For example, no financial form health insurance and labour market contribution payment obligation arises in the case of employees in pension on their own right.