The Slovenia Times

Unions, employers urge govt to abolish levies on holiday bonus


This would allow companies to pay out higher holiday allowance and performance bonus in the time of economic growth, the president of the Chamber of Commerce and Industry (GZS) Boštjan Gorjup and the president of the ZSSS, Slovenia's biggest trade union confederation, Lidija Jerkič told the press.

Now is the time to enact such changes, because the next opportunity to do so will likely not come before 2020, ZSSS executive secretary Andreja Poje added.

The chamber and the confederation believe the holiday bonus should be excused from contribution payment if it does not exceed 100% of the average Slovenian pay, while income tax could be scrapped for performance bonus up to 100% of the average pay.

"The economy has created the conditions in which this is possible and it is only right that those who created them benefit from that," GZS director general Sonja Šmuc told a joint news conference with the ZSSS.

By abolishing the levies on these bonuses, an average worker would get EUR 200 more net with the holiday allowance and nearly EUR 187 more with the 13th salary. Employers would thus be encouraged to raise the bonuses, the GZS and ZSSS believe.

The ZSSS made a similar proposal in 2015, but it only managed to free the holiday allowance from contribution payments if the allowance does not exceed 70%. The changes have taken effect only this year and income tax is still paid.

The contributions are meanwhile paid from the 13th pay but no income tax is charged if the bonus is kept under 70% of the average pay.

Šmuc said their proposal entailed no additional costs for the state, because the two bonuses virtually did not exceed 70% of average pay at the moment, so no tax was collected from them.

By abolishing the tax, the government would encourage higher spending, boosting in turn the collection of VAT, the GZS and ZSSS representatives said.

According to GZS data, the average holiday allowance paid out reaches 60% of the average monthly pay, while 20% of employers give out the 13th pay.

Responding to the initiative, the Finance Ministry said that it would have to wait for an analysis of this year's tax collection before going forward with any of the proposed changes.


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