Anyone who earns €820 today has a net annual income of €11,078.06. However in 2024, they will earn €11,480, representing an increase of €402.
According to a report from ECO, not only those who earn the national minimum wage will benefit from the proposed increase in the minimum wage in the 2024 State Budget. EY simulations for ECO show that anyone earning above the minimum wage but below €1,000 can expect an annual net salary increase of around €400.
When a taxpayer's income, after taxes, falls below a certain threshold, the State exempts them from income tax (IRS), ensuring a minimum income level for each taxpayer after tax deductions. This is referred to as the minimum existence threshold.
Traditionally, this threshold was tied to the national minimum wage. However, a year ago, in the 2024 State Budget proposal, the government decided to revise this model.
According to EY simulations, if those who earn 820 euros today have, for the year as a whole, a net income of 11,078.06 euros, in 2024 they will have a net income of 11,480.00 euros, as they will no longer pay IRS.
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