Home » Business » How the Abolishment of the Super-Gross Wage Affects Your Salary and Finances in 2024

How the Abolishment of the Super-Gross Wage Affects Your Salary and Finances in 2024

When the so-called super-gross wage was abolished, it meant a huge positive for practically all employees. All of a sudden, more money started coming into their account, with the same gross salary. Understandably, the highest earners improved the most, but it affected everyone in some way. According to economists, this was, among other things, one of the reasons why inflation shot up in such a way last year. People simply got more money without anything else changing in the economy, which caused prices to rise quickly, so you didn’t buy more goods and services with a higher net wage anyway, quite the opposite.

The salary will be reduced automatically

It is therefore clearly seen that such interventions are short-sighted and may end up doing more harm than good. In addition, they are no longer refundable, because now you can no longer explain to people that they should save themselves a few thousand crowns again. Inflation will no longer shift backwards. What is certain, however, is that it caused such a hole in the state budget that we have not yet recovered from.

But at the beginning of next year, you will get a taste of what it might look like if the super-gross wage returns, or if there is a higher tax on labour. In this case, it is not a tax as such, but the introduction of payment for health insurance for employees. This will be 0.6% of the gross salary, which will simply cause you to lose this amount in your net salary.

Let’s take a model example. Today, if someone has CZK 50,000 a month, which is essentially an average salary, and is not entitled to any other benefits, they receive CZK 39,570 in their account today. From January 1, 2024, however, his net salary will decrease by CZK 300 to CZK 39,270. This is nothing major, but it is an example of the fact that salaries can also be reduced in net terms very easily. At the same time, it is far from excluded that the state will actually have to reach for higher taxation of work, or an increase in pension insurance, as this system is in big trouble. In the following years, these declines could then be even more drastic.

Foto: Shutterstock

You will lose a lot of money

At the same time, it is far from everything. If you’ve been entitled to various tax credits up until now, it’s quite possible that you’ll lose them from next year, and you’ll take in even less on the net. Among the most significant changes is the restriction of the wife’s discount only in cases where she takes care of a child under the age of three. At the same time, the student discount, which amounts to CZK 335 per month, is cancelled. And to make matters worse, families with small children will lose the opportunity to deduct kindergarten fees of CZK 16,200 per year.

Read also: Czechs will cancel a big financial advantage. Every household suddenly loses 18 thousand crowns. It can’t go on like this

In the next year, many will actually find that they are in a significantly worse situation financially, especially if they fail to negotiate a wage increase with their employer. However, this will be significantly more complicated than this year and last year, because next year inflation should drop significantly, and the most common argument will therefore be passé.

Foto: Shutterstock

2023-11-11 15:00:00
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