Wednesday, June 29, 2022

Czechs earn higher wages than Poles, Hungarians and Slovaks

The average wage in Czechia rose by 7.2 percent year over year to €1,534 in the first quarter of 2022

The annual study by the consulting company Mazars compares the tax systems of 22 countries in Central and Eastern Europe.


editor: REMIX NEWS
author: CZECH NEWS AGENCY
via: IDNES.CZ

 (Pixabay)

The average monthly wage in Czechia is the highest among the Visegrád Group countries and has enjoyed year-over-year growth of 12 percent, according to the annual study by Mazars.

The consulting company compares the tax systems of 22 countries across Central and Eastern Europe to ascertain the current level and annual growth of wages on the continent.

The average wage in Czechia is €1,533, topping Hungary at €1,369, Poland at €1,301 and Slovakia at €1,185, respectively.

Germany has retained the highest average wage in Central and Eastern Europe at €4,130, with Austria following closely behind at €3,818.

By contrast, the lowest average wage is €400 in Kosovo, €450 in Bosnia-Herzegovina, and €485 in Ukraine.

According to data from the Czech Statistical Office, the average wage in the Czech Republic rose 7.2 percent year over year to 37,929 korunas (€1,534) in the first quarter of this year but fell by 3.6 percent in real terms after inflation.

The differences in the growth of the average wage in euros were more significant in the region than before. Germany, where average wages rose by 14 percent based on last year’s study, grew by only 4 percent. On the contrary, the wage level in Austria grew faster, by 23 percent. In Hungary, growth also accelerated to 19 percent. Slovakia grew by 6 percent, and Poland fell by 2 percent.

The study also states that taxes and mandatory employer contributions related to people’s employment have decreased further in 22 European countries this year. The ratio of employer’s costs to gross wages for taxes and compulsory levies is approximately 15 percent. However, there are significant differences between countries. While in Romania and Kosovo, the levies are less than 5 percent of gross wages, these are 20.48 percent in Poland, 24.8 percent for annual incomes up to 76,330 euros in the Czech Republic, and 35.2 percent in Slovakia.

The study also shows that Hungary and Croatia have the highest VAT rates at 27 and 25 percent, respectively. The average in the region is between 19 and 21 percent. The Czech rate is 21 percent, while in Germany, it is 19 percent.

Regarding corporate income taxes, Germany has the highest taxation — its maximum amount is 31 percent. By contrast, some companies in Kosovo and Lithuania pay the lowest taxes, at 3 percent and 5 percent, respectively. Hungary, Montenegro, and Poland have a 9 percent tax rate. The current corporate income tax rate in the included countries remains between 15 and 20 percent. In the Czech Republic, it is 19 percent.

In the case of personal income taxation, nine states have one tax band, for example, Hungary’s 15 percent. More than half of the countries in the region have progressive taxation or more tax bands. In Austria, personal income tax is up to 55 percent, but at the same time, as in Kosovo or Albania, it starts at zero. Slovakia has three tax bands of 15, 19, and 25 percent. Poland has bands of 17 and 32 percent, while the Czech Republic has 15 and 23 percent tax bands.

The publication, which includes Germany, Austria, Russia, Ukraine, and southern European and Baltic states in addition to the V4 countries, monitors mainly labor costs, indirect taxes, and various aspects of corporate taxation and transfer pricing.

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