From 58 to 387 euros, the increase that employees in the private sector, public sector employees (private law relationship) and pensioners will see in their net pay will range from 58 to 387 euros due to the reduction of health insurance contributions by one percentage point from 1/1/2025.

For low-wage earners, the gain is small but will grow the higher the wage.

Thus, according to the circular issued by the EFKA the new (6.10%) rate on all types of earnings is distributed as follows: 5.45% for benefits in kind, of which 1.65% is borne by the insured and 3.80% by the employer. 0.65% for cash benefits, of which 0.40% is borne by the insured and 0.25% by the employer.

In aggregate, the insured’s contribution for the health care industry will be 2.05%, while the corresponding employer contributions amount to 4.05%.

With regard to construction projects, the corresponding contributions will decrease to 8.362%, from 1.1.2025 onwards. This percentage is divided into 6.4% for in-kind sickness contributions, of which 1.65% will be borne by the employee and the remaining 4.75%, by the employer. Also set at 1.962% are cash sickness contributions. Of these, 0.4% will be the employee’s contribution and 1.562% will be the employer’s contribution. Thus, in aggregate, the employee (insured) in construction projects will pay 2.05% as a contribution each month for the health care industry, while 6.312% will be the employer’s contribution.

The contribution reduction is the most costly measure in the TIF package ( costing 440 million euros) of which an amount will be returned to the state which will benefit as an employer from the reduction in public sector contributions.

According to the current minimum wage in the private sector (830 euros gross earnings, without previous experience), an employee receives each month, net, 709 euros. From 1 January, due to the reduction in social security contributions, he will see a slight increase in his earnings (3.24 euros), which will, at least, exceed 712 euros, net. The annual benefit is EUR 45.36. Similarly, employers, for each employee paid the minimum wage, have a monthly gain of 4.15 euros, or an annual gain of 58.1 euros.

For a salary of 1,000 euros (gross) the net, from 1 January 2025 onwards, will be 823.89 euros, with a monthly increase of 3.8 euros (annual 53.2 euros) for employees and 5 euros for the employer (annual 70 euros).

Of course, the benefits for employers will be greater, depending on the size of the business. After all, this is the main objective of the reduction, to relieve companies of non-wage costs so that they can move to wage increases to facilitate the achievement of the government’s announcement that the average wage will reach 1500 euros in 2027.

For example, a company employing 30 workers with a gross salary of 1,670 euros is relieved of 3,507 euros in their annual contributions. If it has 30 employees with salaries at 4,090 euros, the gain from the half-point reduction for the employer is 8,589 euros per year.

Note that an additional half-unit reduction is already planned until 2027. Thus, then, the total retreat in insurance contributions will amount to 5.9 points.