Prime Minister Kyriakos Mitsotakis announced an increase in the tax-free threshold for tips received through electronic payments.

Under the new regulation, the tax-free limit will rise from €300 to €500 per month for those employed throughout the year, corresponding to €6,000 annually. For seasonal workers, the calculation will now be made on an annual rather than monthly basis. As a result, those who work, for example, six months a year will see their tax-free threshold rise to €1,000 per month, an amount more than three times higher than under the current system.

The regulation is expected to be passed immediately, but it will apply retroactively from January 1, 2026, thereby covering the entire current summer season.

Press Release Announcement

The government is increasing the tax-free threshold for tips voluntarily given by customers to salaried employees, from €300 per month to €6,000 per year starting from the 2026 tax year.

The most significant change is that the tax-free allowance will now be calculated on an annual rather than monthly basis, making it better suited to the particular circumstances of seasonal employment, especially in hospitality, tourism, and the wider service sector.

Why the Change Is Important

• It reflects the seasonal nature of employment. A worker employed for a six-month season can receive tax-free tips of up to €1,000 per month instead of €300, without losing the tax benefit because their income is concentrated within a limited number of months. Similarly, a worker employed throughout the year, such as a delivery worker, can benefit from an average tax-free allowance of around €500 per month.
• It is fairer from a tax perspective. Income tax is calculated on an annual basis. The tax-free allowance for tips will now follow the same principle, ensuring equal treatment for all workers regardless of the length of their employment period.
• It maintains safeguards against wage substitution. The annual limit of €6,000 effectively corresponds to approximately €500 per month on average, keeping the allowance within reasonable levels. At the same time, many workers in hospitality and tourism change employers within the same year, making an annual framework more realistic and practical.

What Applied Until Now

It is recalled that the government introduced a tax exemption for tips for the first time, as until 2024 all tips paid electronically through point-of-sale (POS) systems were fully subject to taxation.

Under Law 5162/2024, effective from November 1, 2024:

• An exemption from income tax was introduced for tips of up to €300 per month received voluntarily by salaried employees from customers; and
• An exemption from social security contributions was introduced for tips regardless of the amount.

The new regulation will be submitted for a vote in September and will apply retroactively for the entire 2026 tax year.