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Must December’s salary, which is paid out in January, be calculated in accordance with the new or old minimum rate?

04.01.2018


I am calculating December’s salary to an employee, whose employment contract states that they are paid the minimum salary. The salary is to be paid out on January 8th. In January, the minimum salary rate increases. Must the December’s salary be paid out in accordance with the new or old minimum rate?

Helena Ilves, the Counselling Lawyer of the Employment Relations’ Advisory Service to the Labour Inspectorate, clarifies: According to the Employment Contracts Act, salary received for work may not be smaller than the minimum salary rate enforced by the Government of the Republic. Even though the employment contract parties are free to agree on the suitable salary amount and its’ calculation basis, then the salary formation may not mean that the employee is paid less than the amount enforced as the minimum salary rate.

Starting from January 1st, 2018, the minimum salary rate for full-time work is 500 euros per month; and the minimum hourly rate is 2.97 euros.

As the December’s salary has been earned out prior to January 1st, 2018, the December’s salary is calculated based on the previously effective minimum rate (monthly salary 470 euros, hourly rate 2.78 euros). However, when making the salary payments, the new tax rates must be adhered to, which took effect this year. Pay attention to the basic exemption calculation! For more information about the basic exemption and tax rates effective from 2018, visit the website of the Tax and Customs Board.

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Must December’s salary, which is paid out in January, be calculated in accordance with the new or old minimum rate?

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