Around 2 million private-sector employees in Greece will see higher take-home pay from Friday, following a tax reform package announced by the government at the Thessaloniki International Fair in September.
The measures include significant tax relief for young workers up to the age of 25 and for families with children, with benefits amounting to the equivalent of one to two additional monthly salaries per year for families with three or more children.
The impact of the reform will be reflected for the first time in January payrolls, as tax withholdings are reduced following a horizontal cut of at least two percentage points in income tax rates for annual earnings between 10,000 and 40,000 euros. The government says the changes are aimed at raising average disposable income.
Under the new measures, workers aged up to 25 are fully exempt from income tax on earnings of up to 20,000 euros, effectively eliminating their tax burden, as most in this age group have limited work experience and relatively low wages.
For employees aged 26 to 30, the income tax rate on earnings up to 20,000 euros is reduced to 9%. In addition, parents over the age of 30 with one or two dependent children will receive a further two-percentage-point tax reduction per child.
The largest benefits are reserved for families with three or more children. Parents with three children will now be taxed at the lowest rate of 9% on income up to 20,000 euros, while families with four or more children will pay no income tax at all on earnings within that threshold.
The impact of the reform will be reflected for the first time in January payrolls, as tax withholdings are reduced following a horizontal cut of at least two percentage points in income tax rates for annual incomes between 10,000 and 40,000 euros. The government says the measures aim to raise average disposable income and support younger workers and families.
