The flat-rate mandatory health insurance contribution that was the main reason for the jump in Slovenia's tax wedge replaced voluntary top-up (not compulsory) health insurance payments. These were collected by commercial insurers, not just Vzajemna, which was one of the three providers. A corrected copy follows.Paris, 05 May (STA) - Slovenia's tax wedge for a single average earner rose to 44.6% last year, ranking it sixth highest among OECD nations and significantly above the organisation's average, following one of the largest increases recorded across member states.
The jump of 1.44 percentage points, which came second only to Italy's 1.61% and moved Slovenia one spot higher in the OECD ranking, is primarily attributed to the introduction of a flat-rate mandatory health insurance contribution for employees, which replaced what used to be voluntary top-up health insurance payments collected by commercial insurers.
This occurred against the backdrop of a third consecutive annual rise in the average tax burden on wages within the Organisation for Economic Co-operation and Development (OECD), reversing declines seen during the Covid-19 pandemic.
Slovenia's 44.6% wedge placed it just behind the top five: Belgium (52.6%), Germany (47.9%), France (47.2%), Italy (47.1%), and Austria (47.0%). The overall OECD average tax wedge for the single average earner demographic stood at 34.9%, having increased by 0.05 percentage points from the previous year.
Across the OECD, the wedge increased in 20 countries, decreased in 15, and remained stable in 3. The most significant decreases were noted in Finland, the UK, and Portugal.
The tax burden on families in Slovenia also saw marked increases, keeping the rates above OECD averages. For dual-income households with two children, Slovenia's tax wedge climbed by 1.96 percentage points to reach 37.8%. This increase substantially outpaced the slight average OECD rise for this family type, which brought the average to 29.5%.
Similarly, for single-income families with two children in Slovenia, the tax situation remained relatively high. While the OECD average tax wedge for this household type actually decreased slightly to 25.7%, Slovenia's rate stood at 32.2%.
It is important to note the methodology used for these comparisons. The OECD relies on average gross wage data derived from each country's national statistical office methodology. In Slovenia's case, the Statistics Office defines gross wage to include standard compensation, overtime, certain employer-paid benefits - like holiday and limited sick leave -, seniority pay, and performance bonuses.
However, this specific definition excludes certain prevalent components of Slovenian remuneration packages, such as the annual holiday allowance, reimbursements for commuting costs, and lunch allowances. These elements constitute a relatively significant part of overall compensation in Slovenia and notably benefit from more favourable tax treatment compared to standard wages.
