In the next edition of our News Flash, we would like to inform you about the government-announced changes to the child tax benefit in Slovakia, which will come into effect from January 2025. These changes will have a negative impact on the net income of families.

What does it mean?

Until the end of 2024, the child tax benefit in Slovakia is available for dependent children up to the age of 25. From January 2025, parents will only be entitled to the child tax benefit for children up to the age of 18, provided they meet the income criteria.

For children under 15, the basic child tax benefit will be EUR 100 per month, and for those between 15 and 18, it will be EUR 50 per month, provided the income criteria are met.

At the same time, the percentage limit from the partial tax base (ČZD), from which the maximum amount of the child tax benefit in Slovakia is calculated, is increasing. According to the number of children for which the taxpayer claims the child tax benefit, they will calculate the specified percentage of the ČZD (the partial tax base is calculated by deducting social contributions from the gross income). The income criteria from which the maximum amount of the child tax benefit for children is calculated are:

So, if the tax credit is claimed for 3 children, with a salary of, for example, EUR 1,500, the maximum tax credit in 2025 is calculated as follows: EUR 1,500 – EUR 201 (social contributions 13.4%) = EUR 1,299 x 43% = EUR 558.57. And according to the age of the children (e.g., if they are 5, 12, and 17 years old), we calculate the basic amounts of the tax credits: EUR 100 + EUR 100 + EUR 50 = EUR 250. The entitlement to the child tax credit will be EUR 250 per month, as the maximum amount of the tax credit is higher than the basic tax credit.

What if the income is not high enough?

If the income is not high enough to reach the basic amount of child tax credits when filing a tax return for 2025 (not when requesting an annual tax settlement from the employer but when filing a Type A or B tax return to the tax office), the partial tax base of the spouse or the other entitled person can also be added and the tax credit can be claimed. From January 2025, it also ceases to apply, if a higher claim for a child tax credit was recognized during the tax period than will arise when recalculated in the annual tax settlement or tax return, then the claim does not expire and the difference between the paid tax credit and the actual claim will need to be returned. When calculating monthly tax prepayments, we only consider the partial tax base of the taxpayer who is claiming the tax credit. The partial tax base of the other entitled person is only taken into account when filing a tax return for 2025. On the other hand, a new maximum income for claiming a child tax credit is being introduced, which means a reduction or even loss of the entitlement to a child tax credit for taxpayers with high incomes according to Section 33 paragraph 11 of the Income Tax Act.

The table below provides several examples of reductions in child tax credits:

If the partial tax base is higher than 1.5 times the average monthly wage as determined by the Statistical Office of the Slovak Republic for 2023 (valid for 2025, for 2026 see the wage determined in 2024), the amount of the child tax credit shall be reduced by EUR 0.1 of the difference between the partial tax base and this 1.5 multiple of the average monthly wage. The average monthly wage in 2023 was EUR 1,430 and its 1.5 multiple is therefore EUR 2,145. If the annual partial tax base is higher than EUR 25,740 (18 * 1,430) – the entitlement to the child tax credit will be reduced. In the case of monthly application, the child tax credit will be reduced from a partial tax base of EUR 2,145 (1.5 * 1,430).

If a declaration is signed with the employer, the child tax credit is applied every month and the earnings are, for example, EUR 2,500 (gross), the partial tax base with standard deductions will be EUR 2,165, which is EUR 20 more than 1.5 times the average monthly wage. And 1/10 of these EUR 20 is EUR 2, which means that each child tax credit will be EUR 2 lower than its basic amount.

• For a child under 15 years of age: 100 – EUR 2 = 98
• For a child over 15 years of age: 50 – EUR 2 = 48

Claiming in the annual tax settlement

If the tax credit is claimed only in the annual tax settlement or by filing a tax return, we need to look at the annual income, i.e., 12 * EUR 2,500 (EUR 2,165) = EUR 30,000. The partial tax base will therefore be EUR 25,980. We subtract EUR 25,740 (12 * EUR 2,145) from it, which is EUR 240, and 1/10 of that is EUR 24. So the annual entitlement to the child tax credit will be:

• For a child under 15 years of age: 12*100 – EUR 24 = 1 176
• For a child over 15 years of age: 12*50 – EUR 24 = 576

By calculating in this way, we find out that if the gross monthly earnings exceed EUR 3,600, the entitlement to a child tax credit for a child of any age is zero. And if there are only children older than 15 years in the family, a gross income of EUR 3,055 is sufficient to have a zero tax credit, regardless of the number of dependent children in the family.

How does a Christmas bonus affect the child tax credit?

What happens if someone earns EUR 2,500 (gross) each month, claims the child tax credit monthly, but in December the employer surprises them with a Christmas bonus of EUR 3,000?

From the previous calculations, it’s clear that the child tax credit was claimed 11 times, each time reduced by EUR 2 per child. In December, therefore, no child tax credit will be granted in the payment (because EUR 2,500 salary + EUR 3,000 bonus minus EUR 737 social contributions minus EUR 2,145 (1.5 times the average monthly wage) = EUR 2,618, and 1/10 of that is EUR 216.80 by which the basic entitlement to the child tax credit must be reduced), so in December, the entitlement to the child tax credit for children will be zero euros.

But when it comes to the annual tax settlement or tax return, the calculation will be 12 * EUR 2,500 plus the bonus of EUR 3,000, which is EUR 33,000. After deducting social contributions, the partial tax base will be EUR 28,578. From this, we subtract 12 * 1.5 times the average monthly wage, which is EUR 25,740: EUR 28,578 – EUR 25,740 = EUR 2,838. One tenth of that is EUR 283.80, and this amount will reduce the annual entitlement to the child tax credit.

• For a child under 15 years of age: 12*100 – EUR 283.80 = EUR 916.20
• For a child over 15 years of age: 12*50 – EUR 283.80 = EUR 316.20

Since 11 * EUR 98 = EUR 1,078 was claimed during the year, but the entitlement was only EUR 916.20, EUR 161.80 must be refunded. If a tax credit for an older child was claimed 11 times at EUR 50, equaling EUR 550, but the entitlement was only EUR 316.20, then EUR 233.80 must be refunded.

If you’re claiming a child tax credit on a monthly basis, you need to take into account all sources of taxable income, including bonuses, overtime pay, and benefits-in-kind. This means considering any additional payments, perks, or advantages provided by your employer that have a monetary value.

Zuzana Krajčová

Payroll Manager | Accace Slovakia

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