The Slovak labour market is facing significant changes in connection with the increase of the tax and social security burden on labour. As part of the consolidation of public finances in Slovakia, from January 1, 2026, personal income tax rates and health insurance contributions will increase by 1 percentage point. At first glance, these appear to be standard state measures to strengthen public revenues. However, a closer look shows that these consolidation measures create opportunities for employees to consider changing the way they work.

What will change from 2026?

According to the approved amendment to Act No. 595/2003 on Slovak Income Tax, in addition to the progressive tax rate of 19% on the tax base up to EUR 43,983.32 and 25% on the part of the tax base exceeding EUR 43,983.32, new progressive tax bands for personal income will be introduced: 30% on the part of the tax base exceeding EUR 60,349.21 and 35% on the part exceeding EUR 75,010.32.

The non-taxable allowance for the taxpayer will increase from EUR 479.48 to EUR 497.23 per month. However, due to the change in calculation, its amount will decrease more rapidly and will fall to zero once the annual tax base reaches EUR 43,983.32 (i.e., EUR 3,665.28 monthly).

Employee´s part of contributions to public health insurance will rise from the current 4% to 5% of the assessment base, with no maximum cap. Employee´s part of contributions to the Social Insurance Agency remains unchanged – 11% of the assessment base, with the maximum assessment base for 2026 set at EUR 16,764 per month.

Practical impacts

These consolidation measures in Slovakia will affect employees’ net income. They will not only impact the “wealthy,” but also a broad group of taxpayers who previously benefitted from the full or higher non-taxable allowance on taxpayer.

Their effective tax rate will thus increase in practice.

To illustrate, we prepared a model case comparing net monthly income of an employee in 2025 and 2026. Imagine a Slovak employee working solely in Slovakia for a Czech company (foreign employer), and another working partly in Slovakia and partly in the Czech Republic for the Slovak company. The employee is a Slovak tax resident – with permanent residence in Slovakia, a permanent home in both Slovakia and the Czech Republic but maintaining closer personal and economic ties to Slovakia.

For the employee with a gross monthly salary of EUR 3,000 working only in Slovakia, net income in 2026 will decrease by EUR 23.15 per month compared to 2025. If, however, the employee works for example 60% in Slovakia and 40% in the Czech Republic, their net monthly income will fall by EUR 20.86. This means that by increasing the share of work physically performed in the Czech Republic, the employee slightly improves their net income.

For a high-income employee with a gross monthly salary of EUR 7,000, the difference is even more significant due to the progressive tax rate. If the employee works only in Slovakia, their net monthly income in 2026 will decrease by EUR

122.94 compared to 2025. However, if the work is split 60% in Slovakia and 40% in the Czech Republic, the decrease will be EUR 51.38 per month. Again, by increasing the proportion of work physically performed abroad, the employee achieves a higher net income.

Key considerations for employers

The new consolidation measures in Slovakia may motivate employees to find ways to increase their net income. For those who can perform part of their work abroad, there is a legal opportunity for optimizing net income. Employers, however, should pay close attention and regularly verify the place of work and the tax residency of their employees to ensure that taxation of employment income and contributions to social and health insurance comply with applicable tax and social security legislation. At the same time, please mind that the work of employee from abroad may lead to the risk of creating a permanent establishment for the employer. Properly set rules regarding work from abroad are crucial for both employers and employees to meet legal obligations and avoid risks and potential penalties.

How can Accace help you?

We have extensive experience in cross-border employment.

• We provide individual assessments of tax and social security obligations and impacts from both the employee’s and employer’s perspective.
• We assess the risks related to the creation of a permanent establishment.
• We offer solutions for issues connected with determination of tax residency, taxation of employment income, possible tax exemptions, and more.
• We provide full payroll management for cross-border employees and related HR services.
• We determine affiliation to the social security system according to coordination rules.
• We assist with preparation of applications for the A1 form confirming participation in the Slovak social security system.
• We prepare and electronically file Slovak personal income tax returns under a granted power of attorney.
• We handle communication with tax authorities and provide full support in fulfilling your tax obligations

If you have further questions regarding income tax from employment, social security contributions, or the impacts of consolidation measures in Slovakia, please, do not hesitate to contact our experts

Martina Paprčková

Tax Manager | Accace Slovakia

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