By Chrysostomos Tsoufis

Five hundred and sixty thousand minimum wage earners, and about that many more who receive one or more of at least 18 benefits affected by its progress, were sure to welcome the increase in the minimum wage, the fourth in a row since 2019.

Those who probably….clenched their teeth are the freelancers.

On the one hand, for the obvious. Many of the 735,000 employ one or more workers who are paid – at best many times unfortunately – the minimum, therefore an increase in it means an increase in wage costs.

On the other hand, the increase in the minimum wage also brings an increase in their taxation.

This is because from this year freelancers and self-employed people are taxed based on the assumption that it is not possible to have annual earnings below those of those paid with the minimum wage.

If the minimum wage did not increase this year, this would mean that the minimum tax for a self-employed person would be calculated based on an assumed annual income of €10,920, and therefore would reach at least €1,102.

Now with the increase of the minimum from €780 to €830, the calculation base also increases to €11,630 and thus the tax to €1,258.

Therefore, the increase in the minimum wage increases the tax for the freelancer and the self-employed by at least €156.

And we say at least because on this basis various factors affect which can increase the assumed income even to €50,000.

For every three years that the taxpayer completes from the start of his business, regardless of KAD, after the first three years and with a higher than 3 three years, 10% is added to the minimum income.

For the calculation of the minimum income, any income from salaried work of the self-employed is taken into account.

The time during which the freelancer had a work stoppage is not taken into account when calculating the minimum wage. (The minimum salary cannot be less than the maximum annual salary of up to €30,000 that the self-employed person pays to his staff)

In addition, the minimum assumed income is increased by 10% of the annual payroll costs (salary, employer contributions, benefits in kind) of the staff employed by the self-employed in his business, with a maximum of €15,000.

When the annual turnover of the self-employed person is significantly higher than the average annual turnover of the KAD to which he belongs, then the minimum income increases:

  • 35% for exceeding 100% of the annual turnover of KAD
  • 70% for exceeding 150% of the annual turnover of the KAD
  • 100% for exceeding 200% of the annual turnover of KAD with a maximum limit of €50,000