Social security contributions in detail
Employees must be registered with the Social Security Institution (‘SSI’) at least one day prior to commencement of their employment. Entitlement to registration for social security cannot be waived or altered in any way. According to law, employers must register each employee with the SSI and pay the employee’s monthly insurance premium to it. Employers must pay both the employer’s and the employee’s portion of the social security contributions. The employee portion will be deducted from the employee’s gross salary.
The employer must pay SSI contributions to the value of 22.5% of the monthly salary of eligible employees (consisting of 20.5% for the social security premium and 2% for the unemployment portion). Additionally, there is an employee portion of 15% of the monthly salary of affected employees (consisting of a 14% social security premium and 1% unemployment portion).
Social security contributions are calculated based on the employee’s salary. Every year the government determines the maximum and minimum salary ranges subject to social security contributions.
If the current salary of the employee falls between the minimum and maximum salary amounts the social security contributions will be calculated based on the salary of the employee. If the salary of the employee exceeds the maximum salary limit, social security contributions will be calculated based on the maximum salary amount.
However, please note that certain exemptions may apply.
Author: Bener Law Office
Date: April 2020
Note: All currency conversions into EUR were made on 1 February 2019, using a mid-market rate.