Greece

The national currency is the Euro (EUR). In 2020, EUR 0.88 was equal to USD 1. In 2020, the estimated gross earnings of the average worker are EUR 21 139 (Secretariat estimate).

Individuals are subject to national income tax. Every individual who derives income from sources in Greece is subject to tax irrespective of his nationality, place of domicile or residence. Moreover, every individual with domicile in Greece (more than 183 days) is subject to tax on his/her worldwide income irrespective of the individual’s nationality. Due consideration is given to bilateral conventions designed to obviate double taxation.

All individuals who have completed 18 years of age are obliged to file a tax return regardless of having taxable income or not. Regarding income derived by minor children, the parent who has the custody is liable for filing a tax return. The income of minor children is added to the income of the parent who has the custody and is taxed in the name of the parent who is in principle liable for tax filing. This provision does not apply to the following types of income, in respect of which the minor child has a personal tax obligation: a) employment income and b) pensions due to the death of his father or mother.

Spouses file a joint return but each spouse is liable for the tax payable on his or her share of the joint income. A joint return can also file persons who have entered into a civil union – partnership. In this case the two parts have the same tax treatment as married couples. Losses incurred by one spouse or one part of a civil union-partnership may not be set off against the income of the other spouse or part. Spouses or parts of a civil union – partnership file a return separately if a) they have been divorced or have terminated the civil partnership at the time of the tax filing or b) one of the spouses or one part of the civil partnership is bankrupt or has been subject to guardianship.Taxpayer’s spouse can be considered as a dependent member, provided that he/she does not have any taxable income.

Single children under the age of 18, children who are adults up to 25 years old and study at the university, or serve their military service or are registered as unemployed to the Manpower Employment Organisation (OAED), taxpayers’ ascendants and spouses’ relatives (up to the 3rd degree) who are orphans are deemed to be borne by the taxpayer provided that they cohabit with the taxpayer and their annual taxable income does not exceed the amount of EUR 3 000 (alimony and disability benefits and similar allowances are not included). Single disabled children (>=67%) or spouses’ disabled siblings (>=67%) are also considered as dependent members, except if their annual income exceeds the amount of EUR 6 000 (alimony and disability benefits and similar allowances are not included).

  • Social security contributions: all compulsory social security contributions and optional contributions to legally constituted funds are fully deductible from taxable gross income.

  • The tax arising by the tax scale for employees and pensioners is reduced as following:

    • by EUR 777 for annual income up to EUR 12000, for taxpayers with no dependent children

    • by EUR 810 for annual income up to EUR 12000 for taxpayers with one dependent child

    • by EUR 900 for annual income up to EUR 12000 for taxpayers with two dependent children

    • by EUR 1120 for annual income up to EUR 12000 for taxpayers with 3 dependent children;

    • by EUR 1340 for annual income up to EUR 12000 for taxpayers with 4 dependent children

    • for taxpayers with more than 4 dependent children, the above mentioned tax credit is increased by EUR 200 per child

    • for income exceeding EUR 12000 , the above mentioned tax credit is being reduced by EUR 20 for every EUR 1 000 of taxable income

In order to maintain the above tax reduction under this, the taxpayer is required to make payments of acquiring goods and receiving services within the country or in Member States of the European Union or EEA, which have been paid through electronic payments, the minimum amount of which is 30% of taxable income, and up to EUR 20.000

Should the value of the above payments is less than the one required, a penalty of 22% is imposed to the remaining amount.

  • The amount of tax derived on the basis of all scales is reduced by EUR 200 for the taxpayer himself as well as for each dependent member, provided that the taxpayer or his dependents are disabled (over 67%) or disabled soldiers or military personnel injured in the course of their duties or war victims or victims of terrorist attacks or in case they receive pension by the State as war victims or as disabled.

If from the joint tax return submitted the wife has no taxable income declared then the deduction of point C of this paragraph is attributed to the payable tax of the other spouse.

Note: Taxpayers who reside abroad but derive taxable income from sources in Greece are not eligible for these deductions, with the exemptions of residents of the EU Member States who derive at least 90% of their total income from sources in Greece.

The payable amount of tax is reduced by 20% on the donations to certain bodies, as well as to political parties, party alliances and candidates for the National Parliament and the European Parliament, since the donations exceed during the tax year the amount of EUR 100. The total amount of donations cannot exceed 5% of taxable income.

Some forms of income, specified by Law are exempt from the tax.

Examples:

  • on condition of reciprocity, income of all kinds derived abroad by foreign ambassadors and diplomatic representatives, consulate agents and employees of embassies and consulates that have the nationality of the represented State as well as by individuals working in the EU Institutions or other International Organizations;

  • alimony received by the beneficiary according to the Court adjudication or notary Document;

  • all forms of pensions and relief provided to war victims and their families, as well as to soldiers and military personnel injured in the course of their duties in times of peace;

  • benefits and similar allowances provided to special categories of disabled persons;

  • salaries, pensions etc. paid to disabled persons (over 80%);

  • unemployment benefits granted by the National Employment Organisation (OAED) provided that the total annual income of the beneficiary does not exceed the amount of EUR 10 000;

  • financial aid to recognized political refugees, to persons residing temporarily in Greece for humanitarian reasons and to persons that have submitted the relevant application to the competent Greek authorities, paid by bodies carrying out refugee aid schemes financed by the UN and the EU;

  • the benefit for hazardous labour provided to employees working in the armed forces, the police, the fire and port departments as well as the special allowance to medical, nursing and ambulance staff up to 65%;

  • the fees paid by the World Association of Disabled Artists (VDM.FK) to the members of foot and mouth painters, who are tax residents of Greece, exclusively for the work of painting paid by the Union with exchange.

Taxable income is derived from the following sources:

  1. a) Income from employment and pensions.

  2. b) Income from business activities which includes income from agricultural activity although taxed differently.

  3. c) Investment income which includes income from dividends, interests and loyalties and income from immovable property (rental income).

  4. d) Income from capital gains, which includes income deriving on transfer of real estate or securities.

Net income is computed separately within each category with tax rules that vary across income categories.

Taxpayer is subject to an alternative minimum tax when his imputed income is higher than his total declared income. In this case, the difference between imputed and actual income is added to the taxable income. Imputed income is calculated on the basis of the taxpayer’s and his dependents’ living expenses.

Employment income is subject to withholding tax. The tax is withheld by the employer and is calculated by applying the taxpayer’s progressive income tax schedule. The employer calculates the withholding tax on the basis of the taxpayer’s annual net salary (net of social security contributions). The resulting tax is the annual tax due, 1/14 of which constitutes the monthly withholding tax for the private sector’s employees (every employee in the private sector receives 14 monthly salaries per year, i.e. 12 monthly wages plus 1 salary as Christmas bonus, ½ salary as Easter bonus and ½ salary as summer vacation bonus). For the employees of the public sector, the monthly withholding tax is calculated as 1/12 of the annual tax due, because of the fact that bonuses in the public sector have been eliminated. If the taxpayer's final tax liability (derived from the annual declared income) exceeds the aggregate of the amounts already withheld or prepaid, the remaining tax is generally payable in three equal bimonthly instalments. Any excess tax paid or withheld will be refunded.

Depending on the income category the following tax schedules apply:

The above tax scale does not apply for employment income acquired by:

  • Officers working in ships of the merchant marine, whose income is taxed at a 15% flat rate and

  • Low-income crew working in ships of the merchant marine, whose income is taxed at a 10% flat rate.

For deductions see above section 1.1.2.1.Income from agricultural business is taxed independently but with the same tax schedule. The previously described tax credit is granted to farmers as well. In the case where a farmer is earning income from employment / pension, only one tax credit is given.

Income from dividends is taxed with a 5% flat rate, and income from interests is taxed with a 15% flat rate. Income from royalties is taxed at a 20% flat rate.

From 1 January 2017, with the above tax scale is taxed, under certain conditions, income deriving from short term rentals of sharing economy (if it is not considered as a business activity).

Income from capital gains is taxed at a 15% flat rate.

In the total taxable income, the Special Solidarity Contribution is additionally imposed. Income up to EUR  12 000 is not subject to the solidarity contribution. For income exceeding EUR 12 000, the solidarity contribution applies with the following marginal rates:

There are no local income taxes in Greece. Municipalities (the local authorities) receive 20% of the national income tax revenues.

The great majority of individuals who are employed in the public and private sector and render dependent personal services are principally, directly and compulsorily insured in the Electronic National Social Security Fund (e-EFKA).Apart from the main contribution, e-EFKA compulsorily collects contributions for other minor Funds created for the employee’s benefit (Unemployment Benefits Funds, etc.). Since 01/03/2020 the subsidiary Unified Supplementary Insurance and Lump-Sum Fund (ETEAEP) was integrated into the National Social Security Fund (EFKA) which is renamed as “Electronic National Social Security Fund” (e-EFKA), according to law.4670/2020, as follows: the Branch of Supplementary Insurance of former ETEAEP is now the Branch of Supplementary Insurance of e-EFKA and the Branch of Lump-Sum Benefits of former ETEAEP is now the the Branch of Lump-Sum Benefits of e-EFKA.

The average rates of contributions payable by white-collar employees as a percentage of gross earnings are as follows (%):

From January 1st 2020 to 31 May 2020

From June 1st 2020 to 31 December 2020

Contribution for health coverage is included in the contribution payable to e-EFKA. The contribution rate is 7.10% (4.55% paid by the employer and 2.55% paid by the employee).

Higher contributions are due (18.78% paid by the employee and 26.48% paid by the employer) in case of blue-collar workers who are engaged in heavy work (unhealthy, dangerous, etc.) as they are entitled to a pension five years earlier than the other workers (2.20% for main pension and 1.25% for supplementary pension paid by the employee and 1.40% for main pension and 0.75% for supplementary pension paid by the employer). In the industrial sector, the employer pays an additional occupational risk contribution at a rate of 1% because these workers are more vulnerable to labour accidents and occupational diseases.

The amount of the maximum insurable earnings for calculating the monthly insurance contribution of employees and employers is set from 1/1/2020 to EUR 6 500 and is the same for main insurance and supplementary insurance as well.

As of 1 March 2020, the Unified Agency for Auxiliary Social Insurance and Lumpsum Benefits (ETEAEP) is integrated into (EFKA). The latter is renamed “Electronic National Social Security Fund” (e-EFKA).

The 7.00% (3.50+3.50) rate is valid until 31/05/2019. From 1 June 2019 to 31 May 2022 it decreases to 6.50% (3.25+3.25) and from 1 June 2022 onwards decreases to 6.00% (3.00+3.00).

The contribution for the lawyers with contract (employed lawyers) of the ex Supplementary Insurance Branch of the former ETEAEP from 1 January 2020 until 31/5/2022 is a fixed sum of EUR 42 ‎, EUR 51 ‎ or EUR 36 ‎ per month according to the corresponding insurance class level. The insured persons are set, from 1-1-2020, to the first insurance class and are obliged to contribute EUR 42 per month, while from 1-7-2020 and onwards they can choose among the stated amounts. This contribution is shared between the lawyer and the employer of the lawyer..

For the ex Lump Sum Branch of ETEAEP, the contribution and the monthly basis on which the contribution is calculated, of those first insured before 1992 employees, is determined by the social security body which was integrated into ETEAEP. The contribution of those first insured after 1992 employees for the ex Lump Sum Branch of ETEAEP is set at 4%. The monthly basis, on which the contribution is calculated, is the same basis amount as for e-EFKA.

Insurance contribution for the employed engineers, employed lawyers and doctors insured at the ex lump-sum benefits branch of ETEAEP is calculated from 1 January 2020 as a fixed amount of EUR 26, EUR 31 or EUR 37 per month according to the corresponding insurance class level. The insured persons are set from 1-1-2020 to the first insurance class and are obliged to contribute EUR 26 per month and from 1-7-2020 and onwards can choose among the stated amounts. The contribution for lawyers is shared ,between the lawyer and the employer of the lawyer.

All these social security contributions are fully deductible for income tax purposes.

According to the National General Collective Labour Agreement, a marriage allowance, which is set at a rate of 10% of the gross salary, is granted only to workers employed by employers that belong to the contracting employer organisations1. For public servants no marriage benefit is granted.

According to the Law 4512/2018, the “Single children support allowance” is calculated according to the number of dependent children as well as the household equivalent income category.

The equivalence scale assigns a value of 1 to the first household member, of 1/2 to the spouse and of 1/4 to each dependent child. Especially, for single parent families, a value of ½ is assigned to the first dependent child and a value of ¼ to each additional child.

Households that are entitled to the allowance are divided into three income categories according to their income:

  1. a) Household equivalent income of < EUR 6 000: monthly allowance of EUR 70 for the first child, EUR 70 for the second child and EUR 140 for every additional child.

  2. b) Household equivalent income of EUR 6 001 – 10 000: monthly allowance of EUR 42 for the first child, EUR 42 for the second child and EUR 84 for every additional child.

  3. c) Household equivalent income of EUR 10 001 – 15 000: monthly allowance of EUR 28 for the first child, EUR 28 for the second child and EUR 56 for every additional child.

No significant changes in the tax and benefit system have taken place since 2016.

No labour taxation changes have been legislated. A monthly special allowance has been granted to employees of firms affected by the coronavirus crisis, whose labour contracts have been suspended based on specific NACE codes.

Methodological note for the estimation of the average annual earnings per employee, for the period 2000 – 2018

Terminology and coverage

The average annual earnings below refer to full time employees for Sectors C to N of ISIC Rev.3.1, before 2008, and for Sectors B to N including Division 95 and excluding Divisions 37, 39 and 75 of ISIC Rev. 4, for 2008 onwards.

Data sources

In the estimation procedure of the average annual earnings per employee, for the period 2000-2018 the following data are taken into account:

  • Annual earnings and number of employees, as derived from the Structure of Earnings Survey (SES), of the years 2002, 2006, 2010, and 2014.

  • Hours worked and annual average number of employees, as derived from the Labour Force Survey (LFS), of the years 2000 – 2018.

  • Average annual earnings indices, as derived from the Indices on Quarterly Labour Cost Survey, of the years 2000 – 2018.

The Average gross Annual Earnings per full time employee for the period 2000 to 2019 includes:

  • The special payments for shift and night work, as well as work during weekends and holidays;

  • The total annual bonuses as well as those that are regularly paid on a monthly basis, the 13th salary (Christmas salary, where applicable) and 14th salary (Easter and vacation payments, where applicable)

  • The annual bonuses based on productivity;

  • The education and working time allowance;

  • The marriage and children allowance and excludes :

  • The annual payments in kind: foods, drinks, footwear, clothes, accommodation, business cars provided, mobile phones, etc;

  • The annual premiums related to profit-sharing schemes.

The data for 2015 and onwards will be revised when the final results of the SES 2018 will be available.

Data in bold refer to data from SES 2002, 2006, 2010 and 2014.

It should be noted that the data with reference years 2000 - 2005 are different from those of the succeeding years with regard to the source that was used for the calculation of the LCIWages For the years 2000 - 2005 the index was calculated on the basis of data from National Accounts deriving from administrative sources, while for the years 2006 - 2019 the calculation of LCIWages was based on the quarterly Labour Cost Survey.

Finally, we would like to inform you that the data refer to the mean yearly gross income for full-time paid employees, regardless of:

  • Marital status

  • Number of children

  • Employer’s contributions

  • Taxes paid

Contributions to private pension and sickness schemes made by employers are not added to employees’ gross earnings for tax purposes (but they are subject to special taxation entailing extinction of tax liability). Since these contributions are not obligatory for employers, no data is provided by the National Statistical Service of Greece. Very few employers have adopted such additional insurance schemes.

2020 Parameter values

2020 Tax equations

The equations for the Greek system in 2020 are mostly on an individual basis The level of gross earnings for the principal earner is increased by the spouse and child subsidy paid by the employer

The functions which are used in the equations (Taper, MIN, Tax etc) are described in the technical note about tax equations Variable names are defined in the table of parameters above, within the equations table, or are the standard variables “married” and “children” A reference to a variable with the affix “_total” indicates the sum of the relevant variable values for the principal and spouse And the affixes “_princ” and “_spouse” indicate the value for the principal and spouse, respectively Equations for a single person are as shown for the principal, with “_spouse” values taken as 0.

Note

← 1. Namely the Hellenic Federation of Enterprises, the Hellenic Confederation of Professionals, Craftsmen & Merchants, the National Confederation of Hellenic Commerce and the Association of Greek Tourism Enterprises.

Mentions légales et droits

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© OCDE 2021

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