Work incentive indicators, Slovenia, 2016

Tax burden on labour costs amounted to 38.7%
In 2016, 38.7% of labour costs of the person in paid employment who earned 67% of average worker’s gross earnings went to pay taxes and 61.3% for net earnings. The tax burden in 2016 was 0.1 of a percentage point higher than a year before.

Tax burden at moving from unemployment to employment set at 89.6%
In 2016 the tax burden for a single person without children was 89.6% of additional gross earnings at employment, which means that at moving from unemployment to employment single persons increased their net income by 10.4% of gross earnings; this is called the “unemployment trap”. The “unemployment trap” indicator shows the difference in a person’s net earnings at moving from unemployment to employment due to higher taxes and social contributions and lower social transfers in employment compared to earnings and higher social transfers during unemployment. Compared to 2015, the tax burden at moving from unemployment to employment for a single person without children decreased by 0.1 of a percentage point.

A couple with two children had higher tax burden at moving to a higher paid job than in the previous year
In 2016 the tax burden for a single person without children was 48.4% of additional gross earnings at moving to a higher paid job, while for a couple with two children it was 104,2%; this is called the “low wage trap”. The “low wage trap” indicator shows the difference in net earnings of employed persons at moving to a higher paid job (from 33% to 67% of average worker’s gross earnings) due to higher taxes and social contributions and lower social transfers than at the previous lower paid job with lower taxes and social contributions and higher social transfers. Compared to 2015, the tax burden at moving to a higher paid job for a single person without children remained the same and for a couple with two children increased by 5.8 of a percentage point.