"Changes to the minimum wage can represent little more than a re-shuffling of numbers on payslips if changes to tax and social security contributions are also made"
The latest Annual Review of minimum wages in the EU gives a detailed analysis of minimum wage rates across Europe, and not only looks at the nominal and real terms increased in minimum wages - but also levels of taxation and net pay.
When tax and social contributions are analysed, there are considerable differences in how much social contributions minimum wage workers make across Europe. For example, a single, minimum wage worker in Vilnius with no dependents would pay 39.5% of their gross earnings in tax and social contributions; whereas a minimum wage worker in Brussels in the same situation would pay just 4.25%.
Christine Aumayr-Pintar, Research Manager at Eurofound, says that analysing net pay is vital when looking at minimum wages. Click here or on the related material below to listen to the audio.
Full audio transcription of the clip in the Word document attached.
You can download the full Minimum wages in 2019 annual review here.
For more information on this story, please contact James Higgins.