Government preparing tax reform abolishing “super gross” wage

The government is preparing a tax reform that would abolish the so-called “super gross” wage and significantly lower people’s taxes.

The super gross wage, which has been the base for calculating employee income tax since 2008, is the sum of an employee’s gross wage plus social and health insurance premiums.

Instead, the government proposed amendment would introduce a progressive tax rate of 15% for income of up to 1.5 million crowns and 24% for income above this amount.

Entrepreneurs, including those claiming expenses as a percentage of income, would be allowed to deduct 75% of social security and health insurance contributions paid.

Previous attempts to abolish the super gross wage failed because of the loss to state revenues.

Now the government wants to push it through so as to encourage consumer spending and help rev up the economy post-coronavirus.