I am so glad that somebody sat down and summarized what KTG has been reporting about for the last three years. Τhat is all the reporting about taxes and more taxes, and regular and emergency taxes that become permanent taxes. Not to forget the social security contributions and the income taxation based on fictitious income the finance ministry calculates but the taxpayer does not have.
In the article below, journalist Thanos Tsirou calculates how much an employee gets in his pocket after taxes and social security contributions are subtracted from his salary. Furthermore, the journalist of daily Kathimerini adds utility expenses and comes down to the shocking amount of 500 euro, an employee has in month to cover other personal needs like food and clothing.
Tsirou takes as example the ideal -and almost utopic – Greek employee of the private sector, who has a very well-paid job with 1,500 euro gross per month and gets his salary in time.
How one salary perishes
In the following example of a well-paid employee of 1.500 € gross, taxes and social security contributions reach 880 euro!
With gross monthly salary of 1,500 euros , the protagonist of the story is considered lucky if he has a job and the employer pays on time.
I would never have guessed that from these earnings – very “juicy” for the current circumstances -, about 60 % land in one way or another in the state treasury.
Income tax , social security contributions, solidarity levy , property ownership tax , road tax , special consumption taxes for basic items and Value Added Tax.
Of course, everyone in Europe is exposed to these kind of taxes. However Greeks pay almost the highest rate.
The benefits and services we receive by the state in return of high taxes are … well… not worth mentioning…
We suffer the higher deductions from our salary , we have the third highest VAT in Europe and the largest tax on heating oil , paying special consumption tax for electricity and mobile phones, while a special ‘possession’ tax has been imposed on vehicles and properties.
The result is according to what the hero of our example says, one of the hundreds of thousands of representatives of the so-called “middle class” .
The monthly salary of 1,500 euros exists only on paper.
The example is very descriptive:
The employer automatically withholds 248 euros for the social insurance contribution from the side of employee. Also withheld are 126 euros for income tax and 13 euros for solidarity levy , which was introduced as a temporary measure , but it will become permanent. Net earnings come down to 1,116 euros.
Gross €1,500 – €248 social insurance – €126 income tax – €13 solidarity levy = €1,116 net
The employee, resident of a middle class suburb in Athens (Chalandri), lives in a 120 sqm apartment, built five years ago. For every square meter he pays 6.5 euro ‘ownership tax’ or ’emergency property tax‘ that was introduced in 2011 as temporary tax but became permanent. The employee pays 780 euro annually for this tax, which is 65 euro per month.
€ 1,116 – € 65 = € 1,051
The man has a 1600cc vehicle for which he pays 265 euro annually as road tax. That is 22 euro per month. he travels 15,000km per year, for which he consumes 1,200 liters of gasoline. The tax per liter reaches about one euro ( consumption tax and VAT), meaning that the fuel tax is charged 100 euros per month.
€ 1,051 – €22 – €70 = € 952
Heating for 3 winter months: For the 120-sqm-apartment, the employee needs approximately 1,200 liter of heating oil. With purchase price at 1.28 euro per liter (0.57 euro tax), he pays 1,500 euro to the heating oil supplier at the beginning of the heating season, in November. €684 is tax (57 euro per month in tax). For 3-4 months of heating, the cost for the heating oil spread over the year is 125 euro per month.
€ 952 – €125 = € 827
Electricity consumption is some 1,200 KWh per quarter. The pure electricity consumption cost is 115 euro for 3 months, but it jumps up to 300 due to municipality fees and taxes, emergency property tax installment, VAT, consumption taxes and various charges for electricity transmission, utility services and gas emissions. The sum of taxe sin electricity bill is some 185 euro per quarter and 46 euro per month. Monthly bill is therefore 100 euro.
€ 827 – €100 = € 727
The little extra in life: One package of cigarettes per day makes an expenditure of 114 euro per month (of which 92 euro are taxes), the use of mobile phone deducts further 40 euro form the wage (11.33 euro tax and VAT).
€ 727 – €114 – €40 = € 573
After decucting all the above, the employee has 573 euro available to cover his needs in food, clothing, footwear, other utilities like water and for apartment building fees, tutorials for kids, cleaning material, entertainment. all these extra needs are subject to 13% and 23% VAT, which means the Tax Office receives about 100 euro per month in extra tax.
A family of four would need at least 80-100 euro per week for food and other daily life needs. A single household could come up with minimum 50 euro for food only.
What is left from the 1,500 euro gross salary at the end of the month? A nice nothing.
But the state has cashed €532 in taxes – the social insurance amount excluded.
(full article with more details in Greek here)
What does the taxpaying employee received for all these taxes he has paid to the state? A demolished health care system, an education with lots of holes and standing line up to 3 hours for public services, just to mention a few.
You can very well imagine the other case of an employee earning below 1,000 euro per month, in the average 500-700 euro for new hiring, and in addition has to anticipate for several months to get paid, while the monthly expenses slide through his fingers.
KTG had earlier written by mistake “a family of four would need at least 80-100 euro per month for food and other daily life needs”. Of course, I don’t know any super super market feeding a family with 80-100 euro per month. Correct is : “a family of four would need at least 80-100 euro per week for food…”
“A family of four would need at least 80-100 euro per month for food and other daily life needs. A single household could come up with minimum 50 euro for food only.”
I would say 80-100 euro per week for a family of 4 and not per month. Or tell me to which supermarket you go 😉
oh yes, sorry, per week not per month. thanks.
I know they do not care, they are ok, but this should be sent to every M.P. and member of the Troiker. How much can the Greek people take from thier Goverment before rising up against them? I think if a charismatic leader emerges Samaras and his gang had better hide.
I agree that taxes take a big chunk out of a Greek person’s income, but must point out a few discrepancies in the above accounting! The property tax seems to be included twice (in total electricity & taxes, also above at 65 euros) and the full price of electricity, heating, cigarettes and mobile phone are put down as deductions not just the tax element. Whilst electricity & heating costs are essentials (but not all tax), surely the cigarettes and mobile phone should be in the ‘what’s left over’ and before food and other essentials. Why on earth does someone struggling buy so many cigarettes or spend 40 euros on a mobile phone each month?
you need cell phone to check where your children are. I also understood that cig/mobile were fixed costs, while counted it was what was left to cover other needs. You don’t buy clothes and shoes once a month. as for property tax/electricity I tried to make it even. The idea of the article is how much taxes are paid a month. The income tax can be highter at the end of the year, or the tapayer can get tax returns. Also not calculated in the article were the so called “building utilities” which can be an average of 100 euro per month.
Just for comparison. Same person in sweden:
Employer pays: 13200 SEK (~1500 Euro)
Employee get in hand after all social charges and taxes: 8350 SEK (943 Euro)
Car taxes and gasoline taxes are almost identical.
For people owning their apartments in Sweden the heating and property taxes are mixed together usually. Basically heating costs are higher and property tax lower. For a 120 sqm apartment the cost would probably be about 500 Euro, however, noone with a salary of 1500 Euro would live in such a big apartment, so why not calculate with 200 Euro instead.
Electricity bill would be higher in Sweden due to higher taxes and fees. People generally don’t smoke, but maybe they would spend the same amount on snuff.
VAT is 25% in Sweden, with a jungle of exceptions for food (12%) etc.
You could of course argue that you would get more for the taxes in Sweden, but my point with this calculation is that there is nothing exceptional with the Greek taxes. My opinion is that there are other problems, like unemployment, bad public service and low salaries (due to low productivity and lots of mismanagement?).
Lets just point out as well that this would be an exceptionally low salary in Sweden, but with higher income the relative tax burden gets higher as well due to the progressive tax system.
correct. however this is the salary of a well-paid employee nowadays and where the majority earn less, while there is hardly a social welfare state to catch up the needy. An employee could live in 120 if he has wife and two kids.
“…One package of cigarettes per day makes an expenditure of 114 euro per month…”
Is this a requirement in Greece?
yes, we are obliged to smoke and die earlier than planned in order to disappear and not put a burden on our health care system due to non-smoke relevant diseases and also relief the broke pension funds. (just kidding)
How much of a difference would not smoking make? Think of it as 115 euro a month, for ‘extras’ of any kind. Be that entertainment, cigarettes, coffee, whatever. These are working people, entitled to a luxury.
so it is 🙂 apparently poor people should have no pleasure in life and just pay taxes to feed the state and the country’s lenders.