Full-time contracts being bolstered with incentives
Two key announcements by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Exhibition, namely the exemption from the levy to practice a profession (“telos epitidevmatos”) and the 40% discount on the social security contributions of each part-time employee, whose contract will be converted to full-time, promise to give hundreds of thousands of small and medium-sized businesses and business owners an economic breather.
Experts estimate that these are two of the most important business support measures, combined with the effort to stimulate employment, as they create the conditions for a large reduction in non-salary costs.
Based on what is known so far, from September 10 and until the end of 2023, all companies with a ratio of part-time employees above 50% will enjoy a 40% discount on their contributions for each part-timer of theirs that they convert into a full-timer. The measure is meant to contain illegal labor, as part-time work often conceals eight or even 10 working hours per day.
In practice, with the 40% reduction in insurance contributions, the “legalization” of a worker who appears as part-time, but works under full-time conditions, becomes extremely advantageous. This is because anyone employing a part-timer five days a week for four hours a day pays 305.56 euros net per month to the employee and €132.12 euros in contributions. The total cost is €437.68 per month. If this employee’s contract is converted to full-time, eight hours per day, five days a week, with a basic salary of €713, the employee will pocket €614.11, and the employer will pay €154.69, thanks to the 40% discount. Therefore the total cost will be €768.80 instead of €871.93 without the discount.
The benefit from the deduction of payroll expenses from the company’s gross income, of the order of €95.53/month, should also be calculated, so total costs amount to €673.27 with a final benefit of €198.66/month.
The exemption from the profession levy concerns large companies that increase their average annual number of full-time employees for at least three months per year.
