OECD Tax Policy Reviews: Slovenia 2018 by OECD

Author:OECD
Language: eng
Format: epub
Tags: Employment/Social Issues/Migration/Health/Economics/Taxation
Publisher: OECD Publishing
Published: 2018-08-19T16:00:00+00:00

Box 3.2. Estimates of a SSC cap at 3.5 times the average wage for employees

This box estimates the employee and employee SSC revenue loss associated with introducing a SSC ceiling for employees at 350% of the average wage. Using the average wage in 2016 of EUR 19 016, this gives a ceiling of EUR 66 556.

First, employer and employee SSCs are estimated as 22.1% and 16.1% of employment income for each employee in the tax record microdata.

Second, employer and employee SSCs are re-estimated but with a ceiling introduced where SSC payments are capped at 22.1% and 16.1% of EUR 66 556 for employees and employers respectively. In other words, all employees earning above this threshold pay employee SSCs of exactly EUR 14 709 and all employers pay exactly EUR 10 716.

The estimated SSC loss is given by the difference in SSC payments between the two sets of estimates. According to the analysis, the SCC loss associated with introducing a cap at 350% of the average wage for employee is EUR 61 million for employee SSC, and EUR 45 million for employer SSCs, so EUR 106 million in total (Figure 3.9).

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