Starting from 1 January 2023 the overall tax-free amount (basic exemption) of 7848 euros per year or 654 euros per month will be applied on all types of income.
1) annual income up to 14 400 euros gives 7848 euros as annual basic exemption
2) in case annual income increases from 14 400 euros to 25 200 euros, basic exemption decreases according to the following formula: 7848 – 7848 ÷ 10 800 × (income amount – 14 400)
3) if annual income is above 25 200 euros, basic exemption is 0.
NB! The tax-free income of an employee of retirement age is a fixed amount - 704 euros per month and 8448 euros per year and it does not depend on the amount of the employee's income.
The Social Insurance Board calculates the basic exemption at pensionable age to the person's old-age pension, and if the old-age pension is less than this amount, based on the person's application, the employer also calculates the unused surplus to the wages or other income.