Even if this target is met, the actual net earnings will increase by just €20 per month, moving from €1,093 to €1,113—a minimal rise of only 1.83%.
This marginal gain comes at a time when inflation and the rising cost of living are eroding purchasing power, making it difficult for employees to see tangible benefits from the wage increase. The primary reason behind this limited impact is Greece’s heavy taxation and high social security contributions, which absorb a significant portion of salary adjustments.
For every additional €100 in gross wages, more than a third is taken by the state through taxes and deductions, meaning that while government revenues grow, the net benefit for workers remains small.
A worker earning a gross salary of €1,500 per month will face total deductions of €387, with €175 going toward income tax and €212 toward social security contributions. This leaves a net income of €1,113. The average tax rate on salaries stands at 25.8%, but when employer contributions are factored in, the total burden on labor costs rises sharply to 39.4%.
Although nominal wages are set to rise, employees will continue to bear a high financial burden. For every additional €100 in gross salary, they will only see an actual increase of €66.99 after taxes and contributions. This means that while the headline salary figure may appear to be improving, workers will not experience a significant increase in disposable income, as much of the additional earnings will flow back into state coffers.
The planned increase in the average salary is expected to boost public revenues significantly, thanks to higher tax collection and social security contributions. In theory, this could provide the government with more fiscal space to implement tax cuts or increase social spending, depending on policy choices. However, the high cost of labor remains a crucial factor affecting business competitiveness and hiring. Employers will need to pay an additional €338 per employee in taxes and social contributions for a worker earning €1,500, bringing the total employment cost to €1,838 per month.
Ultimately, without meaningful tax and contribution reforms, the increase in gross salaries will do little to improve the real financial situation of workers.
