Archives: Countries

The pages and information for specific countries where Asinta partners can be found.

Hungary

Mandatory Employee Benefits in Hungary

Mandatory employee benefits in Hungary include pension, parental leaves, PTO, and eye exams. Supplementary employee benefits include medical, life, and accident insurance. Perks as an employee benefit are not popular because they are taxed as salary.

Pension

The pension system was radically reformed in 1997 with the intention of placing its finances on a sustainable footing, and mandatory private pillar II pensions were introduced with the aim of replacing at least 25% of the state pension for those retiring after 2013. This system was subsequently dismantled by a series of measures taken by the government in November 2010 and March 2012. The mandatory private pillar II provisions were transferred back to state pillar I, and their associated assets were used to reduce the country’s fiscal deficit. The government wants to encourage additional voluntary private retirement savings and, as a first step, in 2014, introduced new tax-deductible pension insurance, which has proved to be popular and continues to drive market growth. However, employer adoption is still below average. State retirement benefits are provided through pension insurance administered by the Hungarian State Treasury (from 1 November 2017).

The basic pension is called the First Pillar, and additional, mandatory benefits, based upon differing contributions, is the Second Pillar (only for the existing members). The Third Pillar relates to voluntary contributions for extra benefits. The Forth Pillar concerns contributions to specific accounts.

The normal retirement age for men and women is gradually increasing dependent on the birth year as follows:

Birth Year Retirement Age
1954 63.5
1955 64
1956 64.5
From 1957 65

Women may retire at any age with at least 40 years of qualifying insurance, including at least 32 years (30 years where the woman has raised a disabled child) of insurance in respect of a gainful activity (reduced for those who have raised at least five children by one year for each additional child raised, subject to a maximum reduction of seven years of qualifying insurance).

Pensionable salary for contribution purposes is based on the employee’s salary. Effective from July 1, 2020, employees/insureds contribute 10%.

The minimum pensionable salary for employer contribution purposes is equal to the minimum wage; employer contributions are at least based on the minimum pensionable salary.

The monthly minimum wage is equal to HUF 200,000 (HUF 260,000 for positions that require at least a secondary education) in 2022.

The monthly minimum wage is equal to HUF 232,000 (HUF 296,400 for positions that require at least a secondary education) in 2023.

Legislated Leaves

Statutory paid annual leave is provided for 20 days (25 days for employees under age 18, employees permanently working underground, and other prescribed conditions and employees assessed as at least 50% disabled).

Statutory paid annual leave is increased, dependent upon the age of the employee, as follows.

Age of the employee (years) Additional statutory paid annual leave (days)
Over age 25 1
Over age 28 2
Over age 31 3
Over age 33 4
Over age 35 5
Over age 37 6
Over age 39 7
Over age 41 8
Over age 43 9
Over age 45 10

In addition, statutory paid leave is provided in the following circumstances:

  • 2 days where the employee has one child under the age of 16 (four days per disabled child)
  • 4 days where the employee has two children under the age of 16 (six days per disabled child)
  • A total of 7 days where the employee has more than two children under age 16 (nine days per disabled child)
  • 2 days in case of the death of a relative.

Paid Time Off

Unpaid leave is provided in the following circumstances:

  • Family care leave where the duration of care (subject to a maximum of two years) in case of caring for a relative for more than 30 days
  • Military service leave – the duration of actual reserve military service.
  • While on unpaid leave, the employee may receive short-term sickness benefits (see short-term sickness section for further detail) for:
  • an unlimited number of days in case of caring for an ill child under age one
  • Up to 84 days in case of caring for an ill child from age one up to age three
  • Up to 42 days (84 days for a single parent) in case of caring for an ill child from age three up to age six
  • Up to 14 days (28 days for a single parent) in case of caring for an ill child from age six up to age 12

Maternity benefits (known locally as pregnancy and confinement benefits) are provided through health insurance administered by the Hungarian State Treasury (from 1 November 2017).

To qualify for the pregnancy and confinement benefit, the employee must have at least 365 days of qualifying insurance within the two years preceding the expected childbirth

The pregnancy and confinement benefits are equal to 70% of the employee’s salary averaged over the year preceding maternity leave (provisions apply where the employee has less than 180 days of qualifying insurance within the year preceding maternity leave).

The pregnancy and confinement are payable for 24 weeks.

Paid paternity leave is equal to 100% of the employee’s salary and is provided for five days (seven days in case of twins) within two months following childbirth.

Family allowances are provided through health insurance administered by the Hungarian State Treasury. Those eligible receive the following family allowances (from 2018):

  • HUF 12,200 per month for one child (HUF 13,700 for a single parent),
  • HUF 13,300 per month per child for two children (HUF 14,800 for a single parent
  • HUF 16,000 per month per child for three or more children (HUF 17,000 for a single parent) and
  • HUF 23,300 per month for a disabled child (HUF 25,900 for a single parent)
  • childcare benefit – equal to 70% of the employee’s average salary (the maximum average salary is two times the minimum wage) and is payable from the end of maternity benefits until the child attains the age of two
  • childcare allowance is payable until age three (age 10 if disabled) or until the end of the first year of school for twins

Eye Exams

Eye exams are usually included as part of the Occupational Health Examination, which is compulsory, and the type of examination depends on the company’s activity.

Vision benefits are separately defined and customarily include eyeglasses and glass frames, but it is restricted in the internal company policy.

Cafeteria system 2023

Type of benefits

  • Tax-free benefits include kindergarten, nursery, cultural service, sports ticket/pass (0% tax), virus tests, vaccination, using bicycles of Employers
  • Fringe benefits “SZÉP” card up to a given amount (normally till 450K HUF/year)

= (15% Personal Income Tax + 13% social contribution tax) =28% tax

  • Certain defined benefits include a “SZÉP” card over the given amount, cash deposit, gift of small value, group insurance

= (15% PIT + 13% social contribution 1.18 =33.04% tax

This website provides more information about Hungary’s labor code for 2023.

Supplementary Employee Benefits

Retirement

  • Pension Insurance
    • Policyholder: Corporate or individual (20% tax refund in case of individual policy)
  • Voluntary Pension Fund
    • Policyholder: Corporate or individual (20% tax refund in case of individual policy)

Due to taxation (in the case of company policies), Pension insurance is placed by the individuals. Companies continue their voluntary pension fund only if they had it in previous years. The corporate product is taxable.

Healthcare/ Medical Insurance

Companies are interested in this coverage; it is a popular employee benefit element.

  • Prevention screening 1x annually
  • Out-patient services / limited or without any limitation
  • Overall laboratory & diagnostic tests (MR, CT, PET CT, X-ray, UH, etc.) – high-value diagnosis
  • 1-day-surgery

Social security is available in Hungary, but Medical insurance is recommended due to the long waiting lists, long queuing, etc.

Medical insurance is taxable.

Group life, accident, and health insurance

Companies are interested in this coverage, and it is a popular employee benefit element.

  • Term life
  • Accidental death, accidental disability
  • Short-term disability
  • Critical illness
  • Daily hospitalization resulting from accidents and illness

Group life, accident, and health insurance are taxable.

 

Employee Perks

Stipends for massage are common, as are ‘all you can move’ sports cards and wellness programs. These perks are taxed as salary, making them not very popular anymore.

 

This information about mandatory and supplemental employee benefits in Hungary comes from Asinta’s Central and Eastern European Partner, the GrECo Group.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.

Slovak Republic

Mandatory employee benefits in Slovakia include pension, legislative leaves, and unemployment insurance. Supplementary employee benefits in Slovakia, or perks, include company cars, additional vacation days, and group life insurance.

Mandatory Employee Benefits in Slovakia

Pension

Pension funding in Slovakia is based on mandatory contributions from salary. Both the employer and employee must contribute, and the system is very much automated. The compulsory system has 2 pillars. The first pillar contributions are paid to the state fund called Socialna poistovna (the Social Insurance Agency). The second pillar offers choices consisting of Socialna poistovna or several other private licensed providers. Each provider offers several investment funds with various degrees of investment risk.

The pension system also has a voluntary third pillar. The employer decides whether to offer contributions to this pillar. For some hazardous occupations, such as miners, the third pillar is compulsory. Only private providers offer third-pillar savings, and they also offer several types of funds, similar to the second pillar.

Legislative Leaves / Paid Time Off

Certain short-term leaves (illness leave, funeral leave, study leave, doctor visit leave, and others) are granted and paid in whole or partly by the Social Insurance Agency and/or the employer. Long-term Maternity Leave (or Parental Leave, since this can be taken by the father as well) is also available. This can typically last up to 3 years but can also last longer if the child requires special care.

By law, paid vacation per year is 20 days. For employees older than 33, vacation time is 25 days.

Unemployment Insurance

When unemployed, the respective person can register at the unemployment office. If unemployment insurance contribution was paid for 730 days at least over the past 3 years, they have the right to get financial support for a maximum of 6 months. Contribution is a mandatory part of the taxes paid by the employee and employer based on the salary.

Workplace Canteens or Meal Vouchers

The employer is obliged to arrange for lunch (or another type of meal, depending on the respective operation, such as the 24h/7days shifts) or to offer meal vouchers instead. The employer must bear 55% of the costs at a minimum. Many employers offer more, up to 100%. The minimum value of the vouchers is prescribed by the government. In lieu of vouchers, the respective employer´s contribution can be paid as a supplement to the salary. The employee is entitled to choose the method of payment.

Supplementary Employee Benefits & Perks

Various perks are offered in Slovakia, and the most common and well-received are a company car also for private use, sickness leave days, additional vacation days, group life/accident insurance, a company apartment, and a cafeteria. Rarely offered perks include a company kindergarten, free snacks, and entertainment rooms. This always depends on the employee’s position in the company.

 

This information about mandatory and supplemental employee benefits in Slovakia comes from Asinta’s Central and Eastern European Partner, the GrECo Group.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.

Latvia

Mandatory Employee Benefits in Latvia

Mandatory employee benefits in Latvia include pensions, various legislative leaves, and unemployment benefits. Supplementary employee benefits in Latvia include sickness benefits, as well as maternity and paternity leaves/benefits. Employee perks are not common in the country.

Pension

Latvia has a three-tier pension system, and the second level deserves the most attention because employers must pick their pension fund. Commissions, yield, and risk combinations will matter depending on an employee’s age.

1st tier: State compulsory unfunded pension scheme, all persons making social insurance contributions.

2nd tier: State-funded pension scheme, which will eventually be mandatory for all citizens but currently applies to individuals who were born later than 1971. The participants pick an investment plan appropriate for their age (if you have more than 10 years until your pension, it is worth considering slightly riskier investment plans).

3rd tier: Private voluntary pension scheme, through which every individual can make additional savings for his pension in private pension funds.

The retirement age in Latvia used to be 62 but is now increasing by 3 months until 2025 when it will be 64 and 6 months (for persons with social contributions of at least 15 years).

On January 1, 2024, amendments to the law “On personal income tax” came into force. The conditions contained in the law regarding the inclusion of contributions made to private pension funds in eligible expenses and costs from private pension funds will be able to be applied to Pan-European Private Pension Product Plans (PEPP) as well

Legislated Leaves

Paid annual leave

Every employee is entitled to paid annual leave. This leave may not be shorter than 4 calendar weeks, not including public holidays.

By agreement between the employer and employee, paid annual leave for the current year may be granted in installments. However, one annual leave must be an uninterrupted 2 weeks.

Cash compensation for annual leave is prohibited, except in cases where an employment relationship is terminated and an employee has not used up their paid annual leave.

Procedures for granting paid annual leave

Paid annual leave is granted every year at a set time per an agreement between the employer and employee or by a leave timetable. When granting paid annual leave, the employer must consider the employee’s wishes as much as possible.

Employees may ask for paid annual leave for the first year of employment if the employer has continuously employed them for at least 6 months. The employer is obliged to grant such leave in full.

Additional leave may be granted to employees if:

  • They have three or more children under 16 years of age or a disabled child under 18 years of age. The duration of such additional leave is 3 working days.
  • Their work involves a specific risk; the additional leave may not exceed 3 working days.
  • They care for one or two children up to 14 years of age. In this case, the additional leave may not exceed 1 working day.

The collective agreement or employment contract may stipulate other cases in which additional leave may be granted (for night work, shift work, long-term work, etc.).

An employer may grant unpaid leave at the employee’s request.

Work on public holidays

Employees must not work on official public holidays.

Maternity and childbirth leave

Maternity leave (56 calendar days) and childbirth leave (56 calendar days) are aggregated, and 112 calendar days are granted, irrespective of how many maternity leave days the pregnant woman has taken before the birth.

Leave granted due to pregnancy and childbirth is not counted as part of paid annual leave.

In principle, a woman taking maternity and childbirth leave retains her position. If this is not possible, the employer must provide a similar or equivalent job for the woman with equivalent working conditions and terms of employment.

Paternity leave

The father of a child is entitled to 10 calendar days of leave. Paternity leave may be granted immediately after the child’s birth and no later than 2 months after the birth.

Childcare leave

Every employee has the right to childcare leave for the birth or adoption of a child. Childcare leave lasts 18 months and may be requested at any time until the child reaches age 8.

The period spent by an employee on childcare leave is counted as part of their total work service.

An employee taking childcare leave retains their previous job. If this is not possible, the employer must provide a similar or equivalent job for the employee with equivalent working conditions and terms of employment.

Study leave

Employees studying at any educational institution while continuing to work may be granted paid, or unpaid study leave per the collective agreement or employment contract.

Employees sitting state exams or are writing and defending theses are granted paid study leave of no less than 20 working days per year. Employees receiving lump sum remuneration are given study leave with average income or without it.

Unemployment Insurance

If an employee loses their job, they have the right to claim unemployment benefits. Benefits are granted if they have worked for at least one year and have paid social insurance contributions for at least 12 months during the last 16 months.

Employees can also claim unemployment benefits if they have regained work capacity after a disability or have been caring for a disabled child for up to 18. In these cases, the benefits are granted even if social insurance contributions have not been paid or have been paid for less than 12 months.

Employees can claim unemployment benefits if they have been granted unemployment status by the State Employment Agency (SEA) and have been socially insured for at least 1 year. Also, social insurance contributions must have been paid for at least 12 months during the last 16 months.

If an employee regains work capacity after a disability, they must obtain unemployment status within 1 month of regaining work capacity to claim unemployment benefits. If caring for a disabled child, they must obtain unemployed status within 1 month of the child reaching 18.

If an employee terminates employment relations on their own initiative or is dismissed due to an infringement, unemployment benefits shall be granted and paid not sooner than two months after obtaining unemployed status.

The unemployed are expected to cooperate with the State Employment Agency and carry out the tasks listed in their individual plans.

Amount of unemployment benefits

  • Unemployment benefits are granted for 9 months.
  • The amount depends on an employee’s insurance (employment) history and the wage level from which social insurance contributions have been paid.
  • The average contribution wage is calculated based on the employee’s earnings for the 12-month period, which ended 2 months before claiming unemployment benefits.

Employment history in years (inclusive)

  • 1 to 9 years, 50% of the average contribution wage
  • 10 to 19 years, 55% of the average contribution wage
  • 20 to 29 years, 60% of the average contribution wage
  • 30 years and more, 65% of the average contribution wage

Unemployment benefits are gradually reduced by increments of 3 months.

Period                                      Benefit amount

First 2 months                         100% of granted benefit

Next 3rd-4th month               75% of granted benefit

Next 5th-6th month                50% of granted benefit

Last 2 months                         45% of granted benefit

If an employee was caring for a child (up to 18 years) prior to obtaining unemployed status or regained work capacity after having a disability, the employee’s granted benefits will be 60% of the double amount of the state social insurance benefit in effect on the day when the unemployment benefit is claimed. Currently, this is €76.84 per month for the first 2 months (state social security benefit € 64,03 x 2 x 60% = € 76,84), and according to the algorithm mentioned above, the amount decreases for the next months.

FROM JULY 1, 2023

Persons with a temporary residence permit and living permanently in Latvia during its, and received alternative status (including family members within the meaning of the Asylum Law)  have the right to state social benefits.

 

Supplementary Employee Benefits

Sickness Benefits

Socially insured persons may claim sickness benefits. Benefits are granted if an employee or self-employed person does not show up for work or cannot perform their job and, as a result, loses income due to the following reasons:

  • Loss of work capacity due to illness or injury
  • Receiving essential medical treatment or preventative measures
  • Isolation in quarantine
  • Treatment in a medical institution during the recovery period from illness or injury, if this is required for regaining work capacity
  • Caring for a sick child who is younger than 14 years
  • Prosthetics or orthotics in a hospital

While an employee is sick, they are entitled to receive paid sick days from their employer and sickness benefits from the social insurance system.

They are entitled to sickness benefits if they have paid social insurance contributions for at least 3 months within the last 6 months or at least 6 months within the last 24 months before the month when the insurance case occurred.

Sickness benefits are granted based on a work incapacity electronic form issued by a doctor.

An employer must pay an employee sick pay from the second to the 10th day of the illness.

If an employee is sick for an uninterrupted period, the State Social Insurance Agency grants and pays sickness benefits from the 11th day of the illness until the employee regains work capacity for a maximum of 26 weeks. In severe cases, the benefit payment period can go up to 52 weeks based on a ruling by the State Medical Commission for the Assessment of Health Condition and Working Ability (SMCAHCWA).

If, during the illness period, the employment relationship has terminated, but the period of work incapacity continues, the sickness benefit will be paid for 30 calendar days following the end of the employment relationship.

If an employee’s illness is intermittent, benefits are paid for a maximum of 52 weeks over 3 years.

If an employee is looking after a sick child under 14 years (at home), sickness benefits are granted and paid from the first to the 14th day of the child’s illness. If an employee cares for a sick child in the hospital, sickness benefits are paid until the 21st day.

Amount of sickness benefits

The employer must pay sick pay from the second to the 10th day of the illness period (no payment for the first day). For the second and third day of illness, the amount is not less than 75% of the employee’s average daily earnings, and for the fourth to the 10th day, not less than 80% of the employee’s average earnings.

From the 11th day of illness, the State Social Insurance Agency grants sickness benefits amounting to 80% of the employee’s average earnings from which social insurance contributions have been paid. The average contribution wage is calculated over the 12-month period, which ended 2 months (for self-employed persons 3 months) before the onset of the illness.

Maternity Benefits

Maternity benefits, paid before and after childbirth, can be requested by expectant mothers who are:

  • Employed and receive a salary
  • Self-employed
  • Spouses of a self-employed person and has voluntarily joined the social insurance

During the postnatal period, maternity benefits can also be obtained by the child’s father or another person who takes care of the newborn at home, but no later than the child’s 70th day of life. This applies to cases where:

  • The child’s mother is unable to take care of the baby until the 42nd postnatal day due to sickness
  • The child’s mother has refused to take care of the child
  • The child’s mother has died during childbirth or before the 42nd postnatal day
  • The child is a foundling

The benefit will be paid in two parts – before and after childbirth. The first part is paid for 56 or 70 days of maternity leave. The benefit for 70 calendar days is paid to expectant mothers undergoing medical supervision from their 12th week of pregnancy.

The second part is paid after childbirth for 56 or 70 calendar days. The benefit for 70 days can be obtained if:

  • The mother has had health problems during her pregnancy, childbirth, or postpartum period
  • Two or more babies are born
  • The maximum period for which the maternity benefit can be obtained is 140 days

In the event of a preterm birth, i.e., a birth before the start of the maternity leave, the maternity benefit shall be granted on the same terms, not less than 112 calendar days.

If an employment relationship is terminated due to the winding up of the workplace, the maternity benefit shall be granted if the maternity leave has started no later than 210 days after the termination of the employment relationship.

Benefit Rates

  • The benefit shall be granted in the amount of 80% of the average insurance contributions salary of the applicant.
  • The average insurance contributions salary of an employee is calculated for a period of 12 calendar months ending two months before the month in which the pregnancy leave began.
  • For self-employed women, the average insurance contributions salary shall be calculated in accordance with the average contributions made during the last 12 months ending one quarter (3 months) before the quarter in which the pregnancy leave began.

The amount of parental benefit for working recipients will increase. If one resumes employment while still having the right to receive the parental benefit, the benefit will be increased to 50 percent of the amount of the granted benefit, instead of the current 30 percent. The changes will apply to those parents who are employed and are not on parental leave or are self-employed.

From now on, the parental allowance payment period will be extended by one month, and from this period, each parent will have the individual right to be on paid childcare leave for 2 months, which cannot be transferred to the other parent – this will be the non-transferable part of the parental allowance in accordance with the European Parliament and the Council of 20.20.2019. requirements of the June Directive 2019/1158 on work-life balance for parents and carers. The non-transferable part of the parental benefit will be paid, it can be used flexibly in installments until the child is 8 years old, and both parents can use it simultaneously. The mentioned conditions will apply to those parents whose children will be born starting from January 1, 2023.

Paternity Benefit

Employed fathers of a newborn with social insurance are eligible to take paternity leave for ten calendar days, taken no later than two months after the child is born.

Other stipulations include:

  • The benefit shall be granted in the amount of 80% of the average insurance contributions salary of the applicant.
  • An employee’s average insurance contributions salary for the receipt of the paternity benefit is calculated for 12 calendar months ending two months before the month in which the leave in relation to the child’s birth has begun.
  • For a self-employed person, the average insurance contributions salary shall be calculated for the 12 months ending one quarter before the quarter in which the leave concerning the child’s birth begins.

Related Government Websites

 

This information about mandatory and supplemental employee benefits in Latvia comes from Asinta’s Central and Eastern European Partner, the GrECo Group.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.

Serbia

Mandatory employee benefits in Serbia include retirement (State Pension Plan), healthcare (state scheme), work-related injury, and occupational diseases. Common supplementary employee benefits include private health insurance, group life insurance, and voluntary pension plans.

 

Mandatory Employee Benefits in Serbia

Employers and employees are required to contribute to the country’s social security system which includes pension, disability, health, and unemployment insurance. Employers must also insure employees against work-related injuries, occupational diseases, and work-related diseases and provide compensation for damages.

Old-age pension — age 65 (men) or age 63.5 (women), gradually rising by six months a year until reaching age 63 in 2020 and then by two months a year until reaching age 65 in 2032) with at least 15 years of coverage.

Early pension — age 60 or 59 and 6 months with at least 40 years of coverage. The old-age pension is payable abroad under a reciprocal agreement.

Disability pension — must be younger than the normal retirement age, be assessed as incapable of all work (total disability), and have one year of coverage if younger than age 20 when the disability began; two years if aged 20 to 24; three years if aged 25 to 29; and at least five years if aged 30 or older.

Disability pensions – are calculated by the number of contribution years, the ratio of the individual’s gross earnings to the national average annual wage in each year of contributions, and the value of the general point.

Survivor pension — received if the deceased was a pensioner or had at least five years of coverage.

Survivor pension — 70% of the old-age pension the deceased received (or was entitled to receive) is paid for one survivor (140% for an orphan); 80% for two survivors (160% for full orphans); 90% for three survivors (180% for full orphans); or 100% for four or more survivors (200% for full orphans). The pension is split equally among all eligible survivors.

Supplementary Employee Benefits 

Private Medical Insurance – The most valued benefit by employees. Managed care schemes are the most common. Employees access the carrier’s network with their insurance ID card.

Life Insurance – Typically, group life insurance schemes include lump sum benefits in the case of death due to natural causes.

Pension Plans – Supplemental pension plans are not common in Serbia. If one is offered, the plan is a defined contribution scheme funded through an insurance contract.

Personal Accident – Provides death and disability coverage due to professional or extra-professional accidents. Additional coverage for daily compensations, bone breakages, etc., can be added.

 

Related government websites

 

This information about mandatory and supplemental employee benefits in Serbia comes from Asinta’s Central and Eastern European Partner, the GrECo Group.

Kazakhstan

Mandatory employee benefits in Kazakhstan include pension, PTO, and employment insurance. Supplementary employee benefits include medical insurance, virtual care, and voluntary benefits.

 

Mandatory Employee Benefits in Kazakhstan

Pension

Citizens of the Republic of Kazakhstan, foreigners, and stateless persons permanently residing in the territory of the Republic of Kazakhstan have the right to pension payments unless otherwise provided by laws and international treaties.

Per Article 28 of the Constitution of the Republic of Kazakhstan, a citizen is guaranteed a minimum wage and pension, social security by age, in case of illness, disability, loss of a breadwinner, and other legal grounds.

Kazakhstan has a multi-level pension system consisting of basic, mandatory, and voluntary levels.

The first level (basic) – is the state basic pension payment (the republican budget)

At the basic level, a state basic pension benefit is provided, which is granted to citizens (and persons permanently residing in the republic’s territory) when retirement age is reached. It is carried out regardless of whether solidarity is received and/or a funded pension is received.

More than 2.276 million people receive the state basic pension benefit.

On July 1, 2018, the methodology of pension granting was changed, and the new mechanism for granting a basic pension is as follows:

  • Its size, with the participation in the pension system of 10 years or less, or its absence, will equal 54% of the subsistence level (SL).
  • For each year worked over 10 years, the basic pension increases by 2%. For example, the experience of 20 years – the basic pension of 74% of the PM worked 30 years – the basic pension – of 94% of the PM, with an experience of 33 or more years, the basic pension will amount to 100% of the PM.

At the same time, the length of participation in the pension system includes the following:

  • Work experience worked out before January 1, 1998.
  • Accumulative experience (experience of payment of pension contributions) after January 1, 1998.
    • Other socially significant periods include caring for a child under 3 years – (within 12 years),  periods of care for a disabled person of the first group, a disabled person from childhood till 16 years, a single disabled person of the second group, and old-age pensioner who needs outside help, as well as for people 80+, and disabled from childhood to 18 years, the residence time for spouses of military personnel, employees of special agencies, and diplomatic workers), etc (not more than 10 years in total).

The second level (mandatory) – This is a pension from the solidarity system (the republican budget) and the Unified Accumulative Pension Fund, which requires mandatory pension contributions and mandatory professional pension contributions.

Transitioning to a funded pension system that provides for mandatory pension contributions by all employees, each employer is obliged to carry out a regular transfer of OPV – 10% of the employee’s monthly income (not more than 75 times the minimum wage) to the employee’s retirement account opened in the UAPF.

Per Article 31 of the Law, persons who have pension savings in the UAPF have the right to pension payments:

1) When reaching the retirement age – 60 years for women/63 years for men.

2) If pension accumulations are sufficient to ensure payment not less than the minimum pension, men at 55 and women – at 52 years 6 months by concluding a pension annuity contract.

3) Disabled persons of the first and second groups if the disability is established indefinitely.

4) Foreigners and stateless persons who have left the country for permanent residence outside the Republic of Kazakhstan and who have submitted documents confirming the fact of departure.

The third level (voluntary) – Payments from voluntary pension contributions

A voluntary pension contribution is money employees contribute to the UAPF and (or) a voluntary accumulative pension fund for themselves or third parties. Their rate and payment period are determined by the contract on pension provision at the expense of voluntary pension contributions.

Contributors of voluntary pension contributions are natural or legal persons who make voluntary pension contributions at their own expense.

Paid Time Off

Per Article 99 of the Labor Code, pregnant women, women who gave birth to a child/children, and women and men who adopted a newborn child/children are granted the following leave in connection with the birth of a child:

  1. Maternity leave
  2. Leave to employees who adopted a newborn child/children
  3. Leave without pay for childcare until he reaches the age of 3 years

Maternity leave is 126 calendar days (70 days before birth and 56 days after birth). In case of complicated births or the birth of two or more children, 70 days are given. The number of annual leave days does not depend on the duration of the work, so it does not matter how long you worked for the employer.

In addition to maternity leave, optional leave without pay for childcare can be granted for up to 3 years. According to Article 99 of the Code, such leave can be received by the father or mother of the child, and if the child is left without parental care, then by the next of kin, i.e., who will be involved in the child’s upbringing.

For non-working women For working women
Types of payments and allowances
One-time state benefits for the birth of a child
One-time social payment for cases of loss of income due to pregnancy and childbirth, adoption of a newborn child (children)
Monthly social allowance for child care upon reaching one year Monthly social benefit in case of loss of income in connection with childcare upon reaching the age of one year

Working women participating in the compulsory social insurance system are entitled to social benefits (for whom the employer pays social contributions).

Calculating a lump sum payment for parental leave – This social benefit is only for working women. The amount is determined by social deductions for the last 12 months before the onset of social risk, regardless of the worked period. The payment amount can be found by multiplying the average monthly income for the last 12 months from which social contributions have been paid by the corresponding number of days of incapacity for work and subtracting 10% for pension contributions.

To calculate the payment amount, divide the total income for the last 2 years (as evidenced by social contributions) by 24 months, then multiply by 0.4 and subtract 10% of the pension contributions.

Employment Insurance

This is a monthly insurance payment due to the employee as compensation for damage related to loss of earnings (income) by the employee in connection with the degree of loss of occupational capacity from 30% to 100% inclusively shall be carried out by the insurer.

Average monthly earnings (income) considered for lost earnings (income subject to compensation) shall not exceed 10x minimum earnings. This calculation is established for the relevant financial year by law for the compulsory accident insurance’s conclusion date.

Compulsory pension contributions shall be held and transferred from the insurance payments made by the insurer as compensation for damage related to loss of earnings (income) to the unified retirement savings fund.

The total amount of insurance payments for the compensation of additional expenses caused by injury to health shall not exceed the following amounts (in the monthly calculation indices, established on the relevant financial year by the law on the republican budget):

1) Upon establishment of the degree of loss of occupational capacity from 30%-59% inclusively – 500

2) Upon establishment of the degree of loss of occupational capacity from 60%-89% inclusively – 750

3) Upon establishment of the degree of loss of occupational capacity from 90%-100%  inclusively – 1000.

 

Supplementary Employee Benefits

Voluntary Benefits

Larger employers will often provide employees with a range of ‘voluntary benefits’ at discounted prices through the employer, including personal accident insurance, critical illness, and coverage for COVID-19.

Gymnasiums

Some employers can provide ‘gym on-site’ facilities, whereas smaller employers may offer gym subsidies or access to a gym with lower corporate rates. Many employers subsidize this benefit through wellness accounts that provide flexibility for employees with wellness needs outside the standard gym membership options.

Virtual Care

This lets employees reach nutritionists, naturopaths, and mental health specialists for free through the health insurance policy. An online doctor visit may have a per-appointment charge attached. Some services include prescriptions and delivery through an app.

Mental Health Training

Leadership training on mental health, anti-stigma campaigns, mindfulness, and stress reduction programs are becoming common.

 

Government Websites

 

This information about mandatory and supplemental employee benefits in Kazakhstan comes from Asinta’s Central and Eastern European Partner, the GrECo Group.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.

Georgia

Mandatory employee benefits in Georgia include a pension savings scheme and mandatory personal accident insurance.

 

Mandatory Employee Benefits in Georgia

Pension Savings Scheme

The reform applies to citizens of Georgia who are employed or self-employed and receive income from employment or self-employment. Except for non-resident natural persons, it also applies to foreign citizens and stateless persons permanently residing in Georgia. It is mandatory for all citizens except non-residents who have not attained the age of 40 as of August 6, 2018.

Participation in the pension scheme is voluntary for:

  1. All self-employed persons, regardless of age
  2. All employed persons who were 40 years of age or older as of August 6, 2018

As of January 1, 2019, all Georgian citizens employed in Georgia and foreign citizens permanently residing in Georgia, who, as of August 6, 2018, had not yet reached the age of 55 in the case of women) and age of 60 (in case of men), will automatically join the pension scheme. Georgian citizens employed in Georgia, foreign citizens permanently residing in Georgia, or self-employed persons who are not subject to automatic membership shall have the right, but not an obligation, to join the pension scheme voluntarily through registering in the electronic system of administration of pension contributions of the Agency (www.pensions.ge).

Employed people who, as of August 6, 2018, reached the age of 40 or older became entitled to withdraw from the pension scheme by applying to the Pension Agency as of April 1, 2019, or after 3 months from the date when the employer made a pension contribution to the employee’s account, whichever date is earlier. In such cases, pension contributions shall be fully reimbursed to them, their employer, and the state.

Rejoining the pension scheme is possible by applying through the employer.

Employees’ pension contributions are financed in the following manner:

  1. The employer pays 2% of taxable wages on behalf of each employee participant through an electronic system into the employee’s individual pension account.
  2. Self-employed participants pay 4% of their annual income.
  3. The State pays 2% of an employee’s taxable wage or income for the self-employed earning under 24,000 Lari. The benefit is paid as annual wages and/or received as income by self-employed people. For those making 24,000 to 60,000 Lari annually, the State contributes 1% of a person’s taxable wage. The State does not contribute to those earning over 60,000 Lari annually.

For this purpose, the law established an independent legal entity called the Pension Agency, which is responsible for implementing, managing, and administrating the funded pension scheme. It is organized in such a way as to ensure the safety of participants’ pension assets and long-term investment returns.

Employees’ Mandatory Personal Accident Insurance

Since 2019, by the decision of the Government of Georgia, insurance has become mandatory for employers to provide compulsory accident insurance for employees performing hazardous work.

The purchase of compulsory insurance has become mandatory for all legal entities, including self-employed persons who were granted the status of high-risk work performers, according to the Government Resolution of July 27, 2018.

Financing of Healthcare

In 2013, the Georgian government launched the ‘State Universal Health Care Program,’ a minimum service package for all citizens without state or private insurance. Yet out-of-pocket expenditure remains a barrier to accessing health services. The Georgian Healthcare System State Concept 2014-2020 is a national health plan that heavily emphasizes health in all policies. The UHC Partnership will support the review and operationalization of the primary care strategy 2016-2023, as well as build capacity around strategic purchasing to enhance efficiency in the organization and delivery of publicly financed health services.

Citizens whose income exceeds 40,000 GEL per year and citizens with private insurance can’t be participants in the Universal Health Care Program. The exception is oncological treatment and surgery, which is covered for all citizens of Georgia, regardless of their income.

Also, some large or international companies provide employees with private insurance.

 

Related Government Website

Ministry of Labour, Health, and Social Affairs

 

This information about mandatory and supplemental employee benefits in Georgia comes from Asinta’s Central and Eastern European Partner, the GrECo Group.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.

Romania

Mandatory Employee Benefits in Romania

Pension

For the time being, there are three pension schemes in place in Romania:

  1. Pillar 1 = mandatory contributions to the Public Pensions System (20.25% for employees, as of 1/1/24). For normal working conditions, the employer contribution is 0%. The employer would be required to contribute 4% or 8% for difficult working conditions, depending on the conditions.
  2. Pillar 2 = mandatory contribution to Private Pension Funds (4.75% for Employees, as of Jan 1st,2024)
  3. Pillar 3 = concerns the contribution to Voluntary Private Pension Funds. Contribution is optional (more details under supplementary employee benefits below).

Pillar 1 and 2 pension contributions are paid by employers to the state. Romanian citizens do not usually contribute directly. Instead, employers deduct these contributions from salary and pay them monthly. Income tax is calculated after deducting social contributions from gross salary.

Pension income can start as early as age 60. Individuals who have completed a minimum contribution period of at least 15 years are eligible for pension benefits. The complete period is 35 years for men and women.

The normal retirement age is 65 for men and 62 for women.

For Pillar 1 pensions, the current pension point value is RON 2.032. The benefit results from multiplying the average lifetime-accumulated number of pension points (average rating) by the pension point value.

The Pillar 2 private fund option belongs to the employee, and the employer still makes the payment. Participation in the Pillar 2 pension is compulsory for all employees below age 35 who are insured for the first time or are contributing to the public fund. It is optional for employees up to age 45 to contribute to the public retirement fund.

Death and long-term disability benefits apply as part of social security for all contributing employees. In the case of death, the benefit is payable to the surviving spouse, tutor, or child. The contribution is in the retirement contribution.

Public System Healthcare

According to Law 95/2006, all citizens with residence in Romania and all foreign citizens and stateless persons with residence in Romania must participate in and contribute to the public health system.  Exceptions apply for the following:

  • Children under age 18 and persons under age 26 attending school and do not have income from work
  • Disabled people without employment income
  • People persecuted by the former communist regime, deported persons, war veterans, and also those who have special rights established by law
  • Retired insured persons who have revenues under the income tax limit
  • Pregnant women and women after childbirth who do not have income from work or have an income lower than the minimum gross national salary
  • Members of a family entitled to social help
  • Individuals receiving unemployment indemnity
  • Individuals on medical leave for temporary disability due to a work accident or a professional disease
  • Parents on leave, raising a child to age 2 or age 3 for children with a handicap

All insured individuals have rights to ambulatory medical services, hospital care, intensive care, dental services, urgent medical services, prescription drugs, preventative, rehabilitation, prenatal and postnatal assistance, treatment in balneary resorts, plastic and reparatory surgery, and physiotherapy services.

Husbands, wives, and parents without income who are in the care of the insured person are eligible to be added as dependents.

The contribution is 10% of the gross salary for employees.

Paid Time Off

  • Annual Leave – 20 days is the minimum holiday guaranteed by law per year, pro-rated with the worked period.
  • Public Holidays – there are 15 public holidays.

Sick Days/ Short-Term Disability Benefit

Sick leave is only paid if the employee has a minimum contributory period to the Health House for the prior six months, based on a medical certificate issued by a physician.

The employer pays for the first 5 calendar days. From the 6th day, the National Health Fund supports the medical allowance. In practice, the employer also pays the amount supported by the National Health Fund and then requests reimbursement from the Health House.

The payment percentage in case of the sick leave allowance ranges between 75% and 100% of the calculation base (average of the employee’s monthly gross wages during the last 6 months before the month the medical leave is granted).

The benefit is payable up to 180 days; if the disability is prolonged, a long-term disability pension is proposed.

The contribution to social security is 2.25% of gross salary, with no ceiling.

Maternity Leave

Maternity leave is 126 calendar days (usually 63 days before + 63 days after the child’s birth). It represents 85% of the calculation base (the average of the employee’s monthly gross wages during her last 6 months before the month the maternity leave started). The maternity leave is granted based on the medical certificate issued by the physician.

Insured individuals can also take medical leave days each year as follows:

  • 45 days to care for their sick children up to age 7 or disabled children up to age 18.
  • Up to 90 days to care for children with contagious diseases or paralysis.

The National Health Fund grants the maternity allowance (in practice, the employer pays the maternity leave, and afterward, he requests reimbursement from the Health House).

Paternity Leave

Fathers are entitled to 10 days of paid paternity leave which can be used until the child reaches the age of 8 weeks. If the father chooses to participate in childcare courses, leave can be extended for 5 days for each child.

Parental Leave

Parental leave entitlement last until the child is 2 years old. In the case of a disabled child, leave is until the child is 3 years of age. The state institution makes the payment directly and represents 85% of the employee’s average revenues during his last 12 months of activity. During this period, the employment contract is suspended.

During this period, the company can hire another employee for the same position, but only on a temporary contract, and cannot terminate the parent employee.

Other Leaves

  • Bereavement Leave­ – 2 days of unpaid leave are granted to an employee who has had a death within their immediate family.
  • Marriage leaves – 5 days for an employee’s marriage and 2 days for the marriage of a child.
  • Blood donation leave — 1 day of paid leave is granted.
  • Caregiver’s leave – 5 working days within a calendar year to provide personal care or support to a relative or a person living in the same household as the employee who needs significant care or support due to a serious medical condition. This leave is granted in addition to the classic care leave (sick childcare and adult cancer care leave – the latter being recently introduced).
  • The right to be absent from work in case of family emergencies for a maximum of 10 working days/year, subject to prior notification to the employer and with the recovery of the period of absence. The employer and the employee establish by mutual agreement how to recover the absence period.

Workers’ Compensation/Work Accidents/Professional Diseases

In Romania, the state still handles the whole system through funds collected monthly from employers and employees. According to Law 346 / 2002, the Public System grants the following compensations in case of work accidents and/or professional diseases:

  • Indemnity for temporary or permanent disability
  • Death following a work accident
  • Indemnity for loss of body integrity
  • Indemnity for a temporary change of the current job due to work accidents/ professional disease

Facultative insurance products are available in addition to the benefits offered by the state system for personal accidents and professional diseases.

No workmen’s compensation facultative insurance product is in place due to the lack of legislation in this field.

Premium related to Personal Accidents Insurance is not tax-free from a fiscal point of view. Still, the indemnities received following personal accident claims are tax-free and independent from any other compensation given by the state.

Child Allowance

Parents have a right to a child allowance, payable until age 18. If a child is disabled or continues to attend school in a state-recognized education program, benefits can be payable to age 26. The state child allowance is not taxable. Its monthly value as of Feb 1st, 2022, is:

  • RON 291 for children ages 2 to 18
  • RON 718 for each child up to age 2 (or up to age 18, if disabled).

State budget allocations fund these child allowances.

 

Supplementary Employee Benefits in Romania

Pension

Pillar 3 concerns the contribution to Voluntary Private Pension Funds. Contribution is optional (minimum €10/person/month, maximum 15% of gross). The plan is defined contribution (DC).

Once the contribution plan is set up with the pension fund, with the employer, the pension fund opens a personal account for every employee so that the individual can have full access to their net asset balance and the evolution of its funds over the years. As soon as the enrollment is done, the financial flow runs automatically, and the monthly contributions are accumulated into the employee’s personal account.

For private pension plans, which are still not widely implemented, the contributions are split between the employee and the company, with the company usually paying 50% to 100% of the contribution.

The right to voluntary pension opens at the request of the participant, subject to the following cumulative conditions:

  • The participant has reached the age of 60.
  • At least 90 monthly contributions have been paid.
  • The personal asset is at least equal to the amount required to obtain the minimum voluntary pension provided by the rules adopted by the commission.

As of 2020, there are 10 pension funds available on the local market applicable for Pillar 3 pensions. The plan structure is strictly regulated by law.

For Pillar 3 Pensions, the contribution is considered tax-free for the employer up to the limit of €400 per year/ per person and for the employee up to the limit of €400 per year/per person.

Private Medical Insurance

This is highly recommended and is one of the most popular benefits for employees, mainly due to the inadequacy of the public system. Employers usually cover all employees and have the option to extend to family members (spouse/children; for larger groups, they can also be extended for partners or parents/siblings). The employee usually funds family extensions, with exceptions in highly competitive industries such as IT.

This coverage can include outpatient coverage (consults with GP or specialists, lab tests or investigations, high tech imaging), inpatient coverage (room & board, medication/treatment during stay in hospital, surgery + consumables and accessories used in the surgery room), road ambulance/emergency room, medical recovery, maternity (pregnancy monitoring, birth), dental, vision, cancer, and critical illness extensions.

Direct subscription to clinics is also a popular complementary or even alternate option to a medical insurance plan, with more focus on prevention services, but usually without access to hospitalization or surgical interventions. By comparison, medical insurance usually offers more comprehensive coverage, such as complex investigations, hospitalization, and birth. Additionally, medical insurance offers access to any private medical facility in Romania with direct settlement or reimbursement for out-of-network services.

The contribution for medical insurance is considered tax-free for the employer up to the limit of €400 per year per person and the employee up to the limit of €400 per year per person.

Business Travel Insurance

The employer usually funds this insurance only for employee business travel. Coverage usually includes medical expenses incurred during trips abroad following accidents, sudden illness and emergencies, and dental care subject to certain sub-limits (emergency). Coverage also extends to additional costs with relatives who assist the victim, repatriation, luggage insurance, and personal liability.

Group Life and Disability Insurance

This is usually fully funded by the employer for all employees. The primary coverage available is death by any cause (illness, accidents), and it is customary to cover 1-2x annual salary or a lump sum insured for the entire group.

Customary riders:

  • Permanent total or partial disability (illness, accidents) – customary to cover % of the same sum insured as death coverage.

Other available riders:

  • Indemnity for critical illness
  • Daily cash benefit for temporary disability (days of hospitalization and/or ambulatory plus days of
  • convalescence)
  • Daily cash benefits for medical expenses up to different sub-limits
  • Indemnity for surgical intervention expenses up to different sub-limits
  • Indemnity for broken bones (following accidents)
  • Indemnity for burns (following accidents)

The insurance premium bears the tax on income and social contribution as on any other type of employee benefit. Insurance indemnities are tax-free.

 

Employee Perks in Romania

Other benefits available for employees can include the following:

  • Meal vouchers
  • Gift vouchers (for Christmas, Easter, Mother’s Day, and Children’s Day)
  • Performance bonus, holiday bonus
  • Gym membership
  • Work-from-home or Flexible hours programs
  • Transportation benefits – company bus, public transport allowances, bike allowances, fuel allowance, parking space, etc.
  • Workplace canteens
  • Professional training and certification programs, participation in conferences and seminars
  • Company car – typically for sales positions, management positions, executives
  • Mobile phones and calls are covered fully by the employer
  • Company laptop
  • Increased annual leave days
  • Discounts on company products, if applicable

Less common perks include:

  • Flex benefits
  • Relocation allowances, rent – usually top management only
  • Savings plan or financial wellness
  • Employee loans
  • On-site daycare
  • On-site wellness programs
  • Health coaching
  • Personal development training and coaching
  • On-site or online books and libraries
  • On-site relaxation or game areas

 

This information about mandatory and supplemental employee benefits in Romania comes from Asinta’s Central and Eastern European Partner, the GrECo Group.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.

Estonia

Mandatory employee benefits in Estonia include a three-pillar pension system, legislative leaves, employment insurance, and dental care. Common supplementary employee benefits in Estonia include health insurance, voluntary benefits, and gym memberships. Common employee perks include additional vacation days and company cars.

 

Mandatory Employee Benefits in Estonia

Pension

Pension is a regular payment made in case of old age, incapacity for work, or loss of provider. The aim of the Estonian pension system is to help people maintain their standard of living and monthly income when they retire. The Estonian pension system stands on three pillars:

I pillar: State pension

II pillar: Mandatory funded pension

III pillar: Supplementary funded pension

I Pillar: State Pension

As the name says, the state pension is a pension paid by the state, the aim of which is to ensure regular monthly income for persons who have reached retirement age, have become incapable of work, or have lost their provider.

There are several different types of state pensions: old-age pension, pension for incapacity for work, survivor’s pension, national pension, and superannuated pension.

The first pillar is the state old-age pension, which is paid to a person who has reached the pensionable age and whose length of employment is at least 15 years.

The general pensionable age in Estonia is 63. The pensionable age for women was gradually increased to 63 by the year 2016. By the year 2026, the general pensionable age in Estonia will be 65.

The state pension is based on the principle of solidarity, which means that the pensions to today’s pensioners are paid from the taxes of people who are currently working. The state pension is paid by the state from the funds collected to the state budget from the social tax. The direct payer of the social tax is the employer, who withholds 33% of social tax from the salary of the employee, which the state then pays for health insurance and pensions.

II Pillar: Mandatory Funded Pension

The aim of the second pillar is to direct a part of the salary of the people who are working towards their personal pension so that people would have, in addition to the constantly financed state pension, an additional pension that they accrue themselves.

In the case of the mandatory funded pension, an employee pays 2% of their gross salary monthly to the pension fund they have selected, and the state adds 4% from the current social tax that the employee pays.

The money paid into the pension funds is managed by the fund management companies, which invest the pension contributions paid by the employees into different assets with the aim of increasing the value of the money contributed by the employees over the years.

  • Subscribing to the funded pension is mandatory for persons who were born in 1983 and later.

In the case of the mandatory funded pension, when a person reaches retirement age (as a general rule), a contract has to be concluded with an insurance company. The insurance company undertakes the obligation to pay the person a pension, the sum of which depends on the volume of the assets accrued into the pension fund until the death of the person.

III Pillar: Supplementary Funded Pension

The third pillar, or the supplementary funded pension, was established with the aim of providing people with an opportunity to insure their retirement years even better.

There are two options for subscribing to the supplementary funded pension:

  • conclude a pension insurance contract with a life insurance company or
  • make contributions to the voluntary pension fund.

There are also two options for receiving payments:

  • Payments on the basis of the insurance contract or
  • Payments from the voluntary pension fund.

The sums of the contributions made to the supplementary funded pension can be determined by the person, and the amount of the contributions can be changed at any time. If the contributions to the supplementary funded pension are less than €6,000 or 15% of the gross income per year, no income tax is charged on the contributions.

Legislated Leaves

The duration of the annual vacation is 28 days; an extended vacation is granted in case of some professions, such as state officials and local government officials, teachers, academic, pedagogical, and scientific staff, and others. National holidays and public holidays are not included in the vacation duration calculations. An employee may be granted unpaid leave at his or her request for a period of time established by agreement of the parties.

  • Maternity leave – A woman has the right to maternity leave of 100 calendar days, which becomes collectible at least 70 calendar days before the estimated date of birth. If a woman starts using maternity leave less than 70 days before the estimated date of birth, the maternity leave is shortened by the respective period. This means that the length of maternity leave will depend on when the mother goes on maternity leave. The maternity benefit is paid by the state.
  • Parental leave – A mother or a father may be granted parental leave at her or his request to raise a child up to 3 years of age. The parental benefit is paid by the state. Together, the maternity benefit and the parental benefit are paid for a period of 475 days.
  • Sickness – in case of sickness, the employee can be given up to 182 calendar days of paid sick leave (max 250 days per year). The gross wage during this period is 70% of his or her last year’s average salary. The employer pays the wage from the 4th to the 8th day of sickness, and the state starting the 9th day. Many higher percentile employers pay the sickness benefit starting from the 1st or second day of sickness.

Unemployment Insurance

Unemployment insurance is a compulsory insurance that is collected to pay benefits to employees in the event of unemployment. All employees pay 1.6% of their gross earnings, and employers pay 0.8% of the payroll for unemployment insurance. Unemployment insurance is withheld from the employee’s salary automatically. Persons who are old enough to receive an old-age pension do not have to pay unemployment insurance.

Unemployment insurance benefits are paid to legal residents of the EU. To receive an unemployment insurance benefit, unemployment insurance contributions must have been paid for at least 12 months of the previous 36 months.

A legal resident of the EU has the right to apply for unemployment insurance benefits from the country where he or she last worked and paid taxes. The time that a person has worked and paid unemployment insurance contributions in other EU countries is considered when deciding whether and how long he or she is entitled to receive the unemployment insurance benefit. The sum of the benefits paid by Estonia is calculated based on the wages earned in Estonia.

If a person does not meet the conditions to receive an unemployment insurance benefit, or if the person has exhausted their rights to a benefit, he/she may still qualify for the state unemployment allowance.

The unemployment allowance is paid to unemployed persons who:

  • Do not qualify for the unemployment insurance benefit
  • Actively look for work
  • Have worked or finished full-time studies
  • Have an income that is less than the allowance

The unemployment allowance €11.70 per day in 2024) is paid for a maximum period of 270 days.

Dental Care

Dental care is free for children under 19. However, free dental care is provided only by doctors who have concluded the contract for financing medical treatment with the Health Insurance Fund.

The Health Insurance Fund will reimburse dental care to adults with health insurance up to €60 per year. The patients themselves pay at least 50% of the price of the services.

All insured women who are pregnant or mothers of children under one year of age are eligible for dental care benefits of up to 105 euros per year, with the patient paying at least 12.5% of the treatment invoice.

Unemployed persons registered with the Unemployment Insurance Fund receive dental care benefits at an increased rate. The benefit is €105 per year, with the patient paying at least 12.5% of the treatment invoice.

Persons who have received subsistence allowance under the Social Welfare Act during the two calendar months preceding the month in which the service was received are eligible for the dental care benefit at the increased rate. The benefit is €105 per year, with the patient paying at least 12.5% of the treatment invoice.

Old-age pensioners and persons receiving pension for incapacity for work, people with partial or no capacity for work, and the elderly over the age of 63 are entitled to dental care benefits of €105 per year, with the patient paying at least 12.5% of the invoice.

Find more information here

 

Supplementary Employee Benefits

Healthcare

In Estonia, there are two types of healthcare systems: public and private. The public one is provided by the Estonian Health Insurance Fund (EHIF; Haigekassa in Estonian), which a person receives if they have an employment contract in Estonia and their employer is paying social taxes for them. The private one is different insurers offering private insurance for healthcare.

The Estonian health insurance system is a solidarity-based social insurance system. This means it provides healthcare for everyone. It is a solid healthcare system, and treatment is equally available in all regions.

Check out the materials made by the Estonian Health Insurance Fund and the Health Board for more details.

Voluntary Benefits

People not belonging to a group plan can sign a voluntary insurance contract with the Health Insurance Fund and pay the premium. Two conditions must be met to enter into a contract with the Health Insurance Fund.

The person must be a permanent resident of Estonia or a person residing in Estonia on the basis of a temporary residence permit or the right of residence. They must also have been insured for at least 12 months over a two-year period prior to signing the contract through:

  • An employer
  • State
  • As a pupil or a student
  • As a sole proprietor or their spouse participating in their activities
  • As a notary, a sworn translator, or a bailiff registered with the Tax and Customs Board

The said insured persons may sign a voluntary insurance contract also to insure their dependents. A dependent must be a permanent resident of Estonia or a person residing in Estonia with a temporary residence permit or the right of residence.

The persons qualifying for the signature of the contract are those, who have paid social tax or for whom social tax has been paid during the preceding calendar year. Social tax must have been paid at least twelve times and calculated based on a minimum monthly rate of social tax. In 2024, the monthly rate on which the minimum social tax liability is based is €726, i.e. the minimum social tax liability for the employer is €239.25 euros per month.

Persons receiving a pension from a foreign country also qualify for the contract’s signature unless otherwise provided for by international agreements.

Gymnasiums

Very large employers can provide on-site facilities, whereas smaller employers may offer gym subsidies or access to a gym with lower corporate rates. Supporting employees’ health has always been popular. Perks can range from small things such as fruit in the office, but a large proportion of employers also pay for gym memberships and support employees who want to compete in athletic events such as marathons.

Workplace Canteens

This benefit is not common in Estonia; however, in highly competitive industries such as the technology industry, we are seeing an increase in catered lunches for employees. Large employers often have an on-site cafeteria with discounted food prices.

 

Employee Perks

There are not many perks Estonian employers offer. Western and financial/technical companies are usually more generous. More traditional and local companies generally understand that ‘salary is your benefit.’ The following perks some employers offer:

  • Additional vacation days – The Typical holiday allowance is 28 days of paid holiday (mandatory by law). In the public sector, it’s typically 30-35 days. Any extra days would be considered a perk. Many companies offer extra days in the form of collective holidays when all the staff is away from the office and business is virtually closed down, such as during Christmas and summers.
  • Company cars – These are typically offered to salespeople, and senior executives are offered for business and private use, but this is taxed. Employers also reimburse employees for the use of personal cars, and the reimbursement runs about €0.30 per kilometer (tax-free) but not more than €335 per month. If the reimbursement is more than €335, the overpaid part is taxed.
  • Gym memberships – Supporting employees’ health has always been popular. Perks can range from small things such as fruit in the office, but a large proportion of employers also pay for gym memberships and support employees who want to compete in athletic events such as marathons.
  • Health insurance – This is now offered by 7 insurers, and €400 per year per employee is not taxed by fringe benefits tax; it has become very popular in the market– There was a total of 1336 insurance contracts in the market in 2023, which is 10 times the number it was in 2019 (157). 8% of the total workforce had supplemental health insurance coverage. Health insurance usually covers in- and outpatient treatments, prophylactic checks, vision, and dental care. Massage and/or rehabilitation limits are also available, as well as some other extras.
  • Telecommuting – It’s very popular to let employees work from home, especially employees who use a phone and laptop for their work.
  • Personal Accident Insurance – This perk is getting more popular from our point of view. It usually covers death, disability, and traumas. It’s an inexpensive product to buy.

 

Related Government Websites

 

This information about mandatory and supplemental employee benefits in Estonia comes from Asinta’s Central and Eastern European Partner, the GrECo Group.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.

Armenia

Employee Benefits in Armenia

Employee benefits in Armenia include pension, paid time off, and employment insurance, which includes personal accident, healthcare, and travel insurance. Personal employment insurance is not mandatory in the country; it is optional. Employee perks are not common in the country.

Pension

In 2010, the government in Yerevan passed a law introducing a mandatory funded pension pillar for all those born after 1974. However, when the law took effect in January 2014, critics from the opposition parties challenged it in the Constitutional Court, arguing that people should be able to decide for themselves what happens to their savings.

As of July 1, 2014, mandatory contributions to pension funds were applicable for both Armenian and foreign citizens who were born after January 1, 1974 (inclusive). However, employees were allowed to refuse the payment of social contributions until July 1, 2018, by submitting an appropriate application before December 25, 2014. Yet, the employees working in the public sector and employees who were not employed as of July 1, 2014, may not refuse to pay social payments.

From July 1, 2018, all employees, notaries, and individual entrepreneurs born after January 1, 1974, started to make funded pension contributions mandatory.

The maximum threshold for calculating the pension contribution is AMD 1,125,000 now—15 times the minimum monthly salary of AMD 75,000 (as of January 1, 2023, the minimum monthly salary increased from AMD 68,000 to AMD 75,000).

From January 1, 2023, the pension contribution payment is calculated as follows:

  • 5% of the monthly gross salary if it is less than AMD 500,000.
  • 10% of the monthly gross salary (but not more than the maximum threshold) minus AMD 25,000 if the monthly gross salary is more than AMD 500,000 (capped at AMD 87,500).

The main objective of the fund is to provide participants with a funded pension by securing the long-term asset growth of the fund. It has three components:

  • State pension
  • Mandatory funded pension
  • Voluntary funded pension

The State Pension System of the Republic of Armenia has two components:

  • Social pension
  • Employment pension

The social pension is a defined pension rate that is not based on the payments made. It is funded from the State budget, and its main issue is to provide pensioners who have no required eligible years of service with the minimum income.

Employment Pension (the first level of the multi-pillar pension system) is the old-age pension, based on the payments made. However, the amount of this pension type is not conditioned by the payments the person has made during employment years, but by the number of seniority years.

There are two asset managers participating in the system:

  • C-Quadrat Ampega Asset Management Armenia, a subsidiary of C-Quadrat Investment in Austria
  • Talanx Asset Management in Germany (Amundi-Acba Asset Management)

Participants are free to choose the manager of their pension assets and the management policy of such assets.

Funded pensions may be paid in the following forms:

1)  Annuities

2)  Programmed withdrawals and/or

3)  Lump sum

Paid Time Off

Maternity / Paternity Pay – Maternity Benefit

Benefits are payable only to the biological mother for a maximum of 3 months.

For the working mother (including self-employed) 140 days for regular labor, with 70 days before the expected birth date and 70 days afterward. 155 days for complicated labor, with 70 days before the expected birth date and 85 days afterward. 180 days for multiple child deliveries (twins+), with 70 days before the expected birth date and 110 days afterward. Parents who have adopted a child will be granted leave until he/she is 70 days old. 

Employment Insurance

There is no mandatory personal employment insurance, only optional. However, most employers grant employees medical insurance. Travel and personal insurance are also available on an optional basis. The main coverages are:

Personal Accident

  • Bodily Injury
  • Medical expenses
  • Sudden acute poisoning
  • Disability (permanent or temporary)
  • Death
  • Critical illness insurance

Medical

  • Annual medical treatment and consultation
  • Pregnancy, birth care
  • Cardiology
  • Chronic diseases
  • Dentistry
  • Ophthalmology
  • Other services

Travel

  • Medical expenses, including transportation
  • Legal Advice
  • Amateur sport injuries
  • Loss or damage of baggage
  • Public Liability
  • Repatriation

 

Related Government Websites

 

This information about mandatory and supplemental employee benefits in Armenia comes from Asinta’s Central and Eastern European Partner, the GrECo Group.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.

Czech Republic

Mandatory employee benefits in the Czech Republic include retirement, paid time off, and unemployment insurance. Supplementary employee benefits include retirement, flexible benefits, and meal vouchers. Perks in the country include gym memberships, language courses, salary continuation plans, transportation, and an additional week of vacation.

Mandatory Employee Benefits in the Czech Republic

Pension

Compulsory coverage applies to all employees, including self-employed persons, except casual and seasonal workers. Others can join voluntarily. The system is administered by the Czech Administration of Social Security. It is a defined benefit plan (DB).

Retirement ages:

For all employees (women and men) born after 1971, the retirement age is 65.

There are exceptions here for male employees born before 1971

Retirement ages for men

The normal retirement age for men depends upon the birth year and is 63 years for those born in 1953, increasing to 65 years as below.

  • The normal pension age is 60 if born before 1936
  • The normal pension age gradually increases to 63 years if born between 1936 and 1953
  • The pension age increases by two months for each year after 1953, if born after that year

Retirement ages for women

The normal retirement age for women is dependent on the number of children and the year of birth as below:

  • Born before 1936, the normal retirement age is 53–57, depending on the number of children raised. *
  • Born between 1936 and 1965, the normal retirement age gradually increases to 65.
YEAR OF BIRTH NORMAL RETIREMENT AGE ANNUAL INCREASE (MONTHS)
1952 to 1955 61 years and 8 months to 62 years and 8 months       4
1956 to 1957 63 years and 2 months to 63 years and 8 months       6
1958 to 1965 63 years and 10 months to 65 years       2

 

The normal retirement age for women with one child is:

YEAR OF BIRTH NORMAL RETIREMENT AGE ANNUAL INCREASE (MONTHS)
1953 to 1956 60 years and 8 months to 61 years and 8 months     4
1957 to 1961 62 years and 2 months to 64 years and 2 months     6
1962 64 years and 6 months    n/a
1963 to 1965 64 years and 8 months to 65 years    2

Maternity / Paternity Pay – Maternity Benefits

Maternity leave is financial support in place of a parent’s salary and is paid for 28 weeks (or for twins, triplets, etc., 37 weeks). The maternity leave period begins at least six and, at most, eight weeks before the baby is due to be born. An employee is eligible for this benefit if the participation in sickness insurance was at least 270 days before the maternity leave begins, and the person was employed at that time, or the employment ended within the past 180 days. Self-employed parents can also claim maternity leave if they have paid sickness insurance for 270 days before the leave begins, of which 180 days must have been within the year immediately preceding the maternity leave. Maternity leave must be taken before your child is 1 year old. Maternity leave amounts to 70% of an average gross salary, calculated based on the preceding year; for the self-employed, the amount is established based on the level of sickness insurance contributions paid

Paid parental leave is financial support for parents, which usually follows the end of maternity leave. An employee is eligible to take it if caring for a child at home (not taking him/her to a daycare/nursery/pre-school)

Paid parental leave consists of a maximum of 350 thousand crowns of benefit (CZK 525 thousand in case of multiple births), which must be taken during the first three years of the child’s life.

Employment Insurance

Unemployment benefits are payable for up to five months, regardless of the termination reason. The benefit period may increase in relation to the person’s age:

  • Up to age 50 – Five months
  • Age 50 to 55 – Eight months
  • Over age 55 – Eleven months

If the employer ends the employment contract, unemployment benefits are payable:

  • For the first two months: 65% of the previous average monthly salary, with a cap at 58% of the average national monthly salary.
  • For the next two months: 50% of the national average monthly salary.
  • For the rest of the period: 45% of the national average monthly salary.

 

Supplementary Employee Benefits in the Czech Republic

Retirement

SUPPLEMENTARY PENSION INSURANCE (CLOSED TO NEW ENTRANTS)

From 1994 to 2012, employees could take out voluntary supplemental pension insurance coverage under the Supplementary Pension Insurance Act. It set conditions for establishing and managing pension funds, stipulated the types of pension provisions, and specified the terms under which state incentive contributions are provided.

Pension contributions are payable to authorized pension funds of an employee’s choice. There cannot be a negative return on contributions; all contributions paid and investment returns already accrued to the account must be paid to the participant.

Pension funds had to be established as joint-stock companies with a minimum initial capital of CZK500 million until the end of 2012, when pension funds were transformed into new “Pension Companies,” nine funds operated in the market, with a total of almost 5.2 million participants (in a population of 10.4 million).

Membership is voluntary. It is not possible to switch between funds anymore unless the insured accepts the conditions of the newly established supplementary pension savings scheme. Contributions to more than one pension fund at a time are not permissible. Plans are defined contribution (DC) plans. Since tax incentives were introduced in 2001, there has been an increasing prevalence of employer-sponsored retirement plans.

SUPPLEMENTARY PENSION SAVINGS (THIRD PILLAR, PENSION REFORM 2013)

The most recent pension vehicle — supplementary pension savings — became effective on January 1, 2013. It substitutes the supplementary pension insurance, which has been closed to newcomers since December 1, 2012. Participants already in the scheme can continue savings under the previous arrangement but must stay with the existing provider. Those willing to change providers must accept the conditions of supplementary pension savings, governed by Law 427/2011.

Persons over 18 and domiciled in the country, as well as members of the European Union, are eligible if they pay contributions towards the statutory pension scheme or health insurance. The nonnegative return condition has been removed from the rules for pension savings. The state matches employee contributions with a subsidy of up to a maximum of CZK 2,760 per year.

Healthcare

The Czech public healthcare system covers all needed treatment, so the extended healthcare system is not well developed.

There is a growing interest in above-standard medical care, especially in foreign companies in the IT and pharmaceutical industries.

Group Life and Accident Benefit

Group insurance is typically provided by multinational companies and covers death from any cause, AD&D, and total permanent disability. The insured amount is typically set as a multiple of annual salary (1 or 2 or more). All employees are eligible. The employer fully covers the premium, and the premium paid by the employer is taxable income for the employee.

Flexible Benefits

Flexible benefit plans are common, usually for multinational pharmaceutical and IT companies.  Each employee has a budget and can spend it based on their preferences for benefits offered by the employer.

Workplace Canteens/Meal Vouchers

Only larger employers offer workplace canteen for employees. The majority of other employers offer meal vouchers and meal lump-sum monetary allowances. Effective January 2021, meal contributions can be added to the salary. The maximum tax-deductible expense is CZK 115,50 for 2024 meal vouchers, and meal lump-sum monetary allowances are a fully tax-deductible expense of the employer.

 

Employee Perks

Gym Memberships

Some employers provide gym memberships to employees, especially in companies with low average employee age.

Language Courses

Language courses are provided to employees who need a foreign language to perform their jobs, especially when they work for a multinational employer.

Salary Continuation Plan

Multinational employers typically offer salary continuation plans to cover the gap between statutory benefits and salary in case of a lengthy illness.

Transportation Benefit

Employers in larger cities often cover an annual ticket for public transport.

Additional one week of holiday

Most employers offer an additional one week of holiday to statutory holiday (4 weeks).

 

This information about mandatory and supplemental employee benefits in the Czech Republic comes from Asinta’s Central and Eastern European Partner, the GrECo Group.

Nothing on this country page is intended to be legal, financial, or tax advice, and readers are advised to consult with their appropriate advisors regarding any legal, financial, or tax implications this information may address.