Differences in accounting Topic: Salary

1. Differences in accountingTopic:Salary

2. Overview Salary

3. Details Austria • Law base: UGB • Sosial security insurance 18% employees, 18.2% worker • Extra pay: christmas extra pay and holiday extra pay as 13 and 14 salary • Special tax rates for extra pay: 17.2% worker, 17% employees • Ancillary wages: Service giver contribution, addition to the service giver contribution, local tax, underground tax (Vienna) • 1/6 border for special payments • Free allowances with income tax, comuter lump sum, union dues • Security insurance includes: Unemployment insurance, health insurance, accident insurance, pension insurance • Non-contributory one repays: Travel costs remuneration, environmental bonus, family allowance, contributions to coworker precaution cashes • Insignificance borders: € 323.46 - € 3630,00 If an employee should fall under the insignificance border, then it has accident insurance to only pay (also only accident-insured)

4. 2. Details Austria • Pattern of the salary statement: Wage tax assessment basis: Basic salary gross amount + other current purchases - wage tax free amounts + bonus - social securtity insurance contributions =gross amount -Free allowance - legal departures - union fee - voluntarily departures - „Pendlerpauschale“ - Other departures = Assessment basis + Family allowance = net amount

5. Details Hungary • Law-base: Work law, laws over the society insurance, personnel income taxes and account systems • Progression level: • 0-1.700.000Ft 18%, 1.700.000 Ft 279.000Ft + 36% from the part over 1.700.000Ft • Calculation of salary scheme: salary + Auxiliary payment (e.g. the paid vacation, the paid celebrations) + Extra pay (e.g. leader addition, language extra pay, layer premium) + bonus + over work = gross wage -     legal departures (e.g. personnel income tax advance, old age pension insurance contribution, health insurance contribution -     voluntarily Departures (e.g. trade union fee, freiwillige old age pension insurance, credit repayment + sickpay + family allowance =Net wage

6. 2. Details Hungary • The non-contributory incomes: Family allowance, educating assistance, meal subsidy, support at the beginning of the school, inheritance, compensation, scholarships of donations, holidays cheque • Meal coupon is non-contributory to 4500 Ft/month. The warm supply is non-contributory to 9000 Ft/month. Support at the beginning of the school is 19,000 Ft/child/jear non-contributory. Holiday cheque is non-contributory up to the sum on the first day of the yearly of the valid minimum wage • Promotions during the deposit of the ill and old age pension insurance, school money promotion, personal promotion and promotion of the family, insurance promotion, promotion after the donations. • Family allowance: after 1 child 11,000 Ft/month after 2 children 12,000 Ft/person/month after 3 or more children 14,000 Ft/person/month • There is no difference between workers and employees during the tax and wage computation.

7. 3. Details Hungary • Special tax: starting from 1 January 2007, if the astringent yearly income exceeds the highest border of the pension contribution reason, then 4% of the part over the border • All insurance (outside of the health insurance) applies to the partial workers. • The tax and contribution obligations of the employer: 29% social security fee 3% employer fee 1.5% technical training contribution 1950 Ft/person/month health insurance fee (in the year 2006)

8. 1. Details Denmark When salary is paid to employees the firm pays tax deducted from income at source, contributions to the labour market supplementary pension scheme and labour market contributions. • Tax deducted from income at sourceThe basis for the tax deducted from income at source is the employee’s income, tax deduction and tax rate. Income taxed at source is the total salary including overtime pay and deductible car, telephone, etc., but excluding contributions to the labour market supplementary pension scheme, labour market contributions, special pension savings and any contribution from the employers’ trainee reimbursement scheme (AER) and tax-free traveling allowance. Tax deducted from income at source is calculated as a percentage of the income taxed at source deducted from the employee’s tax deduction. The percentage and tax deduction appear on the employee’s tax card which is renewed annually. The employer can also receive tax card information electronically from the tax authorities. At the end of the year the employee must have a statement for paid salary, withheld tax deducted from income at source, labour market contributions, etc. – a so-called ”information slip.”

9. 2. Details Dänemark • ATP - Contributions to the labour market supplementary pension scheme ATP stands for contributions to the labour market supplementary pension scheme which goes towards the employee’s pension. ATP is paid out when the employee reaches 67/65 years depending on whether the employee was born before or after 1 July 1939. ATP can also be paid out as a lump sum if the total payment is very low. The employer must pay the ATP contribution for all wage earners between 16 and 66 years of age and who work at least 9 hours per week. The amount of the ATP contribution depends on the number of hours the wage earner works during each salary period. The employer pays 2/3 of the ATP contribution while the wage earner pays 1/3. The ATP contribution for a full-time employee in a private company is DKK 149.10 per month (2003) for the employer and DKK 74.55 (2003) for the employee. The wage earner’s part of the ATP contribution is deducted from each salary payment and the employer pays both the company’s and the employee’s share of the ATP at the end of the quarter. The employer is liable for the full ATP contribution even if the employer accidentally neglects to withhold the employee’s share.

10. 3. Details Dänemark At the end of the year you must state who you have paid ATP contributions for. You must therefore save any information about the employee’s CPR (civil reg. no.) number and the amount of the ATP contribution.If the ATP-insured dies leaving a spouse and/or children under the age of 18 years, the ATP is paid out in lump sum to them.Labour market contributions The labour market contribution covers several of the state’s social expenses for, e.g., benefits, adult vocational training, sickness benefits, voluntary early retirement pay, rehabilitation, flextime, etc. The labour market contribution, called AM-contribution, which the employer must deduct from the employee’s salary, is 8% (2003) of the gross earnings plus the value of certain employee benefits, but minus ATP and any pension contributions.

11. 4. Details Dänemark • Paying tax, etc.Tax deducted from income at source and employee contributions are paid to SKAT (tax). The tax and contributions must be declared and paid on special payment cards that SKAT sends to the employer. Tax deducted from income at source and labour market contributions that are deducted for one month must be paid no later than the 10th of the following month. Payments for December can however wait until 17 January.

12. Details Finland When salary is paid to employees the employer has to deduct the witholding tax, employees´ pension and unemployment insurance fee from the salary. The employer is also paying the pension fee and the unemployment insurance fee of its own from the amount of salary. The social security fee is paid at the same time from the amount of salary by the company. • law-base: Agreement Law • collective agreements: General Labour Agreements • Progression levels: • 12 200 - 17 000 9,0% • 17 000 - 20 000 14,0% • 20 000 - 32 800 19,5% • 32 800 - 58 200 25,0% • 58 200 32,5%

13. 2. Details Finland Salary + benefits, provision, bonus, surcharges = gross basis - lawful debits (income tax, social insurance/ national insurance) - voluntary debits (union fees) = net pay • non contributory hire/remuneration: • expenses substitute • mud bonus • family assistance payments • basis of calculation for the income tax: gross basis - wage tax free amounts - social insurance - allowable expenses - union fee = basis of assessment for income tax

14. 3. Details Finland • No benefits concerning tax rates for sole earners without children or with 1, 2 or 3 children • Workers and employees are treated similarly. In Finland taxes get higher when one earns more. • In Finland you may have bonus, it depends on companies where you’re working. Some employees and workers can have a special vacation payment, which is up to 50 % from vacation salary. • Part-time workers have all the same insurances as full-time workers.

15. Details Germany • SGB (social legislation); LStG (wage tax law); BGB (civil GB) as law basis • Progression level: off € 10,000 23%, off € 15,000 33.5%, off € 26,000 50% • There are basic wage rates for single ones and splitting tariffs for married one. For salary statement tax schedules IV are determining. The entry-level tax rate amounts to 15% the highest tax rate 42% beginning with 7.664 € linear rising to 52,164 € (married double amounts) • Salary: Content + commission, bonus, overtime, premiums = gross basis - legal deliveries (e.g. social security, wage tax) - voluntarily contributions (e.g. union fee) + family contributions = net salary • no taxfree family contributions. This contribution is added to the content and is contained thereby in the basis for tax and insurance

16. 2. Details Germany • Taxfree one repays: Summing and additional pay for nightwork and holiday addition • Insignificance: Mini job to 400 € • Wage tax assessment basis: Gross salary a less taxfree income is the basis for wage tax and social security • Family allowance: Regulated by tax schedule II; However educator discharge contribution 1,308 €/year • During special payment 1/5 regulation

17. Details England • In the UK this is very complicated but the general consensus for 2006/07 tax year. Dependant an circumstances the government gives people an amount that they can earn without paying tax. The next £2020 is taxed at 10% the next £29380 is at 22% up to and then anything over £32,400 is taxed at 40%. • Again the government give an allowance and then we have national insurance deducted at 10%. • Taxation on Businesses Sole Traders and Partnerships are taxed as individuals as above. • Limited companies are taxed under corporation tax laws: Most companies are taxed at 30% in the UK. But if they class as a small company they can deduct marginal relief at 19%.

18. Details Estonia • law-base: Contract of employment • collective agreements just in big enterprises but usually not • In Estonia the tax rate is for 2006 is 23%. For 2007 it is 22%. The untaxable amount for 2006 is 2000 kroons per month (about 128 euro). • scheme for the calculation of salaries salary +bonus = Gross amount - lawful debits (income tax, unemployment insurance premiums, funded pension payment) = net pay • separate system of family assistance payments • no limit for social security insurance. The social security tax is 33%

19. 2. Details Estonia • basis of calculation for the income tax: Salary +Bonus =Gross amount -Obligatory pension payment (2% from gross amount) -Unemployment (0,6% from gross amount) -Untaxable amount (2000 kroons) Taxable amount -Income tax (23%) =Net amount • No differences between worker and employee concerning calculation of income • special payments like Christmas bonus or extra vacation paymentsdepednds on the firm. • Full or part-time jobs - it’s not important. The same obligatory of insurance. • unemployment insurance, pension, social • unemployment insurance premium 0,3% and social tax 33%