Payroll alert: Changes in Agreements as of 01.01.2023

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Deductible Item (OOP)

As of 01.01.2023 the Deductible Item ‘OOP’ will replace the pension insurance exemption following the amendment of the Social Insurance Act. The OPP eligible individuals are:

1. Full time students (secondary and higher education) with Agreement on part-time work for students
2. Pensioners with Agreement on work performance or Agreement on work activity and receiving one of the pension types:

• Old-age pension;
• Early old-age pension;
• Disability pension;
• Disability Service pension;
• Service pension at retirement age.

The Deductible item ‘OOP’ cannot be applied for the Agreements on seasonal work activity.

On a monthly basis, the deductible item ‘OOP’ can be applied to one Agreement only by submitting the ‘Announcement and Affidavit OOP’ in writing.

The exemption currently valid for Agreements passing from 2022 to 2023 will automatically expire on 31.12.2022. Students and pensioners interested in the new Deductible item must inform their employer about the ‘OOP’ application to the existing Agreement. To apply the Deductible item as of 01.01.2023, the written Announcement must be submitted by 31.12.2022. In case the Announcement is submitted after 01.01.2023, the OOP can be applied as of 01.02.2023 (i.e. the first day following the month of submission of the Announcement).

The value of the Deductible item ‘OOP’ is 200 EUR / month. It can be applied to the employee and employer contribution to the old-age pension, disability pension and the solidarity reserve fund. The contributions will be applied to the amount more than 200 EUR in case the students / pensioners earn over 200 EUR in a month. 

The employer is required to report the start and end of the Deductible item application at the latest on the first day following the submission of the Announcement (start or end of the OOP).

Agreements on seasonal work activity

As of 01.01.2023 the Labour Code (§ 228a, sec. 1, let. b)). constitutes a new type of Agreement on seasonal work activity allowing the work of maximum 520 hours in a calendar year.

The Labour Code – Annex 1b lists the types of seasonal work applicable to the Agreement (the seasonal work is related to agriculture, tourism, food industry and forestry).

The average weekly working time cannot exceed 40 hours throughout the Agreement duration, in a maximum length of 4 months. Agreements on seasonal work activity can be concluded for a maximum of 8 months.

Deductible item for seasonal work ‘OOP-seasonal’ is applicable for this type of Agreements. The Deductible item ‘OOP-seasonal’ decreases the base for old-age pension and unemployment contributions of the employer as well as employee.

In 2023, the value of the deductible item ‘OOP’ will be 605,50 EUR / month.

Employees with the Agreements on seasonal work are subject to the sickness insurance. In case of sickness, these employees are entitled to income compensation as well as sickness benefits.

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