How to legally increase net salary?
If you have agreed on a fixed gross salary with your employer, every tax reduction directly increases the amount of money that lands in your account. Here are some legal ways you can increase your monthly income.
1. Update and optimize your personal deduction
Income tax is calculated only after your non-taxable "Personal deduction" is subtracted from your base. By adding certain factors, this non-taxable portion grows, which reduces the tax base.
Who qualifies for a higher deduction?
- Dependent children: The deduction grows with each child – each subsequent child brings a larger percentage of deduction.
- Unemployed spouse: If the partner has minimal or zero income at the annual level.
- Established disability: The deduction is applied according to official decisions of the competent authorities.
Pro tip on redistribution!
If both partners work, children should be registered on the parent with the higher gross salary to maximize the non-taxable portion, as the parent with the lower salary might not have enough tax to be reduced at all.
2. Payment of tax-free allowances instead of raises
It is cheaper for the employer to pay you certain allowances on which no contributions are paid than to increase your gross salary. This includes:
- Annual bonus (up to the tax-free limit)
- Meal and holiday allowance
- Travel expenses (transportation)
- Education and professional training
3. Tax incentives for young people
The state often offers certain tax exemptions or refunds of part of the tax for young people up to a certain age limit (e.g., up to 40 years for annual personal income tax).