Slovenia is a country in Central Europe with over 2 million residents, and it shares borders with Italy, Hungary, Croatia, and Austria. Slovenia’s higher-than-average GDP per capita, combined with its membership in the EU and Eurozone, makes it an ideal location for trade, employment, and investment.

In a bid to improve its workforce and infrastructure, the government of Slovenia requires employers and employees to make payroll tax contributions and income tax deductions.

The payroll tax contributions from employers and employees provide social security benefits for employees, including health, unemployment, disability, and maternity insurance, as well as pension.

Income tax in Slovenia is split into Personal Income Tax for individuals and Corporate Income Tax for businesses or corporations. These payments fund government projects and operations, bettering the country as a whole.

Payroll tax contributions from both parties are made on a monthly basis, while income tax for individuals and businesses is made after each business or calendar year.

As an employer, figuring out how to hire employees in Slovenia, Remote People’s Employers of Record (EOR) services simplify employment for you. We cover hiring, employee management, payroll, and taxation, while complying with Slovenia’s employment laws.

Below, our guide to payroll and income tax in Slovenia addresses the most important details you need to know as an employer operating in the country.

What is Payroll Tax in Slovenia?

Payroll tax in Slovenia is a portion of an employee’s payroll that needs to be contributed towards funding the employee’s social security.

Like in many other established nations, the government of Slovenia makes it compulsory to offer benefits to employees, resulting in better work and living conditions. To fund these benefits, the authorities require contributions from employers and employees.

The most notable forms of compulsory benefits that are funded by employee and employer payroll tax contributions in Slovenia are:

  • Pension
  • Disability insurance
  • Health insurance
  • Maternity/parental allowance
  • Injury at work insurance
  • Employment/unemployment allowance

The heading below breaks down the contributions that employers and employees in Slovenia are mandated to make towards fulfilling payroll tax requirements.

Employer Contributions to Payroll Tax

Employers in Slovenia are required to contribute a total of 16.1% of an employee’s payroll toward fulfilling payroll tax. Here are the exact figures for the employer contribution to social security benefits under the Slovenian payroll tax laws:

Contribution TypeRate (%)
Pension and disability insurance8.85%
Health insurance6.56%
Unemployment insurance0.06%
Work injury0.53%
Parental insurance0.10%

You can try out our Global Payroll Calculator to simplify payroll calculations for employees.

Employee Contributions to Payroll Tax

Employees in Slovenia are mandated to contribute a total of 22.1% of their payroll towards payroll tax. This is higher than the mandated employer contributions of 16.1%.

Here’s a breakdown of the individual contributions that make up the 22.1% required of employees:

Contribution Type Rate (%)
Pension and disability insurance 15.5%
Health insurance 6.36%
Unemployment insurance 0.14%
Work injury 0%
Parental insurance 0.10%

As seen above, employees do not contribute to insurance for injury at work, as this is only the employer’s responsibility.

Income Tax

Income tax in Slovenia is a percentage of income made by individuals or businesses that is made mandatory by the government. When workers and organisations file income tax to the government, the funds are used for public projects and government operations.

The Financial Republic of the Administration of the Republic of Slovenia is in charge of regulating and enforcing income taxation for corporations and individuals in Slovenia.

The two main types of income tax in Slovenia – Personal Income Tax and Corporate Income Tax – are explained below, as well as the requirements for non-residents and the exempt income sources.

Personal Income Tax

Residents in Slovenia are required to pay Personal Income Tax on their earnings each year. The government of Slovenia follows the principle of taxation of worldwide income, meaning Slovenian residents pay income tax for income earned from sources both within and outside Slovenia.

As an employer looking to recruit talent in Slovenia, your resident employees are mandated to pay Personal Income Tax.

The government of Slovenia uses progressive tax rates for the calculation of Personal Income Tax, requiring employees to pay more as their earnings increase. Depending on an employee’s earnings, Personal Income Tax is paid in two parts: a fixed amount and a percentage of the income in excess of the lower end of the tax bracket.

There are 5 different income brackets in Slovenia, with increasing fixed tax and excess tax rates, as shown in the table below.

Income Bracket Fixed Tax Excess Tax Percentage
€0 – €9,721.43 – 16%
€9,721.43 – €28,592.44 €1,555.43 26% on the excess over €9,721.43
€28,592.44 – €57,184.88 €6,461.89 33% on the excess over €28,592.44
€57,184.88 – €82,346.23 €15,897.40 39% on the excess over €57,184.88
€82,346.23 and above €25,710.33 50% on the excess over €82,346.23

Corporate Income Tax

Just as the government of Slovenia requires individuals to pay Personal Income Tax, businesses are expected to pay Corporate Income Tax. This value for Corporate Income Tax is calculated as a percentage of how much a company or business makes in a year.

Unlike Personal Income Tax, which uses progressive tax rates, Corporate Income Tax in Slovenia is set at a fixed rate of 19%.

Non-Resident Income Tax

The government of Slovenia declares a non-resident to be someone who:

  • Does not have permanent residence in Slovenia
  • Does not have economic and personal interests in Slovenia
  • Spends less than 183 days a year in Slovenia
  • Is a diplomat or works with an international institution

For non-residents in Slovenia, the personal income tax requirement only applies to income from a source in Slovenia. In cases where a company is registered outside Slovenia but does business in Slovenia, the company and employees need to pay income tax for Slovenian-sourced income.

A Slovenian income source is regarded as:

  • Employment or services provided in Slovenia
  • Income paid by a resident of Slovenia
  • Income from business activities with a business registered in Slovenia
  • Real estate income in Slovenia

Filing of Income Tax Returns

The Financial Republic of the Administration of the Republic of Slovenia uses a digital system for filing taxes. This system is called the eTax system, and it requires individuals or businesses to fill out an electronic form to file personal or corporate income tax, respectively.

The deadline for filing income tax returns is March 31st of the year following the calendar year to be taxed. In cases where tax is being filed for a business year and not a calendar year, the deadline is within three months of the start of the following business year.

Exemptions to Income Tax

Not all forms of income in Slovenia are recognised by the Income Tax Act as taxable income. Examples of the notable income sources that the Slovenian authorities consider as exempt from income tax are explained in the following headings.

  • Subsidies and Aid: Income received from subsidies for housing, natural disasters, or from charitable organisations is exempt from income tax. This exemption also applies to financial assistance from humanitarian institutions and self-governing institutions at local or state levels.
  • Reimbursements of Expenses and Services Under Special Laws: The government of Slovenia does not charge income tax on reimbursements that an individual receives for expenses covered by a special law or act. The special laws or acts that this reimbursement exemption applies to include:
    • War Veterans Act
    • Victims of War Violence Act
    • Act on the Redress of Injustices
    • Act on the Social Integration of the Disabled
  • Education, Agriculture, and Forestry Income: There is no income tax for scholarships or benefits paid to a student to cover tuition, accommodation, transportation, and other education-related costs. Income gained or damages to property from providing agricultural or forestry services are not taxable.
  • Compensation: When an individual is entitled to compensation due to certain damages, the compensation income is not taxable. Instances where an individual is entitled to compensation include wrongful conviction and lost income due to crime.
  • Insurance Income: When residents of Slovenia receive funds for Parental, Unemployment, Health, Pension, Disability, and Long-Term Care insurance, the income does not require income tax deductions.
  • Income Related to Protection, Security, and Rescue: The income that a Slovenian resident receives from compensation for expenses incurred on defence needs or protection from disasters, or from joining a reserve military service or voluntary military service, is not subject to income tax.

What Is Not Considered As Income?

Under the Income Tax Act, the authorities in Slovenia do not recognise the following as income:

  • Money won from playing a game of chance
  • Family inheritance
  • Payments received from insurance for illness, disability, or injury
  • Gifts received from someone who is not the recipient’s employer
  • Benefits or bonuses received when buying a good or service
  • Assets or profits received from the transfer of assets between a company and an individual, or after the end of a contract

Payroll Tax and Income Tax in Slovenia Made Easy

Slovenia’s tax laws for income and payroll tax are strict, and violating them can result in penalties. Remote People’s Employer of Record (EOR) and Professional Employer Organisation (PEO) services comply with Slovenia’s laws when managing your employees and their payroll.