Average wage

What it means

The average wage is the average nominal monthly wage of an employee in the Slovak economy, published by the Statistical Office for each quarter and for the year. It is a statistic, but many regulations derive important thresholds and amounts from it.

The average wage from two years earlier determines the minimum and maximum assessment bases for contributions and the income threshold at which a sole trader becomes subject to compulsory social insurance. That is why sole traders’ minimum contributions change every year.

The average wage must be distinguished from average earnings, which are calculated for a specific employee from their own pay and used, for example, for holiday pay. Nor is it the same as the minimum wage, which the law sets as the lowest permitted pay.

How it works in practice

At the start of each year we update the parameters derived from the average wage in the payroll system and tell clients about the new minimum contributions. For sole traders we work out whether compulsory social insurance will start or end for them in July based on income in their tax return.

We also use the average wage as a benchmark when planning pay. When clients recruit, we show them where their offer sits against the average for the sector and region, because the national average is skewed by high pay in some sectors and in Bratislava.

For pensions and some social benefits, the average wage is used for recalculation and indexation. We therefore advise clients approaching retirement to check their insurance periods and assessment bases with the Social Insurance Agency in advance.

What to watch out for

The average wage is not a typical wage. Most employees earn less than the average, because it is pulled up by the high incomes of a smaller group. To judge what is usual in a region, the median, which the Statistical Office also publishes, is more suitable.

Thresholds derived from the average wage change automatically, without a separate law. Anyone with contracts, terms or internal limits tied to old amounts should update them every year, or contribution arrears can easily arise.