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      On September 9, 2025, Slovakia’s Minister of Finance unveiled the third package of fiscal consolidation measures, aimed at restoring public finances.1 Just two weeks later, on September 24, the Slovak Parliament approved the package in a shortened legislative procedure. The act was signed by Slovakia’s President on October 8, 2025, and it was published in the collection of law the next day. The new tax measures will take effect from January 2026.

      WHY THIS MATTERS

      The new consolidation package introduces sweeping changes that will significantly affect both businesses and individuals without much time to prepare for the changes.

      Among the most notable reforms for individuals are higher health insurance contributions for employees, a lower income threshold for claiming the general tax allowance, and the introduction of new progressive tax rates. These changes are expected to reduce net income for many employees.

      Self-employed individuals (sole traders) will also feel the effects, facing higher health insurance contributions, shorter exemption periods for paying social contributions, and an increased assessment base for minimum social insurance payments. These measures are also expected to reduce net incomes of the self-employed.

      Beyond these reforms, the package also includes other changes affecting daily life, such as a higher VAT rate on selected foods and the elimination of certain public holidays.

      Key Highlights

      Increase in Health Insurance Contributions

      Health insurance rates will rise from 4 to 5 percent for employees and from 15 to 16 percent for the self-employed and for self-payers.

      KPMG INSIGHTS

      KPMG in Slovakia states that, while all employees and sole traders will be affected, high-income earners will note the greatest impact on their net incomes, as there is no cap on the assessment base for health insurance contributions—unlike social insurance, which is capped.

      More Income Tax Rates

      New tax rates of 30 percent and 35 percent will be added to the existing 19 percent and 25 percent. The thresholds are as follows:

      • Tax base up to €43,983.32 = 19 percent

      • Tax base over €43,983.32 = 25 percent

      • Tax base over €60,349.21 = 30 percent

      • Tax base over €75,010.32 = 35 percent

      Lower Income Threshold for General Tax Allowance

      Starting in 2026, the percentage used to calculate the annual income threshold for claiming the general tax allowance will decrease by one point, specifically to 91.8 times the subsistence minimum. Before the legislative change, taxpayers for 2026 would have been eligible to claim the full general tax allowance on annual income up to €26,367.26. However, after the change, this entitlement will apply only to income up to €26,083.13. For income above this threshold, the allowance is gradually reduced until it reaches zero. The formula for calculating this reduction will be adjusted, also to the disadvantage of taxpayers.

      Reduced Unemployment Benefits

      Unemployment benefits will be reduced after three months of unemployment, with the amount decreasing by 10 percentage points each month. Until now, unemployed individuals were entitled to receive support equal to 50 percent of their previous gross salary for a period of six months. Under the new rules, from the fourth to the sixth month of unemployment, the benefit will be reduced by 10 percentage points each month, so that by the sixth month, the support will amount to only 20 percent of the gross income.

      Shorter Social Contribution Exemption for Sole Traders

      The exemption from paying social contributions for new sole traders will be shortened from one year to five months.

      Higher Minimum Social Insurance Assessment Base for Sole Traders

      Starting in 2026, sole traders will pay minimum social insurance contributions based on 60 percent of the average wage from two years prior, instead of the previous 50 percent. This means that, because of the increase in the assessment base, the minimum monthly payment will rise to €303.11. If the assessment base had remained at 50 percent, sole traders would have paid only €252.59 in 2026.

      KPMG INSIGHTS

      KPMG in Slovakia states that, sole traders will undoubtedly be significantly affected by this change. However, on September 30, 2025, Parliament approved the abolition of the financial transaction tax for sole traders from 2026, which will relieve some of their tax and administrative burden.

      Other Measures

      This overview covers only the most significant changes affecting employees and sole traders. However, the consolidation package introduces a broad spectrum of additional measures, which are summarized below:

      • Three public holidays (May 8, September 15, and November 17) will be abolished (this measure is effective already from 1 November 2025), with May 8 and September 15 being suspended only temporarily for 2026.

      • The period for which employers must pay sick leave compensation to their employees will be extended from 10 to 14 days.

      • The state will no longer cover social insurance contributions for individuals on maternity leave.

      • A new minimum corporate tax band will be introduced for companies with taxable income exceeding €5 million, raising the minimum tax from €3,840 to €11,520.

      • The special levy on companies operating in the field of collective investment will increase from 4.36 percent to 15 percent.
      • The VAT rate on foods with higher sugar and salt content will rise from 19 percent to 23 percent.

      • Taxes on gambling will be increased.

      • A new tax on primary materials (such as gravel and sand) will be introduced at a rate of €1.35 per ton.

      • Penalties and interest for unpaid or unreported taxes will be waived if the taxpayer settles or declares the tax between January 1 and June 30, 2026.

      • Mandatory social insurance contributions will apply also to income received during periods of sick leave, maternity leave, and similar circumstances (so far, an exemption applied).

      • Controls during sick leave will be tightened.

      • The VAT deduction for company cars used for private purposes will be limited from 100 percent to 50 percent.

      • The tax rate on non-life insurance will increase from 8 to 10 percent.

      KPMG INSIGHTS

      KPMG in Slovakia notes that, in recent years, fiscal consolidation measures aimed at restoring Slovakia’s public finances have consistently been adopted through shortened legislative procedure, despite their significant impact on individuals and businesses.

      As a result of the shortened legislative procedure, taxpayers will have very limited time to prepare for these changes, which will take effect as early as the beginning of 2026.

      For further information or advice regarding the upcoming measures and changes in Slovak tax legislation, taxpayers should contact their tax advisor or a member of the KPMG Slovakia GMS team (see Contacts section).

      FOOTNOTE:

      1  (In Slovak) Tlačová agentúra Slovenskej republiky - TASR.sk, Tlačová agentúra Slovenskej republiky 2025, published on September 9, 2025.

      Contacts

      Tomas Ciran
      Tomas Ciran

      Partner

      KPMG in Slovakia

      martina-cizmarikova
      Martina Cizmarikova

      Manager, Tax

      KPMG in Slovakia

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      The information contained in this newsletter was submitted by the KPMG International member firm in Slovakia.

      GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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