Slovakia's Third Consolidation Package: What Changes to Expect?

Beginning in late 2025 and early 2026, Slovakia is set to undergo significant legislative changes affecting labor, taxation, social and health insurance, and business operations. The third consolidation package introduces wide-ranging amendments that will impact employees, employers, and entrepreneurs alike. Here's an overview of the most significant updates.

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Changes to the Labour Code and Public Holidays Act

• The public holidays on September 15th and May 8th will be regular working days in 2026.
• The ban on retail sales during public holidays will be limited to specific dates: January 1st, Good Friday, Easter Sunday, December 24th (after 12:00 PM), December 25th, and December 26th.

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Changes to the Mining Act (effective January 1, 2026)

• The Mining Act will see changes in payment amounts, introducing a new levy on the extraction of primary raw materials (gravel, sand, and building stone) at a rate of €1.35 per tonne.

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Travel Allowances Act (effective November 1, 2025)

• New special basic meal allowance rates will be introduced for specific employee groups and for travel to certain countries or regions.

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Social Insurance Act (effective January 1, 2026)

• As of January 1, 2026, the so-called "contribution holiday" for newly self-employed individuals will be eliminated. This holiday previously allowed them to delay social insurance payments until after filing their first annual tax return.
• Self-employed individuals will now be required to pay social insurance contributions after five months of business activity, regardless of their income. The minimum monthly social insurance contribution for the self-employed in 2026 will be €131.34.
• Unemployment benefits, paid over a six-month period, will be gradually reduced as follows:
  
  • First to third month of the support period: 50% of the daily assessment base.
  • Fourth month of the support period: 40% of the daily assessment base.
  • Fifth month of the support period: 30% of the daily assessment base.
  • Sixth month of the support period: 20% of the daily assessment base.

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Act on Income Compensation during an Employee's Temporary Incapacity for Work

• Employers' responsibility for sick pay will be extended from the first 10 days of an employee's illness to the first 14 days. From the 15th day, the Social Insurance Agency will take over payments. This change is effective April 1, 2026.

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Health Insurance Act (effective January 1, 2026)

• From January 1, 2026, to December 31, 2027, the health insurance premium rate will increase by 1% for employees, self-employed individuals, and those insured by the state.

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Insurance Act (effective January 1, 2026)

• The levy on compulsory motor third-party liability insurance premiums will increase from 8% to 10%.

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VAT Act (effective January 1, 2026)

• Restrictions on VAT deductions for vehicles (from January 1, 2026, to June 30, 2028)
  
  • The deductible VAT on the purchase of a passenger vehicle (categories M1, L1e, or L3e) will be limited to 50%.
  • The deductible VAT on a long-term lease of a passenger vehicle will also be limited to 50%.
  • However, exceptions will apply for vehicles used exclusively for business purposes, such as driving schools, passenger transport services, or vehicle rentals.

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VAT Rate Change for "Unhealthy" Sugary and Salty Foods

• From January 1, 2026, the standard 23% VAT rate will be applied to selected food items, including various sweets, confectionery, cakes, ice cream, jams, and savory snacks. Previously, a 19% rate applied to these goods.

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Income Tax Act (No. 595/2003 Coll., as amended, effective January 1, 2026)

• The calculation for the non-taxable portion of the tax base per taxpayer will be adjusted by limiting the multiples of the subsistence minimum used in the formula.
• New tax brackets with higher rates for higher earners will be introduced, impacting net wages. The higher the income, the higher the tax rate.
• The lower brackets will remain similar to current rates (a basic rate of 19% up to €44,000 and 25% above that). However, new brackets will be added for higher incomes: a 30% rate for an annual tax base over €60,000, and a 35% rate for a tax base exceeding €75,000. What does this mean? While an employee with an average or above-average salary will see a minor impact, high-income earners will face a significantly higher tax burden.
• The minimum corporate income tax (tax license) is also changing. For companies with revenues exceeding €5 million, the tax license will increase from €3,840 to €11,520, payable regardless of the company's profitability.

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Insurance Tax Act (effective January 1, 2026)

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

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Gambling Act

• Regulations for online gambling will be changed and tightened.
• Levies on gambling will be increased: Online gaming levies will rise from 27% to 30% (effective December 1, 2025).
• The method for determining the levy amount will change. It will no longer be specified in the Gambling Act but will be set by government regulation, effective January 1, 2026.

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Slovakia's third consolidation package is set to introduce a number of fundamental changes in 2025 and 2026. Employees will primarily be affected by adjustments to income tax, social contributions, and sick pay regulations. Entrepreneurs and companies must prepare for higher contributions, taxes, and license fees, as well as new administrative burdens. These measures are designed to improve public finances, but their impact will vary depending on the financial and business circumstances of each individual and company.