Changes in the subsistence minimum and their impact

The subsistence minimum is a seemingly minor figure, but in reality it affects a large number of other amounts in the tax and social field. Changes in the subsistence minimum and their impact therefore concern both entrepreneurs and employers, even if they do not always realise it. In this article we explain what the subsistence minimum is linked to and why it is worth keeping track of its adjustments.

What the subsistence minimum is

The subsistence minimum is a socially recognised minimum income threshold below which a person is in material need. Its amount is usually adjusted once a year and is based on how the cost of living develops. The amount itself changes, which is why in this text we do not give specific figures as definitive facts – check the current amount in the measure in force that sets the subsistence minimum.

What the subsistence minimum is linked to

The importance of this figure lies in the fact that a large number of other values are derived from it. That is exactly why changes in the subsistence minimum and their impact are so far-reaching.

• The non-taxable portion of the tax base per taxpayer
• The threshold for claiming certain tax bonuses
• The amount of selected benefits and allowances
• The protected amounts in enforcement wage deductions
• Certain thresholds in the social field

The impact on income tax

As the non-taxable portion of the tax base is derived from the subsistence minimum, a change in it directly affects how much of their income a taxpayer can deduct. For entrepreneurs and employees alike, this means that the resulting tax liability changes, even if the tax rate itself does not change. The thresholds above which certain reliefs are reduced may shift as well. That is why, when preparing your tax return, you should always work with the figures valid for the tax period concerned and not rely on last year’s numbers.

The impact on payroll

What matters for employers is that the subsistence minimum is part of the calculation of enforcement wage deductions. If its amount changes, so does the amount that cannot be deducted from the employee, the so-called protected portion. Payroll software should update these values automatically, but it is worth checking so that deductions are made correctly and you avoid mistakes in wage payments. An incorrectly calculated deduction can harm both the employee and you as the payer of the wage.

Why keep track of it

Even though the subsistence minimum is not a topic that gets much attention, its regular adjustment sets off a chain of changes in other areas. An entrepreneur who is not aware of this may work with outdated amounts and make a mistake in a tax return or in wage payments. That is why, with each annual adjustment, you should check which values concern you.

How to avoid mistakes

The simplest approach is to rely on updated software and on a check by an expert who will translate the impact into specific calculations. If you are not sure how changes in the subsistence minimum and their impact will be reflected in your figures, consult an accountant. At Bilvao we keep track of these adjustments on an ongoing basis and make sure that your tax and payroll calculations are always based on the current values valid for the period concerned.

Current figures (2026)

Subsistence minimum

Figures valid for 2026; check the current wording.

Related articles: Amendments concerning eKasa and the recording of sales, New rules for cash payments, The Consumer Protection Act and its impact on entrepreneurs.

Frequently asked questions

Why is the subsistence minimum important for entrepreneurs?

Several tax figures are derived from the subsistence minimum, for example the non-taxable portion of the tax base. A change in it therefore affects the resulting tax liability. Check the current amount in the measure in force, and in your tax return work with the figures valid for the period concerned.

How does the subsistence minimum affect employees’ pay?

The subsistence minimum is used mainly in calculating the protected amounts in enforcement wage deductions. When its amount changes, so does the amount that cannot be deducted from the employee. So check that your payroll software is working with the current values.