Dual-employed people pay 17.3 million euros in additional taxes from their personal income declarations

Taxes collected from the 2024 individual personal income tax declaration (DIVA) amounted to about 1.7 billion lek or 17.3 million euros, with an increase of 1.4% on an annual basis, according to data from the General Directorate of Taxes (GDT).

The amount collected came mainly from individuals with two or more jobs, who continue to be the main contributors to DIVA declarations, due to the additional tax they pay from the recalculation at the end of the year.

During the year, dual employees declare their salaries separately to each company they work for. At the beginning of the following year, when the DIVA declaration is made, both salaries are added together and taxed as one.

This increases the fiscal burden for two reasons. First, because during the year, the individual was individually deducted from each job, the unearned income up to 30 thousand lek. For example, if an individual had two salaries of 100 thousand lek each, he was exempt from tax up to 30 thousand lek for both salaries and then 13% was taxed from 30-100 thousand lek.

When the income declaration is made, at the beginning of the following year, the salaries are collected and he is only exempt for the first 30 thousand lekë.

Secondly, if the salaries collected exceed the limit of 200 thousand lek per month, the supplement is taxed at 23%. For example, if an individual has two salaries of 100 and 150 thousand lek per month, the difference of 50 thousand lek will be taxed at 23%.

This means that individuals with two jobs always pay additional income tax at the end of the year. The higher the income, the greater the additional tax.

From January 1, 2025, the tax on one salary is being withheld throughout the year

From January 1, 2025, with the amendments to Normative Act No. 7, dated 14.12.2023, in implementation of the new Income Tax Law (No. 29/2023), for the withholding of tax during the year, the dual employee must sign the personal status declaration.

Those who work in two or more jobs must sign this declaration for only one of the employers.

The two or more employees must choose the entity where the employee decides to apply the non-taxable salary limit according to Articles 20 and 22 of Law No. 29,2023 “On Income Tax” (up to 30 thousand lek). While the other company will withhold tax on all income, without deduction of untaxed income up to 30 thousand lek.

According to the income tax law, salaries up to 30 thousand lek are not taxed. For incomes from 30 thousand to 200 thousand lek, the tax is 13% and for incomes over 200 thousand lek, the tax is 23%.

Now this tax (13% of 30 thousand lek) will be withheld during the year by one of the employers and when he files his personal income declaration by March 31 of the following year, he will no longer have to pay it.

For dual employees, whose combined salary exceeds 200 thousand lek per month, or 2.4 million lek per year and as a result the addition after 200 thousand lek is taxed at 23%, they will have tax withheld on 30 thousand lek of one salary during the year, but will still have to pay the additional tax of 23% when they file their personal income declaration at the beginning of next year.

The obligation of second-hand workers to complete and submit DIVA began to be implemented for the first time in 2020./ MONITOR