For decades, hundreds of business owners, directors and shareholders have been declaring monthly salaries of €500, even paying low contributions to the Social Insurance Fund (SSF).
At the same time, they increased their incomes through the dividends they received, which, before the implementation of the tax reform, were taxed at a rate of 17%.
It is worth noting that these people do not currently pay any contributions to the Social Security Fund for dividends.
In fact, due to the low earnings they declared, they also fell under the tax-free income, i.e. they were not taxed, while in the future some could also become beneficiaries of a social pension, as well as a low-income pensioner's allowance.
And all this was legal, as the law allowed them to do so. From 1 January 2026, when the tax reform is implemented, the taxation of dividends is reduced to 5%. Therefore, this category will be able to further increase its incomes, at the expense of the state.
They declare meagre salaries
In the context of the pension reform, this practice will be put to an end, as, through a specific formula, directors, owners and shareholders of companies will pay contributions to the Social Security Fund on dividends, up to a certain ceiling.
The draft bill provides that, for employees who are also shareholders of the company in which they work, the definition of remuneration will include the dividends they receive from the company in which they are employed.
According to information from "F", 2,990 owners, directors and shareholders of businesses of up to three people declare monthly salaries of less than €500 to Social Insurance, while at the same time they receive income from dividends.
Specifically, according to data held by the Ministry of Labour, 11,500 business owners, directors and shareholders declare monthly earnings of up to €2,000. Of these, 26% (2,990), i.e. about one in four, declare a salary of less than €500 per month.
The formula to be applied
The goal of the Ministry of Labour is for employees who also receive income from dividends to pay contributions up to the amount of the two insurance units, which correspond to €22,960.
That is, for those owners, directors and shareholders of businesses who declare a salary to Social Insurance, through the legislative regulation that is being promoted, the difference will be calculated, so that they can pay additional contributions on their dividends.
According to the formula of the competent ministry, if a director, owner or shareholder declares a salary of €500 per month, i.e. €6,000 per year, the competent Authority will calculate the contributions to the Social Security Fund on the specific amount.
Subsequently, it will also pay contributions to the Fund on dividends, until the limit corresponding to twice the basic annual insurable earnings is reached.
It should be noted that last year and this year the basic annual insurable earnings are set at €11,480. That is, the corresponding contribution will be paid up to the limit of €22,960 per year.
State revenues will increase
With the application of this formula, the number of contributors to the Social Security Fund and, by extension, the state's revenues will increase. The Minister of Labour noted that there are people who declare low wages, while at the same time receiving income from dividends.
As he stressed, the goal is for the pension to reflect the contributions of each insured person, limiting the need to pay welfare benefits.
According to the Minister of Labour, if someone receives an annual salary of €15,000 and dividends of €30,000, the contributions will be calculated on his salary and on €8,000 from dividends, in order to reach the limit of €23,000. This amount corresponds to two insurance units.
In addition to this regulation, the bill on pension reform also provides for the creation of a new group of contributors to the Social Insurance Fund, which will concern the so-called income earners. In particular, income from offices, dividends, interest, rent, intellectual property or patent rights, fees and other property profits will be taken into account.
