An over 20% drop in the value of the peso has recently led to low consumer spending and high inflation throughout the country. With a current inflation at over 50% and expected to increase, the Argentinian government has decided to raise the minimum wage by 35% over three installments in an attempt to boost purchasing power and deescalate the financial crises. This will increase the minimum wage from 12,500 pesos to 16,875 pesos per month.
Along with the minimum wage hike, the current administration has also included tax breaks, bonuses and price freezes, and capital controls to ease the effects of the current inflation.
For more information see our Argentina payroll and benefits full guide
The monthly minimum wage in Poland is set to increase over the next four years. In 2020 and 2021 the increase will be 15% raising minimum wage from 2,250 zlotys to 3,000 zlotys, and 10% each following year until 2024 where it will reach 4,000 zlotys.
The decision to raise the minimum wage follows the recent labor law changes of tax exemption for employees under the age of 26, the increase of old age pensions, and the raising of children benefits. The government’s plan to afford the hike is to remove the current cap on social security contributions for annual salaries over 142,900.
Poland’s government’s decisions to drastically raise minimum wage is an effort to rid itself of its reputation of being a source for cheap labor in hopes of attracting investors who can instead help build an economy based on innovation and modernization.
However, current predictions are that the minimum wage increase along with social security changes will cause net salaries to drop and cause company costs to rise.
For further information see our Poland payroll and benefits guide
The government in Estonia has reached an agreement that will transform the second pillar of the pension system – the individual account – into a voluntary program, as well as increase benefits. This change will allow for participants to continue to accrue money in the scheme, discontinue contributing to the scheme but keep accrued money in the fund, or stop making payments and withdraw the money they have accrued. If parliament approves, the plan is for the new reform to come into force January 1st, 2020. The change towards the program is the result of low investment returns and high management fees that have occurred since the introduction of the pension program.
The current pension program in Estonia is a built on a three-pillar system; state pension, individual accounts, and supplementary funded pension. The changes being made are towards the individual account that is funded by the employer and the employee. Currently employers contribute 4% of gross monthly payroll to the account and employees contribute 2%.
For further information see our Estonia payroll and benefits guide
On September 1st, 2019, Zurich approved the reform and will now be on the same federal cantonal tax law framework. This is in relation to a tax reform bill in Switzerland that will go into force January 1st, 2020, and will implement new measures enforcing all cantons be subject to the same federal taxation rate.
The key changes that will take affect due to the law change are:
For further information see our Switzerland-Zurich payroll and benefits guide