The Health Insurance Fund of Macedonia (HIF) director Sasho Klekovski says that the public debate on the minimum wage in the country is burdened with erroneous comparisons and incorrect conclusions.
In the context of the demands for the minimum wage to reach EUR 600 net and the claims that Macedonia is at the bottom in the region, Klekovski points out that the key problem lies in the mixing of net and gross wages, as well as in ignoring purchasing power parity.
The HIF head recalls that Eurostat, as a relevant European institution, uses gross wages and not net wages in comparisons, precisely to avoid the influence of different tax and social systems in the countries. He cites Montenegro as an example, which is often cited as a leader in the region with a minimum wage of 600 euros, but only in net terms. In gross terms, Klekovski notes, the minimum wage in Montenegro is approx. EUR 670, while in Macedonia it is EUR 586, which shows that the country is not at the bottom, as is often claimed.
The difference, according to Klekovski, stems from the structure of taxes and contributions. In Montenegro, the health insurance contribution is zero percent, the pension contribution is 10 percent, and the personal tax for wages up to EUR 700 is zero, which is significantly lower than in Macedonia. On the other hand, the value added tax there is 21 percent, compared to 18 percent in Macedonia.
Klekovski points out that Macedonia could also administratively increase wages by reducing contributions and taxes, but that would mean higher VAT and a higher cost of living.
