MEF/NOTE/018/10-2026: Note on the New Fiscal Code and the Disposable Income of Public Employees

Note MEF/NOTE/018/10-2026 explains the effect on take-home pay of the decree replacing the Fiscal Code of December 19, 2022. The income-tax brackets are widened, with the upper bound of the first bracket raised from HTG 60,000 to HTG 360,000 a year, which lowers the tax on salaries. At the same time, the withholding rate on pay other than salary and bonus, such as allowances, rises from 10% to 15%.

The note works through four police officers in specialized units with monthly salaries of HTG 39,200 to HTG 47,200, each also receiving a HTG 30,000 debit card, treated as a benefit in kind with no withholding, and a HTG 30,000 monthly allowance. Withholding on the allowance rises from HTG 3,000 to HTG 4,500. The monthly tax on salary falls by HTG 3,276 to HTG 4,104, about 75% and 65% for the lowest and highest profiles. Net of the extra withholding, the gain is HTG 1,776 to HTG 2,604 a month.

Adding the removal of the 1% salary levy for the local government fund (FGDCT), the total monthly gain is HTG 2,168, 2,438, 2,844 and 3,076 for the four profiles, or HTG 26,016 to HTG 36,912 a year at constant pay. The comparison covers only the tax withholdings shown and excludes contributions and other deductions.