Millions of private sector workers across Greece began seeing an immediate boost in take-home pay this month, as a sweeping overhaul of the income tax code took full effect to start 2026.
The increase involves no nominal wage hikes but stems from a restructured tax scale that lowers withholding rates across most brackets.
The reforms, which apply retroactively to Jan. 1, offer aggressive relief for families and young professionals in an effort to counter "brain drain" and support household incomes.
Public sector employees, who are paid bi-weekly, saw the adjustments in their first January installments, while private sector workers are now seeing the impact as the new withholding rates apply to this month's payrolls.
At the heart of the reform is a general reduction of tax rates by 2 percentage points for annual incomes between 10,000 and 40,000 euros ($10,500–$42,000).
A new intermediate tax bracket has also been introduced, taxing income between 40,000 and 60,000 euros at 39 percent, while the top rate of 44 percent now applies only to earnings exceeding 60,000 euros.
Because the cuts begin at incomes as low as 10,000 euros, even minimum-wage earners will benefit from lower monthly withholding.
Families with children are set to receive the most significant relief through a new sliding scale. For income between 10,000 and 20,000 euros, the standard 20 percent tax rate drops to 18 percent for taxpayers with one child, 16 percent for those with two children, and just 9 percent for families with three children.
Households with four or more dependent children will see their tax rate eliminated entirely for income up to 20,000 euros.As an example, a worker earning 21,000 euros with two children will save approximately 660 euros annually, adding about 47 euros to their monthly net pay.
To retain young talent, the government has eliminated income tax entirely for workers under 25 earning up to 20,000 euros.
For a typical employee earning 1,000 euros a month, this translates to an annual gain of roughly 1,043 euros.
Workers aged 26 to 30 also benefit, paying a reduced rate of 9 percent on income between 10,000 and 20,000 euros—previously taxed much higher—yielding potential annual savings of nearly 1,200 euros.
The overhaul marks one of the most significant revisions to the tax scale in a decade, shifting government policy away from one-off bonuses toward structural income support.