The new Act on the Right to the Winter Allowance and the Reform of Determining the Tax Base by Applying Flat-Rate Expenses (ZPZR) entered into force on 20 November 2025, while the provisions relating to flat-rate taxpayers and the tax base will enter into force on 1 January 2026. The Act on the Right to the Winter Allowance and the Reform of Determining the Tax Base by Applying Flat-Rate Expenses (ZPZR) introduces two key changes:
1. it establishes a mandatory winter allowance for all employees,
2. it reforms the flat-rate expense regime for sole proprietors and other natural persons performing business activities.
Below we present the most important novelties, deadlines, and obligations that employees, employers and sole proprietors must be familiar with.
Winter allowance (Christmas bonus) – amount and entitlement
The ZPZR introduces a new employee entitlement: the winter allowance, which must be paid by the employer in addition to the already existing annual leave allowance.
Amount of the winter allowance
The winter allowance amounts to one half of the minimum wage in the Republic of Slovenia and must be paid in cash.
Who is entitled?
All employees under the Employment Relationships Act (ZDR-1), part-time employees (proportionally), and public sector officials are entitled to the winter allowance. Employees whose employment lasted less than 12 months receive a proportional amount.
Deadline for payment of the winter allowance
The employer must pay the winter allowance no later than 18 days after the payroll period for November. If this day is a non-working day, the deadline is postponed to the next working day. A later payment is possible in the private sector – the deadline may be postponed by a collective agreement due to liquidity issues, but no later than 31 March of the following year. In the public sector, postponement is not permitted.
Special rule for 2025
Employers may pay one quarter of the winter allowance by 18 December 2025, and the remainder by no later than 31 March 2026. This exception does not apply to the public sector.
Taxation and social contributions
Income tax
The winter allowance is not included in the tax base up to the amount of one half of the minimum wage; any amount above this threshold is treated as part of the performance-related payment. For 2025, a special provision applies under which the winter allowance, up to the prescribed amount of one half of the minimum wage, is fully tax-exempt.
Social contributions
No pension and disability insurance contributions are payable on the winter allowance up to the amount of one half of the minimum wage. If the employer pays a higher amount, the difference is treated as another employment-related income.
Supervision and penalties
Supervision of the implementation of the Act is carried out by the Labour Inspectorate of the Republic of Slovenia (regarding payments) and the Financial Administration (FURS) regarding taxation and contributions. Failure to pay the winter allowance may result in substantial fines ranging from EUR 3,000 to EUR 20,000 for legal entities, with lower fines applying to smaller employers and responsible persons.
Major changes for sole proprietors – reform of the flat-rate taxation regime
The Act significantly modifies the flat-rate expense system, which will begin to apply on 1 January 2026. The tax base is determined as the difference between revenues and expenditures, similarly to corporate taxation, unless the taxpayer operates under the flat-rate regime. Flat-rate expenses may only be applied by a taxpayer who meets strict revenue thresholds (EUR 50,000 or EUR 120,000 with certain insurance conditions). Re-entry into the flat-rate regime is possible only after five years from exiting the regime. A special revenue verification mechanism is introduced, including verification of connected persons, in order to prevent abuse. Specific rules apply to agricultural holdings regarding activity holders.
New tax rate structure
Taxpayers will be taxed at a rate of 20% up to a specified tax base threshold (EUR 33,000 or EUR 72,000), and at 35% above that threshold. The tax is final and is not included in the annual income tax assessment.
Conclusion
The ZPZR introduces important social and fiscal changes. Employees gain a new statutory right — the winter allowance — which increases the overall annual remuneration standard. On the other hand, the Act represents the most comprehensive reform of the flat-rate expense system in the past decade, significantly affecting the operations of many sole proprietors. For employers, the Act introduces new obligations, while for the self-employed it raises the question of whether to remain within the flat-rate regime or switch to actual expenses.
