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Fiscal changes regarding salary income and social contributions

A series of changes referring to income from salaries, as well as social contributions, came into force as a result of the amendments to the Fiscal Code through the Emergency ordinance no. 115/2023 regarding some fiscal-budgetary measures in the field of public expenditures, for fiscal consolidation, combating fiscal evasion, for the modification and completion of some normative acts, as well as for the extension of some deadlines. 

The normative act modifies the Fiscal Code as follows:

Salary income

Salary tax facilities. If, during the same month, the natural person earns income from wages and wages assimilated to wages for a fraction of the month, in the basic position, at one or more successive employers, for the application of the income tax exemption, each employer sets the part of the ceiling of 10,000 monthly lei corresponding to this period and grants the exemption for the monthly gross income achieved, within the limit of the fraction of the ceiling.

[NOTE: applies from January 2024 income onwards].

Daytime ceilings. In the case of the delegation/posting allowance and allowances as well as any other amounts of the same nature (other than those granted to cover transport and accommodation expenses received during the period of travel to another locality), the ceiling of the 3 salaries/remunerations is calculated separately for each month separately, and the result is multiplied by the number of days corresponding to each month of the delegation/secondment period.

[NOTE: applies from the date of publication – 15.12.2023].

Sports facility subscriptions. The value of subscriptions for sports facilities is deductible up to the equivalent of 100 euros annually. This amount is non-taxable income if, combined with other income, it does not exceed 33% of the basic salary.

[NOTE: applies from January 2024 income onwards].

Non-taxable income ceiling. The amounts paid by the employer for the early education of the employees’ children are no longer included in the category of fully non-taxable income.

These incomes are accumulated with non-taxable incomes capped so that they do not exceed 33% of the basic salary.

[NOTE: applies starting with January 2024 income; According to the Pre-University Education Law no. 198/2023, the first level of pre-university education is represented by early education (3 months-6 years), consisting of preschool education (3 months-3 years) and preschool education (3-6 years), both comprising the small group, the middle group and the large group].

Rules regarding the recognition of certain revenues

These rules also apply to the calculation of social contributions and income tax, as follows:

a) The sums representing the consideration of tourist and/or treatment services, including transport, during the leave period, for own employees and their family members: are income related to the month in which the statement is approved, respectively income related to the month in which they are granted, in the situation in which there is no obligation to present supporting documents.

b) The amounts representing the contributions to an optional pension fund borne by the employer for its own employees – are income related to the months corresponding to those for which the payment was made, based on the supporting documents.

c) The sums representing the voluntary health insurance premiums, as well as the medical services provided in the form of a subscription borne by the employer for its own employees – are income related to the months corresponding to those for which the payment was made, based on the supporting documents.

d) The sums representing the counter value of the subscriptions borne by the employer for its own employees, – are income related to the months corresponding to those for which the payment was made, based on the supporting documents.

e) The sums borne/granted by the employer for the placement of the children of its own employees in early education units, according to the law – are income related to the months corresponding to those for which the payment was made, based on the supporting documents.

The tax due in the case of the above amounts is calculated and withheld by cumulation with the income from wages and salaries related to the month in which the income is considered, and the payment of the tax to the state budget is made monthly or quarterly.

[NOTE: Rules apply from January 2024 earnings]

Deductions from taxable income. When establishing the calculation basis for the salary income tax, the ceiling of 400 euros is reduced so that the following will be taken into account:

a) the value of subscriptions for the use of sports facilities, borne by the employee, within the limit of 100 euros.

[NOTE: applies from January 2024 earnings]

b) In the period January-December 2024, the deduction of a non-taxable amount of 200 lei from the taxable income continues to be applied for employees who receive the minimum gross salary for the economy, without exceeding 4,000 lei/month.

 Social contributions

Additional clarifications CAS calculation for programmers/construction/agriculture. For people who earn income from wages as a result of the activity of creating computer programs, the CAS rate is reduced by the percentage points corresponding to the contribution rate to the privately administered pension fund.

The provision applies until December 31, 2028, at the place where the basic function is located, for monthly gross incomes up to and including 10,000 lei, obtained from wages and assimilated to the wages earned by the natural person based on an individual employment contract, report of service, act of delegation or secondment or of a special status provided by law, as the case may be.

The part of the monthly gross income that exceeds 10,000 lei does not benefit from tax benefits.

[NOTE: applies from 15 December 2023].

The private pension option. Individuals who earn income from wages and salaries in the computer software creation sector, the construction sector, the agricultural sector and the food industry can opt for the payment of the contribution due to the privately administered pension fund. The option is submitted in writing to the employer, who retains the related contribution according to the legal provisions, starting with the income of the month following the one in which the option was registered. The natural persons mentioned above can renounce the option expressed according to the previous provisions, by submitting a written request to the employer. This applies starting with the income related to the month following the submission of the request. The rules regarding the exercise of the previously indicated rights are established by the employer through the internal regulation or, as the case may be, through another internal document issued by it. [NOTE: applies from January 2024 income onwards].

Amounts included in the basis for calculating social contributions. The amounts granted to employees who carry out telework activities (amount of 400 lei/month) are included in the basis for calculating social contributions.

[NOTE: applies from January 2024 earnings]

Ceiling 33% salary income. The following are included in this ceiling, starting with the income of January 2024:

a) the counter value of subscriptions borne by the employer for its own employees, within the limit of the equivalent in lei of 100 euros per year for each person (previously 400 euros).

b) the favorable difference between the preferential interest rate established by negotiation and the interest rate charged on the market, for loans and deposits;

[NOTE: applies to the entities that fall within the scope of granting these financial instruments]

c) the amounts paid by the employer for the early education of the employees’ children, according to the provisions of the income tax.

Excluded from this ceiling, starting with the income of January 2024, are the amounts granted to employees who carry out telework activities.

CASS for sick leave allowances. Persons who are on medical leave granted according to O.U.G. no. 158/2005 are no longer exempted from CASS payment for allowances related to medical certificates. The monthly calculation base of the CASS is the amount of the social health insurance allowance that natural persons benefit from.

[NOTE: applies from January 2024 health benefits]

Non-payment of the amount of 200 lei. In the period January-December 2024, the deduction of an amount of 200 lei from the basis for calculating social contributions continues to be applied for employees who receive the minimum gross salary for the economy, without exceeding 4,000 lei/month.

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