Last updated: 25 September 2014
Social security contributions paid by Romanian employers corresponded, until September 2014, to two thirds of the total contribution paid to the social security budget. In order to reduce the pressure of the tax burden borne by the employer, the Government initiated a bill designed to reduce contributions paid by employers by 5%. Law no. 123/2014 comprising this amendment was passed by the Parliament in September 2014 following long debates, further to the request made in July 2014 by the President of Romania for the reexamination of this Law. The reduction of the employer’s contribution to the social security budget shall enter into force at the beginning of October 2014.
These latest legal changes, as well as other information regarding labour law are presented to you briefly hereunder:
Reduction of the Social Security Contribution (CAS)
The cumulated percentage (employer-employee) of the contribution paid to the social security budget differs depending on the work conditions. Until now, the compulsory contributions to the social security budget paid by employers and employees were the following:
- 31.3% for normal work conditions, out of which 10.5% paid by the employee and 20.8% paid by the employer
- 36.3% for particular work conditions, out of which 10.5% paid by the employee and 25.8% paid by the employer
- 41.3% for special work conditions and for other types of work conditions, out of which 10.5% paid by the employee and 30.8% paid by the employer
Following the entry into force of Law no. 123/2014 amending the Fiscal Code, the employees’ and employers’ contributions to the social security budget were reduced by 5%, but this cut only operates in favour of the employer, as the rate to be paid by the employee remains 10.5%. The contributions to the social security budget shall apply starting from the revenues corresponding to October 2014:
26.3% for normal work conditions, out of which 10.5% paid by the employee and 15.8% due by the employer
31.3% for particular work conditions, out of which 10.5% paid by the employee and 20.8% due by the employer
36.3% for special work conditions and for other types of work conditions, out of which 25.8% due by the employer
The calculation basis to which the employer’s contribution is applied is limited to the amount representing the product between the number of employees and the threshold of 5 times the average gross wage (namely 2,298 Lei) provided by the Law on the social security budget.
We are Reminding you that…
As of July 1st, 2014, the basic minimum gross wage at the national level is of 900 Lei (approximately 200 Euros), in accordance with Government Decision no. 871/2013, whereas the average gross wage provided in the public social security budget is 2,298 lei (approximately 520 Euros).
As regards lunch tickets granted to employees, their value is the same since 2013: 9.35 Lei.