Romanian employees work around 6 days a month in order to cover their payroll taxes due, almost two times more than employees in Ukraine.
The analysis takes into consideration all social contributions and income tax valid at the end of November in 6 countries in the region: Ukraine, Poland, Hungary, Slovakia, Romania and Czech Republic, owed by employees with a net salary of 1000 Euro, for a normal working schedule of 8 hours per day, in a month with 21 working days.
„The highest payroll taxes (we herein refer to all social contributions and income tax) are paid by employees in Hungary, followed closely by Czech Republic and Romania. Poland and Slovakia have almost the same level of payroll taxes owed by employees, while Hungarians pay the least. Because most of Romanian employees negotiate their salaries in net values, not many are aware of the actual difference between the gross and net salary, which actually represents the time they work in a month in order to cover their payroll taxes due to state authorities” explained Maria Cojocariu, Payroll Manager Accace Romania.
Therefore according to an analysis done by Accace, the value corresponding to around 34% of the time spent by Hungarian employees, around 7days, represents their actual payroll contributions and income tax due, compared to Romanian and Czech employees who work 30 % of the contractual time in month, around 6 days, in order to cover these taxes.
Next in top are Polish and Slovak employees, who work around 5 days, 25% of their working time, in order to cover their contributions and income tax owed for a net income of 1000 Euro. Due to the low level of social contributions due by employees in Ukraine, they are on the 5th place in our top, with 18%, around 3 days in a month worked exclusively to cover the payroll-related taxes.
How high are taxes owed by Romanian companies compared to other countries in the region?
If we take into consideration the total payroll contributions owed by an employer who pays to an employee a salary of 1000 Euro net, we will notice that their level in 5 of the 6 analysed countries is almost within the same range, between 400 and 500 Euros.
The country with the smallest employer contributions, that distinguishes itself from the 6, is Poland with less than 300 Euros.
“The high level of payroll contributions owed by the employees and employers could actually be considered a positive characteristic if the amounts paid to state authorities are reflected in the country’s economy and social services such as high retirement funds, proper public health services and relevant support in case of unemployment. But this could only be determined by the way these taxes are collected and administrated by local authorities” concluded Maria Cojocariu, Payroll Manager Accace.
Contact Maria Cojocariu Payroll Manager Maria.Cojocariu@accace.com