Monday, 22 September:
No. 123/2014 Law officially enters into force, diminishing with 5% one of the most important social contribution owed by Companies. Thus starting with October salary rights, Romanian companies will no longer pay 20, 8% as Pension Contributions but 15, 8%.
Law no. 123 / 2014 was published in Official Monitor no. 687 din 9/19/2014 and brings amendments to Romanian Fiscal Code provisions.
Thus, according to art. 1 within above normative act, please find below new applicable percentage:
“a1) 26, 3% for normal work conditions, from which 10, 5% for individual employee contribution and 15, 8% for company social contribution;
a2) 31, 3% for special work conditions, from which 10,5% for individual employee contribution and 20,8% for company social contribution;
a3) 36, 3% for special work conditions and other conditions, from which 10, 5% for individual employee contribution and 25, 8% for company social contribution “
Above presented amendment will not have a direct involvement in your employee salaries, as it is a measure applicable for companies’ social contribution not individual employees’ social contribution.Therefore we cannot refer to it as an automatically trigger for raising or diminishing your employees gross salary.
The most immediate effect will be a diminished amount to be owed by companies as social contribution, to the Romanian State Budget.For a much clearer overview of the numbers, please find below a comparative simulation, made based on new versus old social contribution percentage (normal working conditions). We will refer to a 1.500 RON gross salary, and conclude that the company will owe 75 RON less.
Thus, the companies will save 75 RON for each employee with a 1.500 RON gross salary.
Old percentage CAS 20,8%
| Gross salary in RON | 1500 |
| Employee social contribution 10,5% | 158 |
| Employee unemployment contribution 0,5% | 8 |
| Employee health contribution 5,5% | 83 |
| Deductions | 190 |
| Income tax 16% | 170 |
| Net Salary | 1081 |
| Total employee contributions | 419 |
| Company social contribution 20,8% | 312 |
| Company sick leave contribution 0,85% | 13 |
| Company unemployment contribution 0,5% | 8 |
| Company guaranty fund contribution 0.25% | 4 |
| Company health contribution 5,2% | 78 |
| Company work accidents fund 0,150% | 2 |
| Total company contributions | 417 |
| Total company cost | 1917 |
New percentage CAS 15,8%
| Gross salary in RON | 1500 |
| Employee social contribution 10,5% | 158 |
| Employee unemployment contribution 0,5% | 8 |
| Employee health contribution 5,5% | 83 |
| Deductions | 190 |
| Income tax 16% | 170 |
| Net Salary | 1081 |
| Total employee contributions | 419 |
| Company social contribution 20,8% | 237 |
| Company sick leave contribution 0,85% | 13 |
| Company unemployment contribution 0,5% | 8 |
| Company guaranty fund contribution 0.25% | 4 |
| Company health contribution 5,2% | 78 |
| Company work accidents fund 0,150% | 2 |
| Total company contributions | 342 |
| Total company cost | 1842 |
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