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Starting October, pension contribution applied for companies is now reduced to 15, 8% in Romania

19 Sep 2014

 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
 
 
 
Contact:
Maria Cojocariu
Payroll Manager
Tel:+ 40 314 050 440
Mobil:+40 75 230 5330
maria.cojocariu@accace.com    

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Originally established in Central and Eastern Europe in 2006, Accace ranks among the leading outsourcing and consultancy providers in the region. Engaging over 600 experts, we have vast experience with handling small to large scale, multi-country outsourcing projects and providing a comprehensive range of our services to over 2,000 customers.

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Accace operates internationally as Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience. Covering almost 40 jurisdictions with over 2,000 professionals, we support more than 10,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and process at least 170,000 pay slips globally.

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