Starting with January 1st, 2018, the following changes will take effect:
The reduction of the number of social contributions
Social Insurance Contribution
Pension contribution will be payable by employees or persons for whom the social security contribution for normal work conditions is mandatory, at a rate of 25%. The employer may owe an additional share if there are difficult working conditions (4%) or special working conditions (8%).
Health Insurance Contribution
The ordinance provides for a 10% rate of health insurance contributions, due by employees or other natural persons who are required to pay this contribution.
Work Insurance Contribution
The work insurance contribution of 2.25% is due by employers or persons assimilated to employers for salary and salary-related income.
This contribution will include the other existing social contributions: contributions to unemployment funds medical leave contribution, medical professional risks and claims and outstanding debts fund.
Note! The contribution to the solidarity fund is governed by the Law no. 448/2006 on the protection and promotion of the rights of persons with disabilities which has not been changed. As a result this contribution will remain in force in the year 2018.
Companies which have at least 50 employees have an obligation to employ people with disabilities in a percentage of at least 4% of the total number of employees. Starting with September 1st of 2017, the companies that do not employ people with disabilities under the conditions laid down above shall pay monthly to the State Budget a sum representing the minimum gross basic salary in the country guaranteed for payment multiplied by the number of jobs in which persons with disabilities are not employed.
Conclusion:
Income tax will decrease from 16% to 10%.
The ordinance stipulates the reduction of the tax quota from 16% to 10% for the incomes from independent activities, wages and assimilated to salaries, investments, pensions, in agriculture, forestry and fisheries, prizes and from other sources, except incomes in respect of which the Fiscal Code provides for different rates.
The granting of personal deductions for Romanians with gross wages of less than 3,600 lei.
Employees with a gross salary of up to 3,600 lei could benefit from personal deductions, compared to 3,000 lei, as it is today.
Regarding the employees with a gross monthly income of less than 1,950 lei (compared to 1,500 lei, as at present), the personal deduction will be 510 lei, rising from 300 lei, if the respective employee has no dependents.
Then, for every person dependents (husband, wife, children, etc.), there will be 160 lei extra deduction, compared to 100 lei, as it is today.
Although social contributions and tax are apparently decreasing as a percentage, in case if employers choose to increase employees’ wages as a result of passing social contributions on employees, the basis on which the new percentages will apply will be increased and implicitly the amounts collected to the budget with the title of social contributions will be higher. The tax cut from 16% to 10% is meant to counterbalance the increase of contributions, so that the net salary value will not be significantly affected.
MEASURES IMPLEMENTED TO SUPPORT THE GOVERNING PROGRAM 2017-2020
In the Official Gazette no. 902/16.11.2017 has been published the Government Emergency Ordinance 82/2017, for modifying and completing several normative acts.
Temporary modification of the republished Law of Social Dialogue No 62/2011
In all establishments in which there are no collective agreements/contracts concluded, regardless of the number of its employees (including those with less than 21 employees), the initiation of collective negotiation is mandatory in the period 20 November – 20 December 2017, for the implementation of the provisions of the Government Emergency Ordinance no 79/2017 for the amendment and completion of the Law no. 227/2015 regarding the Fiscal Code.
In all establishments in which there are collective agreements/contracts concluded is compulsory a collective bargaining of the addendums and collective agreements in force for the implementation of the provisions of the Government Emergency Ordinance no. 79/2017 for the amendment and completion of the Law no. 227/2015 regarding the Fiscal Code during the period 20 November – 20 December 2017
The increase of pension set point in Law no. 263/2010 on the unitary system of public pensions
With effect from July 1st of 2018 the pension set point value shall be increased by 10% and is 1,100 lei.
Modification of the Law no. 411/2004 on privately managed pension funds
With effect from January 1st of 2018 the rate of contribution to the pension fund is 3.75%.
Changing the minimum limit from Government Emergency Ordinance no. 111/2010 concerning maternity leave and monthly allowance for child raise
According to the Law of social assistance no. 292/2011, with subsequent amendments and supplements, the amount of the benefits of social assistance shall be determined in relation to the social indicator of reference. In view of this, it is necessary the correlation of the minimum amount of the allowance for child raise with other benefits of social assistance and reporting it to the social indicator of reference.
Starting with the rights of January 2018 monthly allowance may not be less than the amount resulting from the application of a coefficient of multiplication of 2.5 to the value of the social indicator of reference. In the present, the value of the reference social indicator is 500 lei in accordance with Article 331 of the Law no. 76/2002 regarding the unemployment insurance system and stimulation of employment, with subsequent amendments and supplements. Until the entry into force of this amendments the minimum value of the allowance shall be 85% of the amount of the minimum gross wage in the country guaranteed payment.
The monthly allowance shall be established at the rate of 85% of the average net income made during the last 12 months from the last 2 years prior to the date of birth of the child and may not be less than 8,500 lei as until now.
Starting with the second child from a pregnancy with twins, triplets or multiple, the amount of the monthly allowance shall be increased by the amount resulting from the application of a coefficient of multiplication of 2.5 to the value of the social indicator of reference.
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