The Cabinet Ordnance no. 4/2017 for the changing and the addition of the Law no. 227/2015 regarding the Fiscal Code changes the way of determining the calculation basis for pension contributions, respectively the calculation basis for the contribution for health social insurance owed by the employer for the incomes derived from salaries or assimilated to salary incomes. General rule: the calculation basis for the pension social insurance and for health social insurance is the gross salary income derived monthly by the employees. As an exception from this rule, if the gross monthly income derived on the basis of an individual employment agreement with full or partial hours is under the level of the gross minimum national salary (1.450 lei/month currently), the monthly calculus basis of the contribution for the social insurance contribution (pensions) and for the health social insurance owed by the employers is the gross minimal national salary valid in that particular month. Specifically it will be paid CAS and CASS for an employment agreement with partial hours at the level of gross minimum salary and not at the value of that particular income.

       The payment of social contributions at the level of the gross minimum national salary will not be made for the period when the employees are in one of the following situations (exceptions):

They derive in the same month incomes from salaries or assimilated to salaries on the basis of two or more individual employment agreements, and their monthly cumulated calculation basis is at least equal with the gross minimum national salary – meaning that if the cumulated incomes from whatever number of employment agreements with partial work hours surpass 1450 lei the employer will not pay the increased contributions;

• They are high school or university students, with ages below 26, still studying;
• They are apprentices, according to the law, with ages below 18;
• They are retired at the age limit of the public pensions system;
• They are individuals with physical disabilities.

                      In order to be exempted from the payment of the increased contributions for pensions and health, the employers will request from the employees justifying documents for proving the coming under one of the categories: pupils, students, apprentices, individuals with physical disabilities entitled to a reduced work schedule of less than 8 hours/day, and individuals retired at reaching the age limit with the public pensions system. For those that are simultaneously employed with several employment contracts, regardless of their work norm, an Order of the Finance Ministry will establish the applicable procedure.

                      This change will be valid on August 1st, 2017 and it will be introduced starting with the incomes due to the month of August 2017.

This info is issued by ECOVIS Romania as an informing letter over the most important evolutions/changes in the legal and tax fields, and in the investment environment in Romania as well. The information, the analysis and the comments mentioned above are of generic nature and it is not the intention or the imperative of the issuer to be used as a substitute for professional consulting dedicated to individual cases. For advice concerning your specific situation, please contact us directly.

© ECOVIS Romania SRL – 2017