Social security expenses in Romania

Social security expenses in Romania

Romania is a country where social security contributions are rather expensive. Social charges are calculated on the gross monthly salary and are paid to the National Tax Administration Agency, located in Bucharest.

The calculation of social charges was profoundly modified in 2018 since a reform in the Romanian tax Law the operated a transfer of employer social charges into the gross salary. Employers' social security contributions will thus be significantly reduced from 35% to 2.25%, while employee contributions have increased to 35%.

Rates of social security contributions

Here is a table of employer and employee social security contributions in force on April 1, 2023:

The Romanian minimum wage, which was still at 1,450 RON gross per month (i.e. approximately 320 EUR) in 2017 has increased several times to now (since January 1, 2023) reach 3,000 RON per month (i.e. approximately 610 EUR).

Payroll tax is withheld at the rate of 10%. Employees, however, benefit from a deduction which can vary between 510 and 1,210 RON per month depending on the number of dependents. The deduction is full if the salary is less than 1,950 RON per month and degressive for salaries between 1,951 and 3,600 RON.

The employer can also pay part of the salary in the form of non-taxable and non-contributory income, within the limit of 35% of the employee's total salary. These incomes include non-taxable and non-contributory may be: meal vouchers (up to a limit of one check per day, accommodation (up to a limit of 20% of salary), remuneration paid under a mobility clause, contributions to optional pension funds and subscriptions for private health insurance services (up to a limit of EUR 400 per person per year), and telework allowance (up to a limit of RON 400 per month).

Certain categories of employees, such as IT specialists (provided they are working as software development engineers) and construction (or agricultural) workers, can benefit from a wage tax exemption.

Who contributes to Romanian social security?

Any resident of Romanian territory, whether employed or self-employed, contributes to the general social security system, which protects against the risks of illness, maternity, invalidity, old age and death. It should be noted that the self-employed are covered by disability, old-age and death insurance on the condition that their average net monthly income is greater than 35% of the average gross salary.

With regard to occupational accident, occupational disease and unemployment insurance, these are compulsory for employees and assimilated persons. Self-employed persons can join voluntarily.

Alongside the general social security regime, there are special regimes, for example for notaries.