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deAdela Cristea January 29, 2008

How much will cost us the salary in 2008?

2008 brought us many changes regarding both the level of some taxes and social contributions, and also the level of the minimum salary, on national economy level and also relate to some professional categories…

Considering these changes, the minimum salary on economy level in Romania has increased starting with January 2008 to 500 Lei, compared with 390 Lei in 2007. Based on the legislation changes brought by the Government Decision no. 1,507 issued on 12th of December 2007, the minimum gross salary on economy level will also increase again with July 1st 2008 to 540 Lei, in case that the main indicators on macroeconomic level, based on whom the budget is built, will be maintained (increase of the GDP, maintaining of the inflations within the estimated values, maintenance of the economic grow and work productivity).

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2008 brought us many changes regarding both the level of some taxes and social contributions, and also the level of the minimum salary, on national economy level and also relate to some professional categories…

Considering these changes, the minimum salary on economy level in Romania has increased starting with January 2008 to 500 Lei, compared with 390 Lei in 2007. Based on the legislation changes brought by the Government Decision no. 1,507 issued on 12th of December 2007, the minimum gross salary on economy level will also increase again with July 1st 2008 to 540 Lei, in case that the main indicators on macroeconomic level, based on whom the budget is built, will be maintained (increase of the GDP, maintaining of the inflations within the estimated values, maintenance of the economic grow and work productivity).

2008 brought us many changes regarding both the level of some taxes and social contributions, and also the level of the minimum salary, on national economy level and also relate to some professional categories…

Considering these changes, the minimum salary on economy level in Romania has increased starting with January 2008 to 500 Lei, compared with 390 Lei in 2007. Based on the legislation changes brought by the Government Decision no. 1,507 issued on 12th of December 2007, the minimum gross salary on economy level will also increase again with July 1st 2008 to 540 Lei, in case that the main indicators on macroeconomic level, based on whom the budget is built, will be maintained (increase of the GDP, maintaining of the inflations within the estimated values, maintenance of the economic grow and work productivity).

This minimum gross salary is to be considered for a full time job with an average working schedule of 170 hours/month. Regarding the average gross salary considered for the calculation of the amounts for retirement, decease or maternity allowance, these will increase to 1,550 Lei, based on the Law 387/2007.

The contributions to the social security, meaning the percentages calculated to the gross salary that the employer and the employee have to pay to the state, have been also modified as it follows:

  • Employers contribution to the pension CAS remain 19,50% until 1st of December 2008. After this date it will decrease to 18%;
  • Employees contribution to the unemployment fund will decrease starting with 01/01/2008 to 0.5%, compared to 1% in 2007;
  • Employees contribution to the health fund will decrease from 6.5% to 5.5% starting with the 1st of July 2008 until the end of the year;
  • Employers contribution to the unemployment fund will decrease from 2% to 1% starting with the 1st of January 2008 and to up to 0.5% from the 1st of December 2008;
  • The contribution to the insurance against labor accidents and professional diseases will have a maximum limit of 2% starting with the 10/01/2008, compared to 3.6% as it was until now. This means that based on the professional risk that the employee is facing at work the company will pay between 0.4% and 2% of the gross salary for this type of insurance;
  • The average gross salary has increased from 1,270 to 1,550 lei.

All the employers, no matter in which field of activity they are active, are obliged by the law to pay at least the minimum salary guarantied at economy level. This means that for a working schedule of 8 hours/day, 5 days/week, the employees will get a net salary of minimum 348 Lei.

As we can notice, even that the taxation related to salaries is still maintained at a high level, this is registering a decrease tendency in 2008. Considering the easy decrease of the taxes relates to social charges, unemployment, CAS, CASS or accidents insurance, it is possible that some companies will use these savings in order to increase the salaries of the most performing employees.

We summarize below the new values of the taxes and social charges and the dates when those are becoming active.

 
Employers Contributions
CAS (pensions) 19.5% respectively 18.0% starting with 1st of December 2008
Health 5.5% respectively 5.2% starting with 1st of December 2008
Unemployment 1.0% respectively 0.5% starting with 1st of December 2008
The found against working accidents between 0.40 – 2.00% (based on the CAEN code – object of activity)
Leaves and allowances 0.85%
Labor institution contribution 0.75% or 0.25% based on the location where the labor books are kept (respectively the labor Institution or the employers headquarter)
The found for the guarantee of the salaries 0.25%
Total Employers Contributions minimum 27.25% – maximum 28.85% of the gross salary
 
Employees Contributions
CAS (pensions) 9.50%
Health 6.50% respectively 5.50% (starting with 1st of July 2008)
Unemployment 0.50%
Salary tax 16% from the net revenue (the gross revenue diminished with the total contributions and the personal deduction)
Total Employees Contributions minimum 29.50% of the gross salary