Meal vouchers and holiday vouchers will be surcharged from 1 January 2024

Law 296/2023 on some fiscal and budgetary measures “to ensure Romania’s long-term financial sustainability” was published in the Official Gazette on 27 October 2023 and provides for the taxation with CASS (10%) of meal vouchers and holiday vouchers granted by employers to workers, starting with the income of January 2024. Basically, this means that employees who have these benefits will receive 10% less, starting with income for January 2024.

How are they charged now and what is the value of meal vouchers?

At the moment, meal vouchers are exempt from social security contributions. For the employee, however, income tax (10%) applies and for the employer, meal vouchers are deductible expenses.
The maximum value of a meal voucher is 35 lei from 1 August 2023, rising to 40 lei from 1 January 2023 under Emergency Ordinance No 69 of 27 July 2023.

It should be noted that employers are not obliged to grant vouchers of nominal value up to the maximum allowed by law, so an employer may also grant vouchers of lower values.

How are they now taxed and what is the value of holiday vouchers?

At the moment holiday vouchers are exempt from paying social security contributions. For the employee, however, income tax (10%) applies and for the employer, holiday vouchers are deductible expenses.

Employers may grant holiday vouchers up to a maximum of six gross minimum wages per country, guaranteed in payment, during a tax year.

Will these benefits still pay off?

The legislative change which will apply a 10% CASS tax to these benefits in addition to the 10% tax currently applicable makes the state the only winner. Both employees and employers stand to lose.

On the profitability of these benefits, although they will be overtaxed from 1 January 2024, both benefits are STILL a good option instead of a pay rise because they are exempt from CAS (25%).