Minimum wage changes from January 1, 2025

The Official Gazette no.1185 of November 28, 2024 published the Romanian Government Decision no.1506 of November 27, 2024 for the establishment of the minimum gross basic salary guaranteed in payment. Thus, as of January 1, 2025, the minimum gross basic salary per country guaranteed in payment increases from RON 3,700, as it is currently, to RON 4,050 gross monthly “As of January 1, 2025, the minimum gross basic salary per country guaranteed in payment is set in cash, not including bonuses and other allowances, at the amount of RON 4,050 per month, for a normal working average of 165.334 hours per month, representing 24.496 lei per hour.”

The increase in the minimum gross basic salary guaranteed in payment represents an increase of 9.46%, which in absolute terms means 350 lei gross. It remains to be seen whether the government will also come up with a normative act to extend the facility of 300 lei untaxed on the minimum wage. On a gross salary of 4,050 lei, the employee would get 2,574 lei in his or her hand, if the 300 lei untaxed facility is maintained as it is at present. The total cost borne by the employer would be 4,134 lei.

According to the law, the minimum gross guaranteed basic salary set by Government decision may be granted to an employee for a maximum period of 24 months from the date of conclusion of the individual employment contract. After the expiry of this period, the employee shall be granted a basic wage higher than the guaranteed gross national minimum basic wage.

According to the Romanian Ministry of Labor, there are 843,668 employees in Romania on the guaranteed gross minimum wage, which represents approximately 15.4% of the total number of active employees. However, the increase in the minimum basic wage to RON 4 050 will benefit all employees earning less than RON 4 050 per month, i.e. 1 823 520 employees.

The guaranteed gross minimum basic national minimum wage, corresponding to normal working hours, is set by Government decision, after consultation with trade unions and employers. If the normal work schedule is, by law, less than 8 hours per day, the minimum gross hourly basic wage is calculated by dividing the minimum gross basic wage by the average number of hours per month according to the approved legal work schedule.

Increasing the gross minimum wage always has a much more complex impact on the private sector, because it leads to an increase in expenditure. Most state institutions do not have employees on the minimum wage, which means that they will not incur additional expenses. The government also gains from this, because higher wages mean higher taxes and higher contributions to the health and pension budgets.