20.2 C
Bucharest
October 22, 2021
BUSINESS

Gov’t approves social insurance contributions cut by 5 pc

Romania to have second-lowest costs in region following this measure.

The government approved during its meeting yesterday the draft law concerning the modification of the Fiscal Code, in the sense of lowering the social insurance contributions (CAS) by 5 percentage points on October 1, Ministry of Public Finances informed in a press release, depending on working condition. The draft law will be sent to Parliament as fast as possible, where it will be adopted by the Senate in an emergency procedure and by the Lower Chamber in early July, Premier Victor Ponta announced.

Thus, the CAS cut is from 20.8 percent to 15.8 percent for normal working conditions, from 25.8 percent to 20.8 percent for difficult working conditions and from 30.8 percent to 25.8 percent for special working conditions and other conditions of employment.

The lowering of the CAS measure points to 15.8 percent would place Romania second in the region when it comes to the lowest social insurance costs, behind Slovakia (CAS of 14 percent) and ahead of Poland (16.26 percent), according to a survey authored by the Accace business externalization and consultancy company. The three aforementioned countries are followed by the Czech Republic (21.5 percent) and Hungary (27 percent).

“The CAS reduction by 5 percentage points, to be applied from October 1, is particularly encouraging as it will not trigger an increase in other taxes or a change in the maximum ceiling, according to officials’ statements. Thus, employers will see the change as a real step towards balancing the social contribution in Romania to that of other countries in the region,” said Maria Cojocariu, Payroll Manager Accace in Romania.

For an employee with a gross salary of RON 1,000 his employer currently pays a CAS of RON 208, that value being set to drop to RON 158 after the cut is introduced.

In what concerns the total contributions owed by employers, the lowering of the CAS would place Romania on second place in the region again, with a deduction quota ranging from 22.75 to 23.45 percent. Poland is first in the region with employer deductions ranging from 19.48 to a maximum of 22.67 percent of the salary fund, depending on the contribution to the handicap fund for persons with disabilities.

Even if this measure is applied, Romania would continue to register one of the highest pension contributions paid by employers in the region, namely of 10.5 percent, compared to a pension contribution of 4 percent in Slovakia and 6.5 percent in the Czech Republic, Accace informs. Poland has the highest costs when it comes to the payment of pensions, each employee contributing 11.26 percent of its gross salary to the social insurance fund.

 

Related posts

Nestlé Romania and Junior Achievement help 400 high school young people acquire entrepreneurial skills

NINE O'CLOCK

Cluj-Napoca and Timisoara included in Urban Transport application powered by Vodafone

Nine O' Clock

Alpha Bank clients have new protection option available

Test