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May 8, 2021

FinMin Teodorovici: Employees in IT to benefit from compensation mechanism to cover for contribution transfer related loss

While giving up the state aid for employees in the IT field and other categories of employees after transferring contributions from employers to employees since January 1, the Romanian authorities are proposing an withholding mechanism instead, as compensation for such categories, as the Minister of Public Finance, Eugen Teodorovici, made an announcement on Tuesday.

“Those employers having ensured the increase of the salaries for their employees (such as individuals with severe disabilities, programmers and persons working in research-development and also seasonal employees) by at least 20 per cent, in order to cover for the loss generated by the transfer of the contributions from employers to employees, can benefit from this new mechanism. And I said that the system should be as simple as possible. The state aid scheme we were talking about could have generated certain difficulties in administrative terms. That’s why we opted instead for another mechanism, which says that those employers who transferred the minimum 20 per cent for the employees to be able to withhold from the beneficiary employees a part of the due CASS, so that their net salary, including here workers in IT and other categories, will remain at the same level in 2018 as it was in 2017,” Teodorovici told Digi 24.

He also explained the steps the employers must take in order to benefit from this mechanism.

“Basically, the employers partially withhold the money and they only declare as payment obligation in the 112 form the amount they withheld from the employees. The difference in CASS due by the employee is calculated by the employer and clearly highlighted in the 112 form as deducted amount, while this deducted amount, which is the difference between what the employer transfers and how much he receives, so that he will not have differences compared with 2017, is borne by the state budget, as being automatically transferred to the single health insurance fund,” specified the Minister of Finance.

According to him, the employers will be able to recover their money for January.

The Ordinance stipulates that, as of January 1, until the coming into force of this Ordinance, employers will be able to submit corrective statements and no employee will lose any money. For the employers there will be no budget efforts and for the state is very simple,” said Teodorovici.

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