We would like to bring to your attention significant changes in salary tax calculation recently adopted by the Romanian Government through Emergency Ordinance (OUG) no. 115/2023, published in the Official Gazette, series 1139/15.12.2023.

These changes will come into effect from January 1, 2024, impacting various aspects of employee benefits.

Key Changes:

Capped Early Education Benefit:

The amount granted for early education is capped at 1500 lei per child per month.

Limited Private Scholarship:

Private scholarships granted according to Law no. 376/2004 are capped at 1500 lei per scholarship.

Clarification of IT Exemption:

For IT professionals earning salaries for a fraction of the month, the procedure for granting the exemption is clarified. Each employer determines the part of the monthly limit of 10,000 lei corresponding to that period and grants the exemption for the gross monthly income, within the fraction of the set limit.

Capped Sports Benefit:

The benefit granted for sports activities is capped at 100 euros per year.

Threshold business travel allowance:

The delegation allowance is capped at 3 basic salaries, calculated separately for each month, taking into account the number of working days and the period of delegation/secondment/conducting activities in another location.

Taxable Income – remote work allowance:

For remote work allowances, contributions for pension, health insurance, and income tax will be calculated, making it a fully taxable income.

Delegation Allowance as Income:

The delegation allowance is considered income in the month of the expense report approval.

Tourism Services Treated as Income:

The value of tourism services is considered income for the months in which the expense report is submitted or in the month in which they are granted, in the absence of supporting documents.

Income Assimilated to Benefits:

Contributions for voluntary pension funds, voluntary health insurance, the value of sports subscriptions provided by employers, and amounts granted for early education are considered income assimilated to the months for which payment has been made, based on supporting documents.

Extended Health Insurance Contribution:

Health insurance contributions are also due on sick leave allowances granted according to Emergency Ordinance no. 158/2005.

These changes will require a thorough review of your company’s payroll policies and practices. Should you have any questions or require further clarification, please do not hesitate to reach out.