Romania: New Government Ordinance to set transitory tax rules for employees

According to the new fiscal regime part-time employees had to pay social contributions for the minimum wage that was established for a full-time monthly activity, leading to situation where the social contributions were extremely high. Also employees with disabilities and employees in the IT industry were subject to a different fiscal regime. Government Ordinance No. 3/2018 was issued in order to limit the negative consequences the new tax legislation had on specific types of employees. In order to maintain a comparable net wage for most of the employees, new rules on how social contributions are calculated were implemented. According to the new rules the number of employees that were negatively affected by the new Fiscal Code has been diminished. On the Government agenda for the next period is identifying solutions for other issues such as the diminishment of the income the employees receive when on medical leave (including pre and post natal medical leave) that was also affected by the new tax legislation.

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