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Ping-pong with Social Contributions

In brief: • PM Mihai Tudose assured the public at large that the measure regarding the transfer of the social security contribution (CAS) and the healthcare contribution (CASS) payment obligation from the employer to the employee will not be enforced. • The Ministry of Public Finance contradicts him: the mandatory social contributions will be in charge of the employees as of 1 January 2018, however employers will still have the obligation to establish, retain and pay them to the social security budgets. • The minimum gross salary will constantly increase in the next three years. The social contributions will have to be paid in relation to the increased wages. • Romania could become the only EU country to have social contributions only from employees. No Member State uses this system. • The employers’ contributions have as aim to support those people who are not able to contribute to the social security system (students, pupils, pensioners). • In the same time, Gov’t sets CAS and CASS for part-time employees at the minimum wage level, in order to increase the incomes to the public budget. As a result, the employers will have to pay all contributions increased by 75% for part-time employees as of 1st of August 2017 (see the simulation below).

The situation today: At the moment, the employee and the employer separately pay the CAS and CASS, and they are in charge with other tax obligations. An employer must pay all contributions of 22,75% for an employee, and, in his turn, an employee separately pays the contributions of 16,5%. The level of mandatory social contributions is at 39.25%...

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