The provisions of Law No. 296/2023 regarding certain fiscal-budgetary measures to ensure Romania’s long-term financial sustainability will apply starting with the income of November. The IT sector is the first category of employees that will be affected by these changes.

The income tax exemption that IT workers have enjoyed since the early 2000s will apply to the primary place of employment for gross monthly incomes up to 10,000 lei, inclusive, derived from salaries and salary-like income earned by the individual.

The portion of the gross monthly income that exceeds 10,000 lei will no longer benefit from tax exemptions.

The CAS contribution has been reduced by 3.75%, which represented the employee’s contribution to the Second Pillar. This percentage will increase to 4.75% starting January 1, 2024.

Employees can still opt for a full CAS rate of 25%. This option must be submitted in writing to the employer, who will withhold the corresponding contribution according to legal provisions, starting with the income of the month following the month in which the option was registered (for example, for the option to be considered in November, it must be expressed in October).

The tax exemptions will apply until the end of 2028.

How will the calculation method change, and what will the net income amount to for IT employees? Below are two calculation scenarios:

Starting with a gross income of 20,000 lei.

Before the publication of Law No. 296/2023 in the Official Gazette, the net income calculation for IT employees was as follows:

– Gross salary according to the employment contract: 20,000 lei
– CAS (25%): 5,000 lei
– CASS (10%): 2,000 lei
– Net Salary: 13,000 lei

After the entry into force of Law No. 296/2023, starting with the income of November 2023, IT employees have the following two scenarios:

Scenario 1: The employee did not submit a request for the Second Pillar contribution (CAS 21.25%)

– Gross salary according to the employment contract: 20,000 lei
– CAS (21.25%): 4.625 lei
– CASS (10%): 2,000 lei
– Income tax: 669 lei
– Net Salary: 12.706 lei

Scenario 2: The employee submitted a request for the Second Pillar contribution (CAS 25%)

– Gross salary according to the employment contract: 20,000 lei
– CAS (25%): 5.000 lei
– CASS (10%): 2.000 lei
– Income tax: 650 lei
– Net Salary: 12.350 lei