The year 2024 has begun with a series of changes in the field of human resources, and employers must be prepared to implement them and address questions that will likely arise from employees since some provisions coming into effect this month will directly impact them.

Here are the changes being discussed:

Employers Obligated to Increase Wages for Employees on Minimum Wage for Over 2 Years

According to Emergency Ordinance No. 130/2021, starting January 1, 2022, the minimum gross national guaranteed salary can be applied to an employee for a maximum period of 24 months from the date of signing the individual employment contract. After this period, whether the employee has been qualified or not, they must be placed on a salary higher than the minimum gross national guaranteed salary.

Thus, all employees hired at the minimum wage before 2022 must have their base salary increased starting January 1, 2024.

Change in Taxation of Pension Income

Starting January 1, 2024, any payer of pension income is required to calculate monthly tax at the time of payment, withhold it, and pay it to the state budget by the 25th of the month following the payment month. The withheld tax is final.

The monthly tax will be determined by each pension income payer as follows:

a) For the monthly pension income determined by applying the contributory principle, regardless of its level, deducting the non-taxable monthly income ceiling of 2,000 lei, a 10% tax rate applies.

b) For monthly pension income with both contributory and non-contributory components, deducting the non-taxable monthly income ceiling of 2,000 lei, a 10% tax rate applies to the contributory part, and progressive rates of 10%, 15%, and 20% apply to the non-contributory part based on its comparison to the average net and gross monthly wages.

c) For monthly pension income with only a non-contributory component, deducting the non-taxable monthly income ceiling of 2,000 lei, progressive tax rates of 10%, 15%, and 20% apply based on its comparison to the average net and gross monthly wages.

More information on this provision can be read [here](https://www.smartree.com/articol/schimbari-legislatie-impozitare-pensii).

Meal Tickets and Vacation Vouchers Taxed with CASS

Starting in 2024, meal tickets and vacation vouchers provided by employers will be subject to a 10% CASS tax.

As a result, employees with meal tickets or vacation vouchers as benefits in their contracts will receive 10% less, beginning with January 2024 incomes.

The maximum value of a meal ticket is 35 lei as of August 1, 2023, increasing to 40 lei from January 1, 2024. Vacation vouchers can be granted up to six times the gross minimum wage.

Work Vouchers Instead of Money for Domestic Activities

From January 1, 2024, for cleaning, laundry, tailoring, food preparation, personal care, feeding, and supervising independent domestic beneficiaries, vouchers instead of money will be given.

The vouchers, worth 15 lei, can be exchanged for money.

A legal relationship between the domestic service provider and the beneficiary is established based on mutual agreement without a written document. The duration of domestic activities for a beneficiary cannot exceed 12 hours per day or 6 hours for providers aged 16-18.

The minimum monthly contribution is the equivalent of at least 85 domestic work vouchers. This ensures that a domestic service provider can benefit from state social insurance protection, with the amount being at least 25% of the national gross minimum wage.

Those needing domestic services can purchase these work vouchers from Employment Agencies. Those providing services will also go to these agencies to exchange the vouchers for money after collecting vouchers worth at least 85 lei per month.

Salary Tax Facilities

If in the same month, a person earns wages and salary-like income for a fraction of the month at the primary job from one or more successive employers, for applying the income tax exemption, each employer will determine the share of the 10,000 lei monthly ceiling corresponding to this period and grant the exemption for the gross monthly income earned within the limit of the ceiling fraction.

Deductible Sports Facility Subscriptions

Starting January 2024, the value of subscriptions for sports facilities is deductible up to the equivalent of 100 euros annually. This amount is non-taxable income if, combined with other income, it does not exceed 33% of the base salary.

Non-taxable Income Ceiling

Amounts paid by employers for early childhood education of employees’ children are no longer entirely non-taxable starting January 2024.

These incomes are combined with other non-taxable incomes so that they do not exceed 33% of the base salary.

According to Pre-university Education Law No. 198/2023, the first level of pre-university education is early childhood education (3 months-6 years), comprising ante-preschool (3 months-3 years) and preschool (3-6 years), including small, middle, and large groups.

The fiscal facility of 400 lei for those working remotely is no longer granted.

Amounts given to employees working remotely, within the limits set by the employment contract or internal regulations, become taxable incomes starting January 2024.

Rules for Recognizing Certain Incomes

From this month, a series of rules apply to the calculation of social contributions and income tax:

a) The amounts representing the cost of tourism and/or treatment services, including transport, during vacation for employees and their family members: are incomes for the month when the reimbursement is approved, or for the month they are granted if no supporting documents are required.

b) The amounts representing contributions to a voluntary pension fund paid by the employer for their employees – are incomes for the months corresponding to the payment, based on supporting documents.

c) The amounts representing voluntary health insurance premiums and medical services provided as a subscription paid by the employer for their employees – are incomes for the months corresponding to the payment, based on supporting documents.

d) The amounts representing the cost of subscriptions paid by the employer for their employees – are incomes for the months corresponding to the payment, based on supporting documents.

e) The amounts paid/granted by the employer for placing employees’ children in early childhood education units, according to the law, are incomes for the months corresponding to the payment, based on supporting documents.

The tax due on the above amounts is calculated and withheld by adding it to the wages and salary-like incomes for the month it is considered income, and the tax payment to the state budget is made monthly or quarterly.

Taxable Income Deductions

When determining the taxable income base for wage income tax, the 400 euro ceiling is reduced to consider the following:

a) The value of subscriptions for using sports facilities, supported by the employee, up to 100 euros, starting with January 2024 incomes.

b) During January-December 2024, the non-taxable deduction of 200 lei from the taxable income for employees earning the minimum gross wage, without exceeding 4,000 lei/month, continues to apply.

Private Pension Option

Starting January 2024, individuals earning wages and salary-like incomes from the IT sector, construction sector, agriculture, and food industry can opt to pay contributions to a privately managed pension fund. The option is submitted in writing to the employer, who will withhold the contribution according to legal provisions, starting with the following month’s incomes.

Individuals can revoke their previously expressed option by submitting a written request to the employer, applicable from the incomes of the month following the submission.

Employers set the rules for exercising the aforementioned rights through internal regulations or other internal documents.

33% Salary Income Ceiling

Starting January 2024, the following are included in this ceiling:

a) The value of subscriptions paid by the employer for their employees, up to the equivalent of 100 euros annually per person (previously 400 euros).

b) The favorable difference between the preferential interest rate negotiated and the market interest rate for loans and deposits; applicable to entities providing these financial instruments.

c) Amounts paid by the employer for the early childhood education of employees’ children, as per the income tax provisions.

Excluded from this ceiling starting January 2024 are amounts granted to employees working remotely.

CASS for Medical Leave Allowances

Persons on medical leave granted under O.U.G. No. 158/2005 are no longer exempt from paying CASS for the allowances of the medical certificates. The monthly CASS calculation base is the amount of social health insurance benefits received by the individuals. This provision applies starting with January 2024 health benefits.