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Deloitte : Majority of employees to earn lower net monthly salary from January 2024 than in 2023
The majority of employees will receive, as of 1 January 2024, a net monthly salary lower than the previous year, following the change in preferential tax treatment for meal vouchers and holiday vouchers, maintain the Deloitte Romania consultants.
"The end of 2023 has brought a series of unfavourable tax changes for employees and employers in all economic sectors. After the changes aimed at restricting the facilities granted to employees in IT, construction, agriculture and food industry, which came into force on 1 November 2023, other changes followed shortly after, through Ordinance 115/2023, also impacting employees, but also HR departments. The latter include changes to the preferential tax treatment of meal vouchers and holiday vouchers. Therefore, from 2024 onwards, these vouchers will also be included in the calculation basis of the social health insurance contribution (CASS)," says Ana-Maria Hoborici, manager, Outsourced Services Solutions, Deloitte Romania, in an opinion piece.
According to the source, prior to 2024, all vouchers regulated by Law 165/2018 on the granting of vouchers, except for gift vouchers, were subject only to income tax (10%), but since the beginning of this year, meal vouchers as well as holiday vouchers are taxed at 10% tax and 10% CASS.
"As the income tax due in a month is calculated after deducting the social contributions due (CAS and CASS, 35% in total) from the total gross income earned in that month, meal vouchers and holiday vouchers end up being taxed at 19%. Some companies used to offset the income tax due on meal vouchers so that employees' net pay did not drop, but following this legislative change, most have decided not to offset this new contribution (CASS) owed by employees," the analysis adds.
As a result, the majority of employees will receive, from 1 January 2024, a net monthly salary lower than the previous year, the source said.