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Romania has highest fiscal cost in EU for middle wage employees
Romania has the highest fiscal cost per employee (40.85%) of 26 European countries, significantly higher than the tax share in other central and east European countries: 17.86% (Slovakia), 22.40% (Bulgaria), 29.29% (Poland) and 33.5% (Hungary).
KPMG Romania launched the 4th edition of the Guide on the international detachment of workers, a study on the lowest salary demands in the case of international detachments in EU member states, of the Economic European Space (EES) and Switzerland.
“Surprisingly or not, countries with low minimum salary level have higher fiscal costs for employees. While Ireland, the country with the highest minimum net salary in EU/EES/Switzerland,has a real tax share of 24.07% for employees, Romania, the country with the second lowest minimum net salary has a tax share of 40.85%, says Madalina Racovitan, Fiscal Consulting Partner and Head of People Services, KPMG Romania.
The Guide also compares the level of minimum salary in EU/EES/Switzerland member states. Racovitan explains: “Since 2016, when KPMG began this series of studies, the Netherlands, Ireland and Luxembourg were the countries with the highest minimum salary at national level, while Romania and Bulgaria have constantly ranked last, with the lowest minimum salaries.”
According to the 2019 edition of the Guide, of the 21 countries included in the study Romania ranks 19th with a minimum salary of 439 euro, followed by Latvia (430 euro) and Bulgaria (286 euro). As of this year, Romania has a minimum salary different for the construction industry (633 euro), significantly higher than the standard one. In this context, Romania ranks 16th of the 26 countries in the construction sector.