Social security contributions paid by employees – unknown results. Labour Minister tries to explain…

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Labour Minister Lia Olguta Vasilescu has said on Thursday that she has discussed with the trade unions the payment of social security contributions only by employees as of January 2018 and, according to hotnews.ro, has indirectly confirmed that it will lead to decreases in net wages. Vasilescu said the government will increase the gross wage for teachers by 25% as of January 1, but when asked about the net wage increase, she said it will grow by 4%.

“We had talks about the shift of social security contributions from the employer to employees, the trade unionists have agreed this is the best option, the pension will increase accordingly. There are situations, not for the state employees, where the employer does not pay the social security contributions,” Vasilescu said for Antena 3 TV.

The Finance Ministry announced on July 27, that the mandatory social contributions will be in charge of the employees as of January 1, 2018, however employers will still have the obligation to establish, retain and pay them to the social security budgets.

“The 2017-2020 Governing Programme contains a package of measures aimed at the mandatory social contributions that are to be enforced as of January 1, 2018. Thus, the level of mandatory social contributions is to decrease by 4.25 percentage points, from 39.25% to 35%. The income tax rate (flat tax) is also scheduled to be cut from 16% to 10% as of January 1, 2018. These contributions will be due by the employee, but the obligation to establish, retain and pay them to the social security budgets will continue to be the employer’s obligation. In this regard, the amounts representing CAS and CASS, which are currently due by the employers in their own name, will be taken over by the employee. This measure will provide the employee with an increase in the score taken into account when determining the pension and implicitly a higher pension,” the release read.

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