Ordinance 16 of July 15, 2022, brought numerous tax changes that will be reflected in the budget of companies, entrepreneurs, and people who have income from independent activities. Among the most important changes, we mention: part-time jobs are taxed at the level of the minimum wage in the economy from August 1, and starting on 1 January 2023, the new law will bring about a major overhaul of the micro-company tax regime by decreasing the turnover threshold for applicability of the regime from EUR 1 million to EUR 500,000; maintaining the 1% micro-company income tax rate and eliminating the 3% tax rate; introducing the obligation to have at least one employee; increase the dividend tax on dividends distributed after 1 January 2023 from 5% to 8%, for both companies and individuals. There is also good news in Ordinance 16, in the case of benefits granted by the employer to employees, a monthly threshold is introduced for non-taxable income that is not included in the bases for calculating mandatory social contributions, of no more than 33% of the corresponding basic salary the job held. The provision applies from January 1, 2023.
BENEFITS EXCEPTED FROM THE PAYMENT OF INCOME TAX AND SOCIAL CONTRIBUTIONS UP TO THE MONTHLY LIMIT OF 33% OF THE EMPLOYEE’S BASIC SALARY:
a) additional benefits received by employees under the mobility clause according to the law, other than those referred to in Article 76 (2) (k), within the limit of 2.5 times the legal level established for the delegation/detachment allowance, by Government decision, for staff of public authorities and institutions;
b) the value of the food provided by the employer for his own employees, natural persons earning income from salaries or assimilated to salaries, in situations other than those in which, according to the legislation in force, it is forbidden to bring food onto the premises, as provided for in the employment contract or in the internal regulations, within the limit of the maximum amount, according to the law, of one meal voucher/person/day, provided for at the date of granting, in accordance with the legislation in force.
Be careful! The number of days in the month during which the individual is teleworking or working from home or on rest/medical/leave of absence shall not be taken into account when determining the monthly non-taxable limit. Food means food prepared in the individual’s own establishments or purchased from specialized establishments. The provisions do not apply to employees who receive meal vouchers in accordance with the legislation in force;
c) accommodation and the cost of rent for accommodation/living quarters made available by employers to their employees who are natural persons earning income from wages or salary-like income, as provided for in the employment contract or internal rules, up to a non-taxable limit of 20% of the guaranteed gross national minimum basic wage/month/person, subject to the following conditions:
i) the employee or his/her spouse does not own or use a dwelling in the locality where he/she works;
ii) the accommodation/living space is in the employer’s own premises, including hotels, or in a building rented for this purpose from a third party by the employer;
iii) the rental contract between the employer and the third party is concluded in accordance with the law;
iv) the non-taxable limit is granted to one of the spouses, if both spouses work in the same locality, for the same employer or for different employers, on the basis of the spouse’s affidavit. When determining the limit of 20% of the minimum gross basic wage per country guaranteed in payment, the lowest gross minimum wage per country in force in the month for which the benefits are granted is taken into account. Verification of compliance with the conditions is carried out on the basis of supporting documents and is the responsibility of the employer;
d) the cost of tourist and/or treatment services, including transport, during the holiday period, for own employees and their family members, granted by the employer, as provided for in the employment contract, internal regulations, or received on the basis of special laws and/or financed from the budget, up to an annual limit, for each employee, representing the level of an average gross salary used to base the state social security budget for the year in which they were granted;
e) contributions to a voluntary pension fund according to Law no. 204/2006, as subsequently amended and supplemented, and those representing contributions to voluntary pension schemes, qualified as such in accordance with the legislation on voluntary pensions by the Financial Supervisory Authority, administered by authorized entities established in the Member States of the European Union or belonging to the European Economic Area, borne by the employer for its own employees, up to an annual limit of EUR 400 per person;
f) voluntary health insurance premiums, as well as medical services provided in the form of subscriptions, borne by the employer for its own employees, so as not to exceed the equivalent in RON of EUR 400 per person per year;
g) amounts granted to teleworking employees to cover the cost of utilities at the place where the employee works, such as electricity, heating, water and data subscription, and the purchase of office furniture and equipment, within the limits set by the employer in the employment contract or internal rules, up to a monthly limit of 400 lei corresponding to the number of days in the month in which the individual works teleworking. The amounts are granted without the need to present supporting documents.
So you can grant employees the telecommuting allowance, a part of the rent of the apartments where the employees live, accommodation and transport for the holiday, but also subscriptions to medical services as long as they fall within the limit of 33% of the basic salary corresponding to the job held.
BENEFITS THAT DO EMPLOYERS OFFER TO THEIR EMPLOYEES, ACCORDING TO SHRM’S EMPLOYEE BENEFITS SURVEY
91% of employers offer mental health benefits in 2022. Benefits like telemedicine services are also on the rise, according to SHRM’s latest employee benefits study. Health care is ranked by employers as the most important type of benefit an organization can provide to its employees, followed by retirement and vacation benefits, which are tied for second place. These benefits were at the top even before the pandemic, but now they are considered more important than they were before the pandemic.
Health Care benefits
- 93 percent of organizations indicated that they offer telemedicine or telehealth as a benefit to their workers, up 20 percentage points since 2019.
- 1 in 5 employers offers mental health days on top of regular sick leave.
- Almost all organizations (98%) offer some type of health plan, and 72% of organizations say they offer a fully insured health plan.
- Flexible medical spending accounts and health savings accounts continued to be the most popular type of health-related spending accounts, with 63 percent and 57 percent of employers offering them, respectively.
- 82% of employers rank retirement and savings as important benefits. The percentage is up 27% from 2020/2021.
- In 2022, 94% of employers offered some type of retirement savings plan to their employees.
- 83% of employers contributed to public pension plans and 76% contributed to private plans.
- Just over half (51%) of organizations said they automatically enroll new or existing employees in their company retirement plan – a figure that has remained consistent since the start of the COVID-19 pandemic.
- 99% of employers offered paid vacation and 96% offered paid sick leave
- Unlimited vacation leave continued to be rarely offered, with only (6%) indicating that they offered this benefit.
- 20% of organizations said they offered paid mental health days off separate from regular sick leave.
- Over half of organizations (59%) said they offer a flexible spending account for dependent care.
- Additionally, 31% of organizations said they would allow employees to bring children to work in an emergency as a benefit.
- 63% of employers said they offer most of their workers the opportunity to adopt a hybrid work model, involving a combination of remote and office work.
- 62% said they offer employees a subsidy or reimbursement for an at-home office or work equipment.
- 78% of employers cover opportunities to develop new skills, up from 75% in 2021.
- The number of employers who felt professional development benefits were important to offer increased to 65% in 2022.
The benefits you provide to colleagues are an opportunity to enhance their experience and make a difference in their lives. With a growing talent shortage and increasing options for people to work, benefits can play a key role in this competition and create that sense of well-being that people want from their future workplace.