Workers in construction, agriculture and the food industry will feel the tax measures from November 1, 2023: fewer of those who receive the minimum wage will see higher amounts only on gross.

What the Government has done has a negative impact on some workers.

These areas were exempted from income tax, health care contribution and, optionally, from level II pensions for salaries up to 10,000 lei.

*We also have two minimum wage increases in construction, agriculture and food industry starting November 1 – details below

Starting November 1, these possibilities are limited in the sense that the contribution for medical care (10%) will be paid by employees (Law 296/2023 published in the Official Gazette).

The benefit will remain only in respect of income tax.

From November 1, they will receive the minimum wage in the construction, agriculture and food industry.

Some workers receive minimum wage. Currently salaries are 4,000 lei in construction and 3,000 lei in agriculture and food industry, but from November 1 they will be increased to 4,582 and 3,436 lei respectively.

Growth depends on the amount, not on what a person takes in his hands.

Therefore, salaries are increased only on paper, because in practice these workers will receive amounts similar to the current ones: 3,150 lei in construction and 2,362 lei in agriculture and food industry.

The state will earn 321.4 million lei from them in November and December and 3.85 billion lei in 2024.

Whose salary decreases from November 1, theoretically

Not all workers in construction, agriculture and food industry receive the minimum wage, as confirmed by the data of the National Institute of Statistics (INS).

As benefits are reduced from November 1, 2023, those earning above the minimum wage will have their wages reduced.

Two examples:

1. The average accrued salary in August (latest data) in the construction industry amounted to almost 6,000 lei gross. Suppose that a person was paid such an amount, that is, he had 4725 lei in his hands.

From November 1, he will receive 4,125 lei, that is, 600 lei less.

2. In agriculture, the average gross salary was about 5,500 lei gross, which means that the employee paid the received amount of 4,331 lei. From November 1, he will receive 3,781 lei, that is, 550 lei less.

So in theory these salaries will decrease. But given the labor shortage, most likely these costs will be borne by construction, agriculture and food industries, and we will see them in the market later. For example, in the increase in the price of labor. It remains to be seen.