The end of 2023 brought a number of unfavorable tax changes for employees and employers in all areas of the economy. Following the changes aimed at limiting the benefits granted to workers in the IT, construction, agriculture and food industries that came into effect on November 1, 2023, other changes took place shortly after through Decree 115/2023, affecting workers as well as departments personnel Among the latter is a change in the regime of preferential taxation of food stamps and vacation vouchers.

Thus, starting from 2024, these vouchers will also be included in the basis of calculating the social health insurance contribution (CASS).

What is the impact on employees?

Until 2024, all vouchers governed by Voucher Law 165/2018, with the exception of gift vouchers, were only subject to income tax (10%), but from the beginning of this year meal vouchers as well as holiday vouchers are subject to 10% tax and 10 % CASS. Given that the income tax payable for the month is calculated after deducting the applicable social security contributions (CAS and CASS, together 35%) from the total gross income earned in that month, meal vouchers and holiday vouchers are ultimately charged from 19 %.

In the past, some companies used to credit income tax on meal vouchers so that workers’ net wages wouldn’t be reduced, but after this legislative change, most chose not to credit this new contribution (CASS) owed to workers. Thus, the majority of employees from January 1, 2024 receive a lower net monthly salary than in the previous year.

For example, an employee with a salary of 6,000 lei who received food vouchers of 20 lei/day received an average net salary of 3,470 lei last year, to which were added food vouchers totaling 400 lei. Thus, the employee owed an average of 430 lei in income tax, of which 40 lei was income tax related to food stamps and mandatory social contributions (25% CAS and 10% CASS) in the amount of 2,100 lei.

Starting from January 2024, the same employee owes an additional 9% of the value of meal vouchers, reaching a total contribution (CAS and CASS) of 2,140 lei. However, the income tax is reduced from 430 lei to 426 lei, since the basis for calculating the income tax is the difference between the total gross income and the mandatory social contributions. Thus, the employee will receive, on average, a net salary 3434 lei, less by 1%-2% compared to the previous year.

In addition to the change in the favorable tax treatment of meal vouchers, from January 1, 2024, the maximum value of meal vouchers that can be provided to employees has also increased from 35 lei/day to 40 lei/day. Through this measure, employers who decide to increase the cost of food stamps will end up making up for employee losses from CASS.

Returning to the above example, if the cost of a food stamp increased from 20 lei to 25 lei, the worker would receive a net salary of 3,415 lei, to which food stamps of 500 lei are added, reaching an income of 3,915 lei, with about 2% more than the version with 20 lei/ticket. In this scenario, the employer’s total costs would increase by approx 2%.

What is the impact on payroll departments?

Given the frequency of legislative changes, payroll departments are in a continuous process of adapting to new regulations. In addition to this aspect, one of the biggest challenges for HR departments is adapting the payroll IT system to the new reporting/payroll requirements in a very short time, as well as ensuring the accuracy of the payroll. and timely payment of salary rights.

In summary, the impact of the new legislative changes is felt by both employees, due to increased food stamp contributions, and payroll professionals. The latter feel both the burden of adapting the salary calculation in accordance with the new regulations in a very short time, and the pressure from the employees who demand details and arguments related to the salary calculation.

Review by Ana-Maria Khoborici, Outsourcing Manager, Deloitte Romania