Summary of the 2018 legislative changes concerning the calculation of tax on salary and salary-equivalent income, together with the personal deduction.
ARTICLE 78: calculating tax on salary and salary-equivalent income
Recipients of salary income owe a final monthly tax, calculated and withheld at source by the income payer.
The monthly tax is calculated as follows:
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At the employee's main job, by applying the 10% rate to the calculation base. This base is the net salary income obtained after deducting the mandatory social contributions for the month from gross income, minus:
- the personal deduction granted for that month;
- the union membership fee paid that month; contributions paid by employees to voluntary pension funds under Law no. 204/2006, as subsequently amended, and to voluntary pension schemes, up to an annual limit equal to 400 euros in lei;
- voluntary health insurance premiums and subscription-based medical services, as defined by republished Law no. 95/2006, as subsequently amended, paid by employees up to an annual limit equal to 400 euros in lei. The insurance policy or subscription must cover medical services supplied to the employee and/or any dependant.
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For income earned in other situations outside the main job, by applying the 10% rate to the calculation base at each place where income is earned. The base is the difference between gross income and the mandatory social contributions owed for the month.
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For salary income and/or salary differences established by law for previous periods, the payer calculates and withholds tax on the payment date under the rules then in force for income earned outside the main job, and pays it by the 25th of the following month.
ARTICLE 77: personal deduction
Individuals employed under an individual employment contract may deduct a personal deduction from monthly net salary income. It is granted for each month of the taxable period only on salary income earned at the employee's main job.
The personal deduction is granted to individuals whose monthly gross income is no more than 1,950 lei, inclusive, as follows:
- (i) taxpayers with no dependants: 510 lei;
- (ii) taxpayers with one dependant: 670 lei;
- (iii) taxpayers with two dependants: 830 lei;
- (iv) taxpayers with three dependants: 990 lei;
- (v) taxpayers with four or more dependants: 1,310 lei.
For taxpayers with monthly gross salary income between 1,951 lei and 3,600 lei, inclusive, personal deductions decrease progressively from the amounts above and are set according to the following 2018 personal deduction table.
Taxpayers with monthly gross salary income above 3,600 lei do not receive the personal deduction.
A dependant may be a spouse, child, another family member, or a relative of the taxpayer or their spouse up to and including the second degree of kinship, provided that the person's taxable and non-taxable income does not exceed 510 lei per month.