The decision to increase the country’s gross minimum income has been in force since January 1st, 2018, its effects being felt starting February. The decision was adopted by the Government in November 2017, and this evolution is mainly determined by the transfer of CAS and CASS contributions in the responsibility of the employees.
Thus, according to Government Decision no. 846/2017, Part I, published in the Official Monitor on 29th November 2017, the gross minimum income has increased from 1,450 RON to 1,900 RON. The increase of the minimum wage does not, however, lead to a direct proportional increase of the net salary, as the increase in the gross minimum income is accompanied by a change in the rules of calculation and the application of the social contributions. Specifically, a part of the increase in the gross income is directed to pension and health care contributions, which were passed exclusively to the employees’ obligation.
At the net salary level, if last year an employee with a minimum wage earned 1,065 RON per month, starting 2018, under the new taxation conditions, his salary will increase by 97 RON, 9% up, respectively. Practically, for the monthly work schedule of 166,666 hours, the employee will receive a net salary of RON 1,162, namely an average of 11.40 RON per hour.
The minimum gross income, from 45 RON to 1,900 RON in 18 years
The gross minimum wage in the country has seen an upward trend over the last 18 years, with increases every year, in many cases even in two annual installments. Thus, if in the early 2000s, in January, the gross minimum wage was 45 RON, by the end of the year it reached 100 RON. Its value tripled until the end of 2005, following annual increases of about 100 RON per year. The year 2014 ended with a minimum gross salary of 900 RON/month and 2015 with 1,050 RON/month, and in the next two years it increased to the value of 2017, namely 1,450 RON/month.