blahblop123

Romania has a flat 16% income tax rate which is jolly good and all. However, you also have to pay mandatory Social Security Contributions (SSC) which is around 28%. Correct me if i'm wrong but.. doesn't that give you an effective tax rate of 44% ?? ..

In comparison.. you would be taxed 17% (Income tax and NI/SSC) on £20,000 in the UK. Even £100,000 would get taxed less in the UK (35%).

Azarel

Hi,

The way the info is presented is often confusing. You're right, there's a flat rate of 16% on income in Romania, which is paid by the employee from his cut of the salary, but some taxes, or parts of taxes, are paid by the employer and are not part of the gross salary. This is why salaries here are nearly always quote in net, or take-home, otherwise I guess it gets confusing.

Generally speaking, the employee's gross salary is one thing, then the is the employer's taxes, and together they make the 'cost to the company'.

Easier with some figures:

Let's take an employee's gross salary of 106'000 lei (about 20'000 GBP)

His net salary would be 82'600 lei, so he'd lose about 22% in taxes.

In addition, the company have to pay about 25'000 lei to the state for their share of some of the contributions, making the total cost to the company about 131'000 lei.

blahblop123

how does it work for someone that is self employed or getting income from investments ? do Social Security Contributions really take up that much of chunk out of Romanian income ?

Azarel

No, I don't think so. It depends, I think, in what way you're self-employed. The most common way to be self-employed is to be what is known as a 'PFA' (persona fizica autorizata).

The tax for pensions is 26.3% now BUT you don't have to declare all your income as taxable for pensions. You can declare any amount starting from 35% of your gross income, up to 5 times your gross income.

So, if you were earning 100'000 lei per year gross (17'000 GBP), you could choose to pay based on 35% of that, ie on 35'000 lei, at a rate of 26.3%, meaning a contribution of 9200 lei over the year (around 130 pounds a month). That equates to about 9% of gross.

Then there is health insurances, at 5.5%, income tax at 16% and there are a few other things you can pay but which are voluntary. Anyway, overall, assuming you choose to minimize your pension contributions and skip all the voluntary, the lowest tax you can get away with is probably about 30% of gross.

You mention also income from investments (I suppose you mean something like rental properties). That 'might' be different, you'd have to ask.

PaulLungu

A late reply, but: you could always try and set up something called "microintreprindere". You have to pay 1% of all the money going into the company and also 16% profit tax.

You employ yourself there with a small wage - say 200 EUR/month. That will cost you roughly 100 EUR/month.

An then the extra that you need to pay are the 1% + 16%, like a company with one employee.

ThankfulWanyana

Hello sorry I put this in the wrong place but I couldn't find help to start a new thread !

I'm just wondering what the price of petrol is in Romania at the moment please, I don't know the exchange rate , so if you could let me know in sterling per litre or let me know the current exchange rate please?

Many thanks

mikelincs

To start a new thread, just go to the forum you want to start the thread in, and at the top, above the list of threads, is a little button 'new thread' just click on that and it will offer you an area to put in a title, and then the body of the post.

Azarel

Hi,

It's around 80p a litre (standard unleaded), plus or minus depending on location, brand, type, exchange rate, etc.

ThankfulWanyana

Thank you for your reply, that's about the same prices in Spain , much cheaper than here then !

ThankfulWanyana

Thank you for your reply. I have tried twice to do that and I have not been successful, I wanted to start a new thread for Romania, don't know if that is possible?

I don't mind if anyone wants to start a thread in Romania? thank you for your input.

:-)

Pollyana

Click on this link
Europe - British Expats
Scroll down the page till you see a blue bar and the words THREADS IN FORUM: EUROPE
Just above those words is a blue button that says NEW THREAD
Click that button and it will give you a window to start a new thread about Romania.

mikelincs

Do you mean to have a sub-forum for Romania, if so that is something for admin to decide, and will only happen if there are enough posts about Romania from a number of people.