E&Y: Romania has third highest social security contributions in EU

Romania has the third most burdensome social contribution costs in the EU, due to an increase of the calculation base for social securities, according to audit and consultancy firm Ernst & Young (E&Y). Romanian labour taxes are among the highest in Europe, considering the high level of social security contributions (CAS) and the increased calculation basis, which came into force on January 1, Claudia Durus, expert in human resource taxes with E&Y, said on Tuesday. “Due to the increase in the calculation base for social security contributions this year, Romania now has the third largest social security contributions costs among EU countries, after France and Belgium. In 2007, Romania was positioned around tenth,” said Durus. In other words, Romania has climbed in the ranking due to the increase in labour taxation. Although social security contributions will be cut by 6 percentage points this year, E&Y forecasts that the higher calculation basis for these contributions (the total gross incomes, i.e. overall gross payments made to the employees instead of the gross salary like before) will offset the cuts in the contribution levels, and will result in even higher taxation than last year.