Legislation change: 2% of gross income, not gross salary

The Government has decided that the 2% contribution for mandatory pension funds in the first year of pension collections will be calculated as a percentage of gross income, and not of the gross salary, as had previously been the case. The modification was implemented through an Emergency Ordinance, according to which, when calculating social security contributions, one has to take into account the total gross income earned by the participant, i.e. their salary, as well as bonuses, perks and other incomes. The Government specified the Emergency Ordinance “is widening the spectrum of elements considered when calculating social security contributions owed by employers and employees, by including all gross monthly incomes. Whereas the elements previously considered for social security contributions were the base salary plus permanent perks, under the new provisions, they encompass all gross incomes, with sums from bonuses, perks etc. being added to the salary.”