Unlocking the Benefits of Non-Taxable Employee Perks in Romania

Romanian tax legislation includes provisions for a range of non-taxable salary benefits, offering meaningful advantages to both employees and employers. These benefits represent additional income for workers, help motivate and retain talent, and, when structured correctly, come with favorable tax treatment.

Social assistance

Social assistance is one form of non-taxable salary benefit, representing non-taxable income for employees under employment contracts or special laws. These can be granted in situations such as funerals, serious and incurable illnesses, medical devices, or childbirth and adoption. Employers can also provide additional social assistance benefits as stipulated in individual employment contracts or internal regulations, though these are included in the calculation of social contributions and are subject to income tax.

Salary gifts

Cash or in-kind gifts, including gift vouchers, are exempt from tax to the extent that their value for each individual does not exceed 300 lei. These can be given on occasions such as Easter, Christmas, International Women's Day, or Children's Day.

Other non-taxable fringe benefits

Provided certain limits are respected, several other categories of benefits are considered non-taxable:

• Additional benefits received by workers under mobility clauses, limited to 2.5 times the legal level established for delegation and secondment allowances
• The value of meals provided by employers who do not also provide meal vouchers, capped at the maximum value of a meal voucher per day
• Accommodation and rental value for housing provided by employers, within a monthly limit of 20 percent of the minimum gross monthly wage guaranteed in the country, subject to conditions such as the employee and their family not owning property in the locality where they work
• Contributions to optional pension funds supported by employers, within annual limits
• Voluntary health insurance premiums and medical services provided as subscriptions, not exceeding the equivalent of 400 euros per person per year
• Value of tourist and treatment services, including transportation during vacations, subject to an annual cap tied to the average gross salary used for the state social insurance budget
• Amounts granted to remote workers to support utility expenses, capped at 400 lei per month per person, corresponding to the days worked remotely
• Subscriptions for sports facility use, provided the facility operator meets certain classification requirements

Employer obligations

Employers are responsible for verifying compliance with the conditions attached to each of these benefits, based on supporting documentation, and for respecting the individual caps set by law for each category.

The 33 percent combined cap

Starting in January 2023, a group of these benefits, including the value of meals, accommodation and rent for housing, mobility-clause benefits, optional pension fund contributions, voluntary health insurance premiums, and remote-work allowances, benefit from preferential tax treatment only to the extent that their combined total does not exceed 33 percent of the base salary corresponding to the employee's job position.

For these benefits, employers must first apply the individual cap for each one, and only then apply the 33 percent cap against the base salary specified in the individual employment contract. Employers have discretion over the order in which these benefits are counted toward that combined cap.

Why this matters

Non-taxable salary benefits offer a real advantage for both employees and employers in Romania, providing additional incentive for workers while helping employers build more attractive, cost-effective compensation packages. Strict adherence to the applicable limits and rules is essential to avoid unintended tax consequences, making a clear understanding of these provisions valuable for any employer operating in Romania.

Sources: Romanian Fiscal Code, Romanian Ministry of Finance