Deloitte Romania created a calculator that estimates wage costs for employers which are affected by the restrictions imposed by the authorities in the context of the COVID-19 pandemic and which can no longer fully support the payment of wages. During this period, the companies have several legal options to adapt employment contracts to the reduced volume of activity, and, with the help of the calculator, they can estimate the wage costs for each option, based on two variables: the gross salary and the employee’s number of dependents.
The latest changes in labour legislation allow employers to implement certain measures to reduce their wage burden in times of financial difficulty. Practical cases have shown that employers can take into account three of these measures, for individual or combined implementation, where the legislation permits. These three measures are technical unemployment under the previous legislation, technical unemployment under the GEO 30/2020 provisions for employers directly or indirectly affected by COVID-19 and granting days off to parents for childcare.
"Each of these scenarios has a different applicable tax treatment and employers must go through a complex process in order to determine all the elements related to wage costs and to the impact of applying these solutions in relation to employees’ net income. Companies can use our calculator precisely for this: estimation of the total wage costs and of the net remuneration at employees’ end based on two variables only: gross income and number of dependents," said Monica Tariuc, Senior Manager Global Employer Services, Deloitte Romania.
As an example, for a gross salary of 3,000 RON, with two dependents, if the employment contract is maintained in its initial version, the total wage cost of the employer is 3,068 RON. If the employer opts for technical unemployment under the previous legislation, the wage cost drops to 2,301 RON. For the technical unemployment borne from the state budget, the total cost is 2,250 RON, but it is not to be paid by the employer, and if the employee takes days off for childcare, the salary cost reaches 2,301 RON (910 RON for the employer and 1,390 RON for the state).
The calculator shows estimated results based on the two variables. The results do not take into account other features which may lead to differences in calculation.
Deloitte provides worldwide audit, consulting, legal, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500 companies through a globally connected network of member firms in more than 150 countries and territories, bringing world-class capabilities, insights, and high-quality service to address clients' most complex business challenges. Deloitte's goal is to make an impact that matters through its more than 312,000 professionals.
Deloitte Romania is one of the leading professional services organizations in the country providing, in cooperation with Reff & Associates, services in audit, tax, legal, consulting, financial advisory, risk advisory, business processes as well as technology services and other related services, through more than 1,700 professionals.
Please see www.deloitte.com/ro/about to learn more about the global network of member firms.