Starting January 1, 2025, Romania's minimum gross wage will increase to 4,050 lei. This marks the third consecutive raise in recent times, reflecting a continuing trend of improving employee wage conditions. In this article, we will analyze the impact of this increase on employee income, social and fiscal contributions, as well as other economic implications. What does this increase mean for employees and employers? The increase in minimum gross salary from 3,700 lei to 4,050 lei brings direct benefits for employees but also additional costs for employers. With MetricBiz, you can quickly analyze how many employees a company has and the financial performance per employee, which helps you understand how salary changes affect business efficiency and profitability. Among the notable changes: Higher net income Employees who receive the minimum wage will see an increase in their net salary due to maintaining the tax exemption for the 300 lei portion of the minimum wage. This measure, intended to support low incomes, will remain in effect in 2025. 2. Higher social contributions Social security and health insurance contributions will be calculated based on the new gross salary. For example: CAS (Social Security): 25% of gross salary, equivalent to 1,012.5 lei CASS (Health Insurance): 10% of gross salary, which is 405 lei 3.Income tax The 10% tax will be applied to the taxable base, which is the gross salary minus social contributions, benefiting from the 300 lei exemption. Impact on self-employed individuals The minimum gross salary also has implications for other types of income and contributions: 1.Self-employed individuals (PFA) Self-employed persons will pay social contributions (CAS and CASS) at a minimum base of 4,050 lei. For annual net income exceeding 12 minimum gross salaries (48,600 lei in 2025), contributions are mandatory: CAS: 12,150 lei annually CASS: 4,860 lei annually 2. Persons without income Those who want to be insured in the public health system will pay CASS calculated at 6 minimum gross salaries, equivalent to 2,430 lei annually. Personal deduction and other tax benefits In 2025, the minimum wage increase also brings higher personal deductions. This reduces the taxable base and varies depending on the number of dependents. For example: For an employee without dependents, the deduction is 20% of gross salary. The percentage can reach up to 45% for those with four or more dependents. Fine unit and other implications Although the minimum wage is increasing, the fine unit remains capped at 165 lei, according to the Government's decision. If this cap is extended into 2025, the fine unit value will not change, regardless of the increase in gross minimum wage. Conclusions The increase of the minimum gross salary to 4,050 lei marks a step forward for improving wage conditions in Romania. However, this threshold also brings challenges for employers, who will have to bear additional costs for social and fiscal contributions. The number of contracts paid at minimum wage has dropped to its lowest level in 5 years and stands around 1.09 million, according to Labor Inspection data. Budget optimization and understanding the new regulations are essential for both companies and employees. Want to better understand the impact of these changes on your business? Discover how MetricBiz can help you analyze financial data, identify opportunities, and plan strategically. Start today!
