A study, conducted by Income Tax UK, has indicated that Romania ranks as the second highest taxing country across Europe. Bulgaria was revealed to be the best European country to live in, if you wish to pay the lowest amount of tax, with a flat tax rate of 10%.

The study analysed how much would be taxed om someone earning €3,000 per month, across 33 countries in the EU and also the UK.

Amount remaining after tax:

  • Bulgaria: €2,960
  • Poland: €2,589
  • Ireland: €2,466

The UK ranked as 8th lowest out of the 34 countries that were included in the survey.

Germany, which is commonly regarded as the ‘economic powerhouse of Europe’ ranked right in the middle as 17th, being left with €2,240 after tax deduction.

Romania was ranked as having the second highest income tax, with a take-home amount of only €1,755 out of the €3,000.

A spokesperson from Income Tax UK said, “It’s very interesting to see the tax differences across Europe for an average monthly salary. As we shift to a more remote working culture, those with the ability to work from anywhere also have the opportunity to maximise their income. Romania and Bulgaria border each other, yet the difference in salary after tax is more than £800.”

Income tax in Romania, is a flat-rate of 10%, however, there are additional “social contributions” such as social and health funds, which are set each year by the Romanian State Social Insurance Budget Law and the Romanian State Budget Law.

In Romania, the mandatory social contribution rates for 2021 are:

For social insurance contribution:

  •  31.3% for normal working conditions, of which 10.5 % for individual contribution and 20.8% for the contribution payable by the employer;
  •  36.3 % for difficult working conditions, of which 10.5 % for individual contribution and 25.8 % for the contribution payable by the employer;
  •  41.3 % for special working conditions, of which 10.5 % for individual contribution and 30.8% for the contribution payable by the employer.

For health insurance:  

  •  5.5% for individual contribution;
  •  5.2% for the contribution payable by the employer;
  •  0.85 % for the contribution on holidays and health insurance benefits.

The table below explains the taxes paid by employees and employers for the gross income of 2.300 lei (just over minimum wage) established for 2021, plus the sum collected by the authorities:  

Gross Income2.300 lei
Net salary1.386 lei
The employee pays:   25% CAS (pensions): 575 lei 10% CASS (health contribution): 230 lei Personal deduction: 405 lei 10% income tax: 109 lei914 lei
The employer pays:   Work insurance contribution: 52 lei52 lei
Total employer expenses 2.352 lei
The authorities collect 966 lei

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