Romania pension tax exemptions and employer contribution benefits

In Romania, pensioners receiving monthly pensions of up to 3,000 lei are exempt from both income tax and the health insurance contribution (CASS). For pensions exceeding this threshold, the 10% health contribution is applied only to the amount above 3,000 lei, and income tax is calculated after deducting the non-taxable threshold and health contributions.

Additional tax relief is available for individuals with severe or accentuated disabilities, who are exempt from income tax on pension earnings regardless of the amount. Other benefits include local tax reductions and exemptions from stamp duty in legal proceedings regarding pension rights.

Furthermore, employers can provide tax-free bonuses to employees by contributing to voluntary private pension funds (Pillar III). Employers can contribute up to 400 euros per year per employee without paying the Labor Insurance Contribution (CAM), and the amount is fully deductible from the company's taxable profit. For the employee, these contributions are exempt from income tax and social security contributions.