Employers can grant money to their employees for teleworking and for the education of their children under seven years
Starting from 2021, Romanian employers can grant money to employees for the expenses necessary to carry out their teleworking activity, as well as for covering the costs generated by the early education of their children.
Under an employment contract or through internal regulations and within a monthly ceiling of 400 lei (approximately 82 EUR) corresponding to the number of days in a month in which the employee carries out their activity in a teleworking system, employers may provide money to support the utilities expenses of the place where the employees are carrying out their activity. From the amounts received, employees may be able to cover the costs generated by services such as electricity, heating, water or internet subscription, but may also purchase office equipment or furniture needed to carry out their teleworking activity. It should be mentioned that these amounts can be granted without the need to provide supporting documents from the beneficiary employees.
The expenses thus incurred by the employer are, according to the new legal provisions, deductible expenses for determining the tax result.
Furthermore, employers may provide a monthly amount to their employees in order for them to cover the costs of the early childhood education establishments in which one or more of their children are enrolled. The term early education means that part of the national pre-university education system consisting of pre-school level (1 – 3 years) and preschool education (3 – 6 years). The maximum amount that can be granted by employers is 1 500 lei / month (approximately 308 EUR) for each child of the employee. However, the amount can only be offered taking into account the expenses actually incurred by the employee.
Companies that grant money for early education will be able to deduct the costs from profit tax due, and if the amount exceeds the profit tax, the rest of it may be deducted, in order, from payroll tax, from VAT due and, finally, from excise duties owed by the company.
From the point of view of employees, it is important to mention that these amounts are not considered taxable income nor are they included in the monthly basis of social security contributions.
Law no. 296/2020 for the amendment and completion of Law no. 227/2015 regarding the Fiscal Code