A Romanian company, XYZ SRL, plans to provide employees with medical subscriptions and voluntary health insurance covering surgery, hospitalization, and clinic consultations, with part of the costs borne by employees.
According to Art. 76 (4^1) (f) of the Fiscal Code, health insurance premiums and medical subscriptions paid by the employer are non-taxable benefits, provided they do not exceed the monthly ceiling of 33% of base salary and the annual limit of EUR 400 per person.
Employee-related expenses are fully tax-deductible under Art. 25 (2) Fiscal Code, except in explicitly listed cases. Thus, medical services for employees are deductible, while those granted to family members are treated as taxable income subject to income tax and social contributions.
Accounting treatment (summary):
- Invoice for medical services: 6458/4282 = 401
- Recognition of benefit in kind: 4282 = 7588
- Salary and benefits expenses: 641/6421 = 421
- Withholding of tax and contributions: 421 = 4315, 4316, 444
- Employer’s social contribution: 646 = 436
- Payment of net salary: 421 = 5311/5121
Conclusion: medical subscriptions and health insurance for employees, within the legal thresholds, are non-taxable benefits and fully deductible for the company. Coverage for family members is treated as taxable income.