Employee benefits. From a Legal, Tax and Accounting Perspective

Author:Tanya FREE, KPMG

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Keywords:monetary benefits, non monetary benefits, tax, IFRS, options

Abstract:
The Romanian legal framework does not contain a single piece of legislation dedicated exclusively to employee benefits.\r\n\r\nInstead, the range of benefits available to an employee is stipulated within several sources of primary legislation, including labour, social security and unemployment legislation, as well as under collective bargaining agreements and individual labour contracts.\r\n\r\nEmployee benefits may be divided into:\r\n1. Monetary benefits. These types of benefits include:\r\n– salary related benefits, stipulated mainly under (i) the Romanian Labour Code, (ii) the collective bargaining agreements concluded at different levels (national, branch, company level), (iii) the individual labour contract concluded between the employee and the employer or, in certain cases, (iv) company internal rules/policies, and may consist of:\r\n• salary (including compensation received during paid annual leave and other paid leave);\r\n• various types of allowances (such as non-competition, mobility, temporary inactivity allowance, retirement allowance, business trips/ secondments allowance etc.);\r\n• various types of bonuses and compensation (for overtime work, night work, work performed during statutory holidays or other days-off, etc. conditions, for seniority, for termination of the individual labour contract, etc.);\r\n• other various types of benefits (performance bonus, profit sharing, housing expenses, tuition expenses, meal tickets, etc.);\r\n– social security benefits, stipulated mainly under social security legislation, as well as under collective bargaining agreements and consisting of:\r\n• compensation received during paid sick leave;\r\n• various types of compensation received during pregnancy/maternity/other assimilated periods;\r\n• various supporting amounts received in special situations such as death of a close relative, spouse, birth of a child, etc.;\r\n• pro-rata/full contribution to transport and accommodation/treatment expenses made by employees sent on recovery leave/leave for the treatment of occupational illness;\r\n\r\n2. Non-monetary benefits (benefits in kind). These types of benefits are generally stipulated under the individual labour contract concluded between the employee and the employer, or, in certain cases, under company internal rules/policies and may include:\r\n• general medical (including dental) insurance coverage;\r\n• life insurance coverage;\r\n• supplementary accident/ occupational illness insurance coverage;\r\n• company car and/or cellular telephone;\r\n• housing facilities;\r\n• free/subsidized/discounted goods or services, etc.\r\n

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