Tax and Health Insurance Contributions on Pensions: How They Are Calculated and How Much Pensioners Keep

Pensions exceeding 3,000 RON per month are subject, under certain conditions, to both the health insurance contribution (CASS) and income tax. Both amounts are automatically calculated and deducted by the institution paying the pension, so the recipient receives the net amount directly, without having to take any action themselves.

The amount deducted varies according to the size of the pension, and the way in which the calculation is made affects the sum actually received each month.

How pension tax is calculated

Under the Tax Code, pension tax is withheld at source, meaning the pensioner does not submit declarations or pay this amount themselves. The calculation is carried out monthly by the paying institution, and the funds are deducted before reaching the recipient's account.

The institution paying the pension must transfer the tax to the state budget by the 25th of the month following the one for which the payment is made.

The tax rate is 10% and applies to taxable income.

Starting with income from August 2025, taxable income is calculated by deducting from the gross pension the tax-free amount of 3,000 RON and, where applicable, the health insurance contribution.

When CASS is payable

CASS is only due on the portion of the pension exceeding 3,000 RON per month. Accordingly, those with pensions of up to 3,000 RON do not pay this contribution. A rate of 10% applies to the amount above this threshold.

The calculation formula is: CASS = (Gross pension – 3,000 RON) × 10%.

Under current legislation, the obligation to pay CASS on the portion of the pension exceeding 3,000 RON applies until 31 December 2027. Different rules for the subsequent period may be established by a later legislative act.

Calculation example for a pension of 6,300 RON

For a gross pension of 6,300 RON, CASS is calculated only on the portion above the threshold: 6,300 – 3,000 = 3,300 RON as the calculation base. The contribution is 3,300 × 10% = 330 RON.

The tax base is obtained as follows: 6,300 – 3,000 – 330 = 2,970 RON. The tax is 2,970 × 10% = 297 RON. The pensioner ultimately receives 5,673 RON net.

Calculation example for a pension of 3,500 RON

For a gross pension of 3,500 RON, CASS applies only to the amount above 3,000 RON, so the calculation base is 500 RON, and the contribution is 50 RON (10% of 500 RON).

For income tax purposes, the tax-free amount of 3,000 RON and the CASS of 50 RON are deducted from the gross pension, resulting in a taxable base of 450 RON. The 10% tax applied to this amount comes to 45 RON.

Thus, from a gross pension of 3,500 RON, 50 RON in CASS and 45 RON in tax are deducted, leaving the pensioner with 3,405 RON.

Who deducts the tax and CASS

Pensioners are not required to take any action regarding these payments. For pensions within the public system, the Casa Națională de Pensii Publice, through its territorial offices, calculates, deducts, and transfers both CASS and income tax.

The same obligations apply to sectoral pension funds, as well as all institutions or administrators paying other types of pensions, including private and voluntary ones.