← Tax Optimization · Individuals
Pillar III and private health insurance — the shared 400 €/year cap
Many employees believe they have two separate 400-euro caps — one for the voluntary pension, another for health insurance. In fact it's a single cap, shared between both.
What the law says
Contributions paid to a voluntary pension fund (Pillar III) and premiums paid for private health insurance are deducted from taxable income — but together, up to a shared cap of 400 EUR a year, not 400 EUR for each separately.
If the employer pays the contribution itself (directly from gross salary, as a benefit), the deduction applies automatically in the payroll calculation. If you pay the contribution or premium yourself directly, it must be declared through the Declarația Unică to benefit from the deduction.
Art. 78 para. (2) letter a) Cod fiscal.
How it applies, in numbers
Illustrative example: if you pay 250 EUR/year to Pillar III and 200 EUR/year for private health insurance, you paid 450 EUR in total — but only 400 EUR is deducted from taxable income, not the whole amount. If you pay 300 EUR total for both, the whole amount is deducted, because you stay under the cap.
Common mistakes
The typical mistake is assuming each benefit has its own 400-euro cap — that's not how it works, the combined total matters. The second mistake is forgetting to declare the contribution through the Declarația Unică when you pay it directly, not through the employer — without declaring it, the deduction doesn't apply automatically.
