Hire in Romania
Romania PEO &
Employer of Record
Hire & manage teams remotely in Romania without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Business Language
Romanian
Salary Currency
Romanian Leu (RON)
Payroll tax
6.25%
Payroll Cycle
Monthly
Time zone
UTC +3
Capital city
Bucharest
Hire Employees in Romania
The NNRoad Advantage ☺
Pay as you go
Global account manager
Compliance
Fast Onboarding
Foreigner Visas
Platform
Employer of Record in Romania
01.
Candidate Selection
02.
Employee Onboarding
03.
Compliance & Payroll
04.
Payroll Reporting
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in Romania
01.
Compliance & Payroll
02.
Payroll Reporting
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in Romania
Employee Income Taxes:
Individual income taxes in Romania are levied on the earnings of residents and non-residents who derive income from Romanian sources.
Tax Brackets
Income between 27,601 RON and 66,000 RON: 16% tax rate
Income between 66,001 RON and 120,000 RON: 25% tax rate
Income exceeding 120,000 RON: 35% tax rate
Sample Calculation
Income up to 27,600 RON: 27,600 RON * 10% = 2,760 RON (tax owed in the first bracket)
Income between 27,601 RON and 50,000 RON: (50,000 RON – 27,600 RON) * 16% = 3,616 RON (tax owed in the second bracket)
Now, we’ll sum up the taxes owed in each bracket:
Total tax owed = 2,760 RON + 3,616 RON = 6,376 RON
Therefore, with an annual income of 50,000 RON, your income tax liability in Romania would be 6,376 RON.
Employer Costs in Romania
Employer Contribution
2.25% – Unemployment Insurance
4% – Social Security (Pension)
Total employment cost: 6.25%
Employee Contribution
25% – Pension
10% – Health Insurance
Total employee cost: 35%
Benefits & Insurance in Romania
In Romania, all employees and employers are covered by pensions, healthcare, and unemployment insurance. Employees are required to make contributions to each of these schemes. A single contribution is made by the employer.
Pension Fund
In Romania, the mandatory pension contribution encompasses two pillars of the pension system: the state-provided pension (Pylon 1) and the mandatory private pension (Pylon 2). The mandatory pension contributions of both the employer and the employee are shared between the state pension system administrator and private insurance companies to support these two pylons.
Healthcare Insurance
Insured people in Romania receive a minimal package of medical services that covers them from the first day of illness or the date of the accident until they recover from their illness or accident. The Ministry of Health updates this package on a regular basis.
Unemployment Insurance
To be eligible for unemployment benefits, unemployed people must meet the following criteria:
- To have contributed for at least 12 months in the previous two years (by the time the application is filed).
- Making no more money than the country’s minimal gross wage
- Not being able to meet the retirement requirements
- To be entered into the database of employment agencies in the town where they have their domicile or residency
Working Hours in Romania
Working Hours Per Week
The maximum permissible working time is 48 hours per week, including overtime hours, while the maximum average working time is 40 hours per week and 8 hours per day.
Overtime
Romania’s rigorous working-hours laws are even more stringent than those in the EU. Overtime will be repaid with paid-off hours over the next 60 days to compensate for overtime. If compensation cannot be provided within that 60-day period, the employee will be compensated for the overtime by adding a bonus to his or her salary. Overtime compensation cannot be less than 75% of the base salary.
Termination Laws in Romania
The employment contract may be terminated by mutual consent, or by notice given by one of the two parties under Romanian law. The reasons for dismissal must be serious, and there are two types of valid reasons: objective and economic. Individual or collective dismissal for economic reasons is possible. Dismissal for reasons unrelated to the employee’s person is the termination of an individual employment contract based on the cancellation of the employee’s position for one or more reasons unrelated to the employee’s person. The position must be terminated with immediate effect and for a valid and serious reason.
Severance
There is no statutory severance pay in Romania. Individual dismissals are only entitled to severance pay if it is stipulated in the individual or collective employment agreement. The only time the Labour Code stipulates that a severance payout (without defining the amount) should be agreed upon is when the employee is physically or mentally incapable to perform the job’s requirements.
Notice Period
During the probationary period after being employed, no notice of termination is required. Following that, during the main contract, a minimum of 20 working days notice is required for resignation and dismissal. Both the employee and the employer are affected. For management roles, the notice period is usually extended to 45 days.
Employment Contract in Romania
Employment Contract
Individual employment agreements are usually for an infinite (open-ended) period of time. Individual work contracts may, however, be for a fixed-term or part-time basis. Any type of individual employment contract must be signed in writing, in Romanian, and with the approval of both parties.
Probation Period
To verify the employee’s abilities, the parties may agree on a probationary period of up to 90 calendar days for ordinary positions and up to 120 calendar days for managerial positions, which will be specified in the employment contract.
Types of Leaves in Romania
Annual Leave
By law, employees are entitled to up to 20 days of paid annual leave per year, prorated according to the number of days worked. Employers must pay employees their allowance at least five working days prior to the commencement of the absence.
Sick Leave
Employees insured by the pension and social insurance systems who have made required contributions are entitled to up to 180 days of sick leave in a year, with a possible 90-day extension, under the Labor Code.
The employer provides the first five calendar days for working days only; beyond that, the FUNASS (Unique National Fund of Health Insurances) fund supports the payment of sick leave.
Depending on the type of illness, sick pay ranges from 75% to 100% of average monthly salary for the previous six months.
Maternity Leave
Employees who are pregnant are entitled to 126 days of paid maternity leave.
Maternity leave is divided into two parts: prenatal leave, which requires a woman to take at least 63 days before her projected due date, and postnatal leave, which requires the employee to take the remaining 63 days after the child is born.
The FUNASS (Unique National Fund of Health Insurances) pays the maternity payment at a rate of 85% of the calculation based on the average of the employee’s monthly gross salary during the six months before the maternity leave began.
Paternity Leave
The father/partner is entitled to 5 to 10 days of paid leave; if the employee takes an infant care course, the leave is extended to 15 days. Paternity leave can be taken at any time after the baby is born, within a certain time frame.
Parental Leave
Following maternity leave, one of the parents is eligible for childcare leave (parental leave) until the kid reaches the age of two (three in the case of disabled children), provided that the employee has paid taxes in the previous year.
The employee is entitled to a monthly wage of 85% of the average regular wage received in the previous 12 months prior to childbirth from the competent Romanian authorities.
Public Holidays in Romania
Public Holidays
- New Year’s Day – January 1-2
- Unification Day – January 24th
- Orthodox Good Friday – April 22nd
- Orthodox Easter – April 24-25
- Labour Day – May 1st
- Children’s Day – June 1st
- Orthodox Pentecost – June 12-13
- St Mary’s Day – August 15th
- St Andrew’s Day – November 30th
- National Day – December 1st
- Christmas – 25-26