Employer of Record & PEO in Romania
Hire & manage teams remotely in Romania without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
How NNRoad Employment & PEO Services Work?
NNRoad provides professional employment organization (PEO) & employer of record (EOR) services for companies looking to hire and manage teams in Romania. Registering a legal entity in Romania as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD). NNRoad’s employer of record and PEO services enables companies to hire and manage employees in Romania in full accordance with local labor laws in under a week.
Employer of Record in Romania
Employer of Record (EOR) services are for companies who do not have a legal entity in Romania, but who want to hire in Romania. Employment and full liability are outsourced to NNRoad.
➊ You interviews & select the candidates you want to hire in Romania.
➋ NNRoad arranges a local labor contract with your new employee.
➌ NNRoad arranges a service contract between your organization & NNRoad.
➍ NNRoad organizes, manages & processes payroll in Romania in full compliance with local employment laws.
➎ You maintain a normal working relationship and manage your team in Romania while NNRoad manages payroll & HR liabilities.
- Engaging employees through local labor contracts including contract administration, engagement, extension termination and conversion to permanent hire
- On-boarding and off-boarding employees following local labor law practice
- Registration of employees with social security board and with tax office
- Complete payroll solution and mandatory benefit administration
- Employee management according to local laws, including employee record, time keeping, bonus and allowance management, expense and claims, and leave employee database management
- Payments to the Social securities and submission/payments of tax return
- Payment management, including invoicing customers/clients and salary payments
Payroll & PEO in Romania
Professional Employment Organization (PEO) services are for companies who have a legal entity in Romania, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.
➊ You interviews & select the candidates you want to hire in Romania.
➋ NNRoad organizes, manages and processes payroll for your local employees in full compliance with local employment laws.
➌ You maintain a normal working relationship and manage your team in Romania while NNRoad manages payroll & HR compliance.
- Registering and de-registering the necessary company and personnel information for payroll calculation in compliance with local rules
- Registering all local employees with the social security board, if required
- Calculation of gross salary, salary deductions, such as social insurances, unpaid leaves, etc., and net salary based on information provided by the Company including irregular payments such as incentive/bonus, allowance, etc. if applicable
- Pro-rata calculation for people who join/resign
- Providing a monthly payroll summary to the Company
- Monthly issue of electronic pay-slips
- Prepare annual payroll related reconciliation report
Advantages of NNRoad's Romania Employment Services
- With EOR/PEO solutions you can manage client meetings, sales, quality control, marketing, R&D and customer support without a local company in Romania.
- Pay as you go
- Dedicated account manager – One point of contact for multiple locations
- Employment & termination processing
- Complete payroll solution and statutory benefit according to local laws
- With EOR/PEO solutions you can hire staff while waiting for the registration of your company in Romania.
- NNRoad only works with professional locally licensed partners
- GDPR compliant
- NNRoad manages employee record timekeeping, bonus and allowance, expenses claims and personal leaves according to local law.
- NNRoad provides foreigner VISA application services, if needed
Employment Compliance in Romania
Taxes & Payroll in Romania
Employee Income Taxes:
In Romania, a flat personal income tax (PIT) rate of 10% is generally in place. There are, however, certain exceptions to this rule (e.g. the tax rate for dividends, the tax rate for income from the transfer of immovable property, the tax rate for income from gambling activities depends on the income level).
Employer Costs in Romania
2.25% – Unemployment Insurance
4% – Social Security (Pension)
Total employment cost: 6.25%
25% – Pension
10% – Health Insurance
Total employee cost: 35%
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.
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.
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.
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.
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
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.
Termination Laws in Romania
The employment contract may be terminated de jure, 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.
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.
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.
Holidays in Romania
Public Holidays in Romania
- 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
Paid Leave in Romania
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.
Employment Contract in Romania
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.
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
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.
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.
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.
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.
Immigration Laws in Romania
EU citizens seeking to work in Romania for longer than 90 days should apply for a registration certificate from the Romanian Office of Immigration. To stay for more than 90 days, non-EU citizens must obtain a residency permit.
Through an application from the employer, foreign workers must get work authorization from the Romanian Office of Immigration. Employers must demonstrate that they are a legal Romanian company and that they have made every effort to fill the position with a Romanian national.
They must also ensure that the potential employee is appropriately suited for the position, having received appropriate education and training.
There are different permits for foreign nationals in Romania, including permits for:
- Permanent employees
- Seasonal workers
- Cross border workers
- Nominal workers