Employer of Record in Romania

Businesses can only operate smoothly in Romania if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Romania below, to avoid any compliance issues.

Employment Contract Requirements

In Romania, employment agreements are usually indefinite, but fixed-term contracts are possible under specific conditions. Temporary and part-time contracts are also common. All contracts, regardless of type, must be in written form and signed by both parties, with the official language being Romanian. Common employment contract types include:

• Detailed job description, outlining duties and responsibilities
• Commencement date (including employment duration for fixed-term contracts)
• Defined working hours and frequency/date of payment
• Basic salary as well as other compensation or benefits

Onboarding Process

We can help you get a new employee started in Romania quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Romania

A regular workday spans 8 hours, and full-time employees adhere to a standard 40-hour workweek. The weekly rest period should not be less than 48 hours, typically observed with Saturdays and Sundays as the customary days of rest.

Overtime in Romania

Tasks performed outside regular working hours are considered overtime and require employee consent. Overtime is limited to 8 hours per week, often compensated with extra time off within 60 days. Alternatively, overtime is paid at a rate of 175%. Working on public holidays can be compensated with extra time off or double the standard pay rate.

Probation Period in Romania

Probationary periods are permissible, with a maximum duration of 90 days, extending to 120 days for managerial roles. Distinct regulations govern probation in the context of fixed-term contracts.

Fiscal Year in Romania

1 January - 31 December is the 12-month accounting period that businesses in Romania use for financial and tax reporting purposes.

Payroll Cycle in Romania

The payroll cycle in Romania is usually monthly, with employees being paid by the last working day of the month.

Minimum Wage in Romania

The minimum wage for employees in Romania is typically 23.13 RON per hour, amounting to ~3,700 RON per month for a typical 40 hour work week.

Bonus Payments in Romania

In Romania, there is no legal obligation for employers to provide a 13th salary payment.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 10% on top of the employee salary in Romania.

Employee Payroll Tax Contributions

In Romania , the typical estimation for employee payroll contributions cost is around 35%.

Individual Income Tax Contributions

Individual income tax in Romania is calculated according to a flat rate of 10%.

Pension in Romania

Old-age pensions are granted to those who reach the standard retirement age and meet the minimum contribution period to the public pension system. Currently, the standard retirement age for women is 61 years and six months, gradually rising to 63 years by January 2030, while men have a standard retirement age of 65 years.

In Romania, work permits and visas are essential for employers hiring foreign workers. The process involves obtaining a work permit, applying for a long-stay visa, and ensuring compliance with specific legal requirements. Visa options include the Long-Stay Employment Visa (D/AM), Intra-Company Transfer Visa, Highly Skilled Worker Visa, and Digital Nomad Visa. Employers must navigate administrative procedures, prove the necessity of hiring foreign talent, and manage cultural and language barriers effectively.

Mandatory Leave Entitlement in Romania

The annual leave entitlement in Romania is 20 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Romania

Romania has 15 national holidays in a year.

Paid Time Off in Romania

Employees have a legal right to receive up to 20 days of paid annual leave annually, adjusted based on their length of service. Unused leave is handled as follows:

• Employers must carry forward remaining leave to the first six months of the following year.
• If situations like prolonged illness prevent leave utilization, the employer must grant the unused leave with the employee's agreement within 18 months, starting from the year following the accrual of the vacation time.

Maternity Leave In Romania

In Romania, maternity leave is 126 days long, with 63 days allocated for both pre and post-birth periods. After giving birth, mothers must take at least 42 days of maternity leave. Other aspects of maternity leave include:

• Social Security provides a maternity allowance equal to 85% of the employee's regular salary.
• Maternal risk leave is available in cases of health risks to the mother or child, and it comes with statutory benefits amounting to 75% of the usual entitlements.

Paternity Leave In Romania

A father or partner involved in child care can receive 10 days of paid leave, regardless of the child's birth or adoption status. This leave extends to 15 days with completion of an infant care course. Paternity leave can be used within the first eight weeks after the child's birth, with a written request to the employer.

Sick Leave In Romania

As per the labor code, employees contributing to the pension and social insurance system are entitled to sick leave of up to 180 days per year, extendable by 90 days. Key points about sick leave include:

• For the first five calendar days, the employer provides sick leave coverage on working days.
• Starting from the 6th calendar day, the FUNASS (Unique National Fund of Health Insurances) fund takes over financial support.
• Sick pay, ranging from 75% to 100% of the average monthly income from the past six months, depends on the illness.
• To claim sick leave benefits, the employee must provide a medical certificate from a licensed physician.

Parental Leave In Romania

After maternity leave, either parent can take childcare leave (parental leave) until the child reaches two years old (or three years for disabled children). Eligibility is based on the employee's tax contributions in the previous year of employment.

Bereavement Leave

In the event of the death of a direct family member, employees are entitled to three days of paid bereavement leave. To avail of this benefit, the employee must submit the death certificate along with a formal request to the employer.

Wedding Leave

Employees are entitled to five days of paid wedding leave and two days of paid leave in case of the wedding of an employees child. In this case, the employee is required to request the employer to go on leave and after the wedding, provide the wedding certificate.

Termination Process in Romania

There is no at-will termination in Romania for employers and termination must be done for just cause and with written reason. Reasons for dismissal can either be linked to the employee or to the businesss economic situation. Possible grounds for just dismissal include:

• Redundancy
• Gross misconduct
• Underperformance or lack of skills
• Loss of ability to perform the agreed tasks

Notice Period in Romania

Minimum notice periods vary depending on whether it's an employee dismissal or if the employee chooses to terminate the contract:

• For employee dismissal, the mandatory notice period is at least 20 working days, regardless of the contract type.
• Employees can resign by providing written notice, with a notice period not exceeding 20 business days for non-management roles and 45 business days for management positions.

Severance in Romania

Severance pay is not mandated by statutory regulations in Romania unless specific conditions have been established within a collective agreement.