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Country Guide

Romania

Hiring in Romania at a glance

CURRENCY
Romanian Leu (RON)
WORKING HOURS
40 Hours
PUBLIC/BANK HOLIDAYS
15 days of national holidays, with at least 2 on Sundays
CAPITAL
Bucharest
LANGUAGE
Romanian
REMOTE WORKERS
MINIMUM MONTHLY SALARY
RON 3,300 gross
TAX YEAR
January 1 to December 31
DATE FORMAT
Day/Month/Year
MISCLASSIFICATION PENALTIES
Retroactive health insurance and social security contributions, including a duty of payment of overhead surcharges, related interests, and sanctions
FUN FACT
Romania is home to the world's heaviest building: the Palace of the Parliament in Bucharest. It contains 1.5 billion pounds of steel and bronze, and is the second-largest administrative building in the world, after the Pentagon.

Employer tax: 

2.5%

Work insurance contribution: 2.25%

Employee tax: 

45%

Social insurance: 25%

Health insurance: 10%

Income tax: 10% flat

Romania Employment Cost Calculator

Use our handy calculator to understand what are all the employment costs you have to consider in the Romania.

Provide us with some extra details and we will send you a full breakdown of the salary costs.

Employer of Record in Romania

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Usually, an Employer of Record is the legal employer in a country where the company isn't registered as an employer. However, in Romania, the employment model requires a temp agency licence. The temp agency handles all Bulgarian compliance aspects of employment, including local laws, payroll, taxes, statutory benefits, employment contracts and more.

the employer of Record is responsible for:

Ensuring their employment is compliant with local employment laws
Processing local payroll
Filing employment related taxes and returns
Issuing payslips to the employee
Distributing salary payments

How the employment model works

COMPANY

Maintains a direct relationship with the employee, allocates them work tasks, and manages their performance.

BOUNDLESS

Takes care of payroll, taxes, benefits, ensuring the employee and the company are compliant with all legal regulations.

EMPLOYEE

Signs an employment contract with Boundless and fulfils all of their obligations as a worker for the company.

Statutory Benefits in Romania

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Medical examination

Many employees are subject to preliminary medical examination, which take place when they are first hired and then in a certain cadence depending on age

Unemployment indemnity

Certain categories of Romanian employees are eligble for unemployment indemnity paid out by the Local Occupation Authority.

Common non-mandatory Benefits in Romania

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Working from home allowance
Supplementary health insurance
Stock options
Meal tickets
Private pension
Private health insurance
Gift tickets
Cultural tickets
Travel allowance

Employee Rights and Protections in Romania

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Employment agreement
Protection of personal information
Union membership
Safe place of work
Whistleblower protection
Reasonable accommodation
Equal treatment
Protection from discrimination
Redundancy payment
Paid time off: 20 days + bank holidays

Paternity: 10-15 days

Sick leave: unlimited

Parental: number of days/weeks not detirmend. Can be taken up to the child turning 2

Maternity: 126 days

Probationary period

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When working under indefinite-term agreement, the maximum probationary period that can be set for employees is 120 days for managerial positions, 90 days for all other jobs and 30 days for employees with disabilities.

Payment Frequency

Most employers pay monthly. Some pay biweekly but still calculate the amount for the whole month and consider the first two weeks’ pay as an advance on the monthly salary.

End of Employment

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The employer can terminate an employment agreement due to various circumstances, however a valid and justified reason for dismissal is required. Valid circumstances include de jure termination, during the probation period, by mutual agreement, in the case of a gross misconduct. 

Certain employees are protected from dismissal during given periods, which include illness leave, pregnancy, parental leave and performance of military exercise. In addition employees cannot be terminated for any reasons that may be deemed discriminatory such as their race, sex, language, political or union views, or religion. 

Employees have the right to challenge termination decisions in court. Proceedings usually take around one year, depending on complexity. If the employee wins, the court declares the termination invalid. Then, the employer reinstates the employee, covering the employee’s court expenses and paying the employee’s salary and other salary rights for the period between termination and reinstatement. On rare occasions, the employee can also receive additional compensation for moral damages.

Frequently Asked Questions

What are my options if I want to hire a worker in Romania?

While there are generally four ways of employing people across borders, not all are legal or sensible. Here is an overview of each way to employ a worker in Romania, outlining the potential cons.

 

HQ country employment & payroll

While the person is in Romania, they are employed and payrolled directly by the company’s HQ entity.
Cons: This may appear attractive, but it generally isn't legal in the long term. Paying the employee's salary won't be possible if the person is not a tax resident in the HQ country

 

Independent contractor agreements

People are locally registered as sole traders or limited liability company owners in Romania and invoice for their work. There is no direct employment relationship.
Cons: In Romania, this is not a compliant or legal way to engage full-time workers who work solely for your company. There will be challenges in attracting and retaining talent.
 
Direct local employer setup
 
The company sets up as a fully-compliant local employer. This often involves setting up a local entity and local tax registration.
Cons: Expensive, time-consuming, high-level of complexity. Unknowns around how obligations and costs will evolve over time. There will be a need to stay on top of changes in regulations.

 

Partnering with a temp agency licence holder in Romania

Employment is handled by a platform that specialises in employing people on behalf of customer companies. The temp agency licence holder helps to hire and pay employees.
Cons: For some countries, the ongoing costs may be higher than direct employment. Some education is needed to inform employees about how the employment relationship will work. In Romania, there are limitations to the length that this model is allowed.

How long does it take to set up a company in Romania?

Setting up a local company in Romania is relatively straightforward. However, the difficult part comes after the initial setup when payroll needs to be calculated and run every month, taxes filed, benefits extended, change of rules and regulations followed. Here is an overview of everything you will find yourself needing to do.

Can I employ people as independent contractors in Romania?

While many employers practice employing remote workers as independent contractors, it's a bad practice. If an individual is giving their full and undivided attention to your company in Romania, treating them as an independent contractor is a likely breach of Romanian employment laws and of those in your country.
 
Your company could be liable for fines on owed holiday pay, sick pay, social welfare payments, paternity benefit, maternity benefit, or other legal measures. Since the individuals you are working with do not receive the benefit of local employment laws and protections that are often afforded to people working full-time hours.
 

What does HR compliance mean in Romania, and why does it matter?

When you hire employees in Romania, you have certain obligations as an employer. HR compliance is about ensuring your policies and procedures respect all applicable laws and regulations regarding employment and work practices. Complying with Romanian labour law is fundamental for the correct running of your business - not only because these laws are in place to protect employees and guarantee their rights are safeguarded, but to minimise your risk of liabilities as an employer. Being compliant means respecting and following all local labour laws, sick leave and illness benefits, annual leave, minimum wage, tax credits, and working hours regulations.

How much does it cost to employ someone in Romania?

As with every other country, there are certain costs associated with employing a worker in Romania that come on top of the gross salary you are offering. A Romanian employer must make a work insurance contribution. To view the exact percentages and amounts given the salary you are planning to offer, you can use our handy calculator tool.

What does Employer of Record mean in Romania?

In Romania, an employer of record is not possible as a model and instead a temp agency licence is required from the employing company. With such a licence, Boundless is the legal employer of the individual, as far as the Romanian government, tax, and employment authorities are concerned. We are responsible for:
  • informing you about any pre-employment requirements
  • ensuring their employment is compliant with Romanian employment law
  • informing you about the length of the maternity leave, paternity leave, public holidays, illness benefits, medical benefits
  • providing a locally compliant employment contract
  • processing local payroll
  • filing employment-related tax returns
  • issuing payslips to the employee
  • distributing salary payments
  • payments to the local tax authorities
Customers that work with a temp agency in Romania are responsible for:
  • sourcing and recruiting their own workers
  • managing the employee’s day-to-day work load
  • contributing to the personal / professional development of the employee through their work
  • following any guidance we give on employment and HR best practices or legal obligations in Romania, such as the employment contract, public holidays, annual leave, sick leave, maternity and paternity benefits, probationary periods, overtime pay, statutory redundancy payments, liability insurance and many others
  • ensuring that payroll bills relating to their team are paid to Boundless before the cut-off point in each pay cycle

Who is responsible for filing and paying employees' taxes and social insurance contributions in Romania if employing through a temp agency?

Boundless as the legal employer through our temp agency licence files all pertinent taxes and social security contributions as they relate to the compliant employment of an individual in Romania.

How does Boundless ensure HR compliance in Romania?

We carefully choose employment lawyers or advisories to partner with in each country we operate in, including Romania. They ensure the Romanian employment contracts, and any other relevant documents required for new employees comply with the local jurisdiction. We have thorough discussions on specific norms such as payroll services, social protection, data protection, notice period or work-from-home regulations. Whenever a potentially sensitive issue arises in Romania, our internal team contacts the relevant firm to ensure all steps are taken to resolve it promptly.

What are the legal responsibilities of a company when they use the services of a temp agency like Boundless in Romania?

The company remains responsible and informs employees of the day-to-day management of the people and teams that are employed through Boundless, including any disciplinary or performance issues.
 
Boundless ensures compliance with Romania-specific procedures, practices and labour laws while employing people and teams on behalf of the company.

Do employees get all their rights and benefits when employed through a temp agency in Romania?

Any new employee that is locally employed through a temp agency licence holder such as Boundless gets full employment rights and benefits as specified in Romanian labour law. They get a locally compliant employment contract, statutory maternity leave, annual leave, sick leave entitlements, any relevant tax credit, and many more. 

What taxes do I need to pay in Romania?

Both Romania employers and Romania employees have to pay taxes. For employers, it's making work insurance contributions. Employees make contributions for social insurance and health insurance, and pay income tax. To get a clear overview of both employee and employer taxes, use our salary breakdown calculator, submitting any additional data needed and get a downloadable pdf like this one.

Choose Boundless as your employment partner in Romania
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