Your Guide to Hiring Employees and Contractors in Romania
Romanian Leu (RON)
Ease of doing business
In Romania, the payroll frequency is monthly; work between the first and last day of the month is typically paid on the last working day of the month.
Minimum Wage Requirements
There are three minimum-wage classifications in Romania: Construction jobs, jobs requiring advanced education, and jobs not requiring advanced education. In 2021, those rates are as follows:
RON 2300/month for non-graduate positions
RON 2350/month for graduate positions
RON 3000/month for construction positions
Individual Income Tax
The individual income tax rate is 10%. Income tax is calculated according to a flat rate.
Employees pay 10% in Personal Income Tax (PIT), 25% pension, and 10% health insurance. Funds are withheld from paychecks and paid to the government by the employer on a monthly basis.
There are some employees exempt from the PIT. These currently apply to eligible in these categories: IT, R & D, People with Disabilities, Construction. In each case, specific provisions must be met.
The employer cost is generally estimated at 6.25% of the employee salary.
Labor insurance contribution: 2.25%
Disability cost: 4.0%
Employers must also make contributions of 2.25% for labor insurance for all workers and pension contributions of 4% or 8% for each employee depending on the circumstances.
Monday to Friday.
Overtime Pay & Maximum Hours
Overtime payment is mandatory. It can be compensated financially or in the form of paid time off. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 32 hours of overtime, per month. For additional hours, employees are paid:
150% of average salary per hour, during weekdays
200% of average salary per hour, during weekends
For the purposes of employment contracts, Romanian law distinguishes between managerial positions and operational positions.
Employment termination can happen at the end of a contract or probation period, by request of the employee, or by request of the employer.
Termination by request of the employer before the end of an employment contract can be done for several reasons including physical or mental inability to work, professional inadequacy, and redundancy. The employer is required to provide reasons for dismissal in writing.
Restrictions on Termination
Employees cannot be terminated during leaves, during temporary disability, during quarantine, or during pregnancy if the employer knew about the pregnancy.
Employees have the right to at least 20 days of notice before termination.
Employees should give 20 days’ notice before leaving an executive-level position and 45 days for a management position.
Open term probation period
The probation period when having an employment contract for an open term cannot exceed:
- 30 calendar days for disabled persons
- 90 calendar days for operational positions
- 120 calendar days for management positions
Fixed term probation periods
The probation period in case of a fix term employment agreement cannot exceed:
- 5 working days, for an agreement that does not exceed 3 months
- 15 working days, for an agreement between 3 and 6 months
- 30 working days, for an agreement exceeding 6 months
45 working days, for an agreement exceeding 6 months involving employees occupying a management position