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Your Guide to Hiring Employees and Contractors in Romania

Capital city

Bucharest

Currency

Romanian Leu (RON)

Language(s)

Romanian

Ease of doing business

Easy

Payroll frequency

Monthly

Employer taxes

6.25%

Payroll

Payroll Cycle

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.

Employer Cost

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.

Working Hours

Work Week

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

Employment Termination

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.

Notice period

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.

Probation periods

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

These details are subject to change by the respective government and regulatory authorities in each country.

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