Employer of Record in Romania

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

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.

Hiring in Romania means navigating local labor laws, mandatory employee benefits, payroll taxes, and strict employment regulations. These requirements aren’t always intuitive, especially if your team lacks in-country legal or HR expertise. An Employer of Record steps in as the legal employer for your hires, managing all compliance-related responsibilities. This includes issuing locally compliant contracts, registering employees with relevant authorities, processing payroll, and handling social security contributions and taxes in line with national laws.

By handing over these complexities to an EOR, your business avoids costly compliance errors and the time required to master local employment standards. You can focus on growing your team and operations while trusting that the legal and administrative foundation is solid. Whether you're making one strategic hire or building out an entire team, the EOR keeps you compliant, removes guesswork, and reduces the risk of legal or financial penalties, without requiring you to open a legal entity or maintain a local HR team.

Managing payroll in Romania requires careful attention to the country's specific tax structure, which includes employee contributions totaling 35% (25% CAS and 10% CASS) and employer contributions ranging from 2.25% to 10.25% of gross salary.

All payroll taxes must be declared and paid monthly by the 25th of the following month using Form 112. Employers must register with multiple authorities, maintain detailed records, and ensure compliance with minimum wage requirements and industry-specific provisions. The Romanian payroll system features a flat income tax rate of 10% with personal deductions available for lower incomes.

Using payroll management software can help employers consolidate payroll data, automate calculations, and stay compliant with Romania's frequently updated tax regulations, reducing the risk of penalties and ensuring accurate and timely payments to both employees and authorities.

Running payroll in Romania is complex, especially when you're hiring without a local entity. Local laws determine everything from tax withholdings and reporting deadlines to benefit contributions and currency requirements. Missteps can lead to fines, payment delays, or unhappy employees. An Employer of Record takes this burden off your plate by handling the full payroll process. Acting as the legal employer, the EOR ensures you remain compliant with all payroll-related obligations, while still allowing you to manage your team’s day-to-day work and performance.

Key Ways an EOR Supports Payroll in Romania:

• Compliance Assurance: Ensures payroll aligns with local tax laws, labor regulations, and statutory deadlines.
• Payroll Processing & Tax Management: Calculates salaries, applies correct tax withholdings, and submits required reports.
• Benefits & Social Security Contributions: Manages employer obligations for pensions, health insurance, and other legal entitlements.
• Contract Generation & HR Administration: Drafts compliant employment contracts and supports onboarding, terminations, and HR tasks.
• Currency Payments: Issues timely salary payments in local currency, ensuring employees are paid accurately and on time.

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.

As of 2025, Romania has limited the number of new work permits to 140,000 per year, and the Immigration Department has temporarily suspended online appointments for work permits until October 2025 due to fraudulent activity.

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 is entitled to 5 days of paid paternity leave at 100% of their normal average earnings. This leave can be extended 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 183 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.

Administering employee benefits in Romania requires more than just offering a standard package. Local labor laws often mandate specific entitlements, from health insurance to paid leave, and the rules can change without warning. Romania also has unique standards for what an attractive, competitive benefits package looks like. For businesses without in-country expertise, meeting these obligations and expectations can quickly become risky and expensive. An Employer of Record acts as your compliance partner, ensuring all benefits are provided according to the latest legal requirements and without administrative strain on your internal team.

Beyond compliance, an EOR brings clarity and consistency to a process that’s often complex and fragmented. They handle enrollments, ensure accurate employer contributions, manage communications with local providers, and keep everything properly documented. This means employees get what they’re entitled to, and you avoid the headache of navigating benefits systems in a foreign market. Whether you're hiring one person or building a larger team, an EOR provides a clear, dependable structure that lets you offer competitive benefits without taking on unnecessary risk or workload.

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.