Your guide to payroll in Romania 

Understanding payroll in Romania is essential for businesses aiming to stay compliant with the country’s employment and tax regulations. 

Employers are responsible for calculating salaries, withholding applicable taxes and deductions, and maintaining accurate payroll records to meet local payslip and documentation requirements.

Romanian labor laws clearly define payment schedules, minimum wages, tax deductions, and social security contributions that employers must follow.

In this article, we explore how Romania payroll works, the key compliance considerations employers should be aware of, and how Payoneer Workforce Management can help businesses streamline employee payments and manage payroll efficiently.

Romania payroll: Wages and other payments

Understanding the key aspects of wages, statutory payments, and employee benefits is essential for employers managing payroll in Romania. 

Here are a few things you need to know when you pay employees in Romania: 

Payroll cycle in Romania 

The Romanian labor laws mandate that all employees shall be paid at least once a month, usually on the last working day of the month. 

Minimum wages

As an employer, you should adhere to the minimum wage in Romania that has been determined by the country’s law. Employees in Romania are entitled to a minimum payment of 4050 RON. 

Overtime pay

According to the Romanian labor law, the maximum number of hours that an employee can work is 48 hours a week. 

If an employee works beyond the maximum legal working hours, they receive 75% of the base salary for the time worked, or are paid off within the next three months. 

Sick pay

Romanian employees are entitled to 183 sick leaves within a year. In case of serious illnesses, this period can be extended by 90 days. 

The amount they will receive during their absence depends on the number of days of absenteeism. 

Maternity pay

Romanian female employees, who contribute to the social security system of Romania, are entitled to maternity pay of 126 days. 

Paternity pay

Employees in Romania can take paternity leave for 5 days, for which they shall receive full payment. Additionally, if they attend childcare courses, they are entitled to a leave of another 10 days. 

Severance pay

In Romania, severance pay is not considered a statutory benefit mandated by law unless it is specified in a collective agreement by the employer and the employee. 

Payroll in Romania: Contributions and deductions

In Romania, you must withhold personal income tax and social security contributions from employee wages and remit them to the tax authorities as required by law. You can make these deductions before they pay employees in Romania.

Personal income tax (PTI)

Employees have to pay a personal income tax in Romania at the rate of 10% on their income. However, there are exceptions to certain income sources for which you do not have to pay salary tax in Romania.

There are some other social security contributions in Romania which you, as an employer, have to deduct from your employee’s gross salary:

• Employee social security (CAS)
• Employee health insurance (CNAS): 10% 

Other employee benefits

There are some other benefits that Romanian employees enjoy. They are mentioned below: 

Annual bonus: In Romania, it is not mandatory to provide 13th-month pay. However, several companies give out performance bonuses, which are given during Christmas. 

Gift vouchers: Romanian employees offer gift vouchers that are tax-exempt up to 300 RON per person per occasion, such as Christmas, Raster, etc. 

Night work benefit: Employees in Romania who work at night are entitled to this benefit.

Childcare leave: Employees in Romania are entitled to receive childcare leave for 2 years from a child’s birth and 3 years in case the child is suffering from a disability. 

Bereavement leave: Romanian employees are entitled to 3 days of paid bereavement leave for special family events. 

Romania payroll compliance best practices

Employers should follow certain best practices to ensure their payroll processes remain compliant with Romanian labor and tax regulations. 

As an employer, you should:

• Ensure that the employees are registered with the relevant authorities before they start working. 
• Calculate the income tax and social security deductions from the salaries of employees and remit them to the tax authorities on time. 
• Maintain accurate documentation for authentic payroll management. The wages of employees, their deductions, benefits, and all other terms of the employment should be clearly documented to maintain transparency. 
• All employees should receive the legally mandated wage and other statutory benefits. 

It is important that you keep yourself updated about the changes in Romanian tax and labor laws in order to maintain payroll compliance in Romania. 

Your options for payroll services in Romania

Employers can hire and pay employees in Romania in the following ways:

• Businesses can set up a local entity: For businesses to operate seamlessly in Romania, setting up a local entity is one of the most feasible options. This allows organizations to hire employees directly and function as a normal business. However, this may not be ideal for small businesses that want to pool talent from across the globe.
• Businesses can hire independent contractors: When businesses have project-based work, they can hire independent contractors. These professionals are highly skilled in their respective fields and do not fall under the classification of regular employees. They are also responsible for managing their own taxes, thereby reducing the administrative burden on the business.
• Businesses can seek the help of a Temporary Work Agency: Typically, an EOR can facilitate onboarding and payment, with compliance support. However, an EOR in Romania may not be permitted. So, for assistance with navigating the country’s specific labor laws. This allows businesses to engage and pay Romanian talent.

A temporary work agency like Payoneer Workforce Management makes it easy for businesses to manage employee payments across borders. 

By partnering with Payoneer Workforce Management, organizations can simplify operations and payroll management in Romania and streamline the employment costs in Romania and administrative efforts.

Book a demo today!

FAQs

1. What currency are employees paid in Romania?

Employees are paid in Romanian Leu, abbreviated as RON. The salary is transferred directly to the employee’s bank account. 

2. Can foreign businesses hire employees in Romania without opening a local office?

Opening a local office may be time-consuming. Small businesses looking forward to hiring skilled employees from across the globe can take the help of a Temporary Work Agency. This is not only efficient, but also helps optimize the employment costs in Romania. 

3. What records should employers maintain to ensure payroll compliance in Romania?

Employers have to maintain accurate records of the employment contracts and payslips that shall contain details of the salary payments, salary tax deductions, social security contributions, and other terms related to the employment. 

4. What is the minimum wage in Romania?

When employers pay employees in Romania, they should maintain a minimum wage of 4050 RON as mandated by the Romanian law.