Romania Employer of Record & Payroll Guide: Hiring, Compliance & EOR

Overview

Romania’s employment framework is governed by the Labor Code (Codul Muncii, Law No. 53/2003), with strict rules on contracts and employee protections.

All employees must have a written individual employment contract (contract individual de muncă), registered in REVISAL before their first working day. This is mandatory. Late or missing registration can trigger penalties.

The Labor Inspectorate (Inspecția Muncii) actively audits employers, focusing on working hours, health and safety, and proper registration. Employment terms are not flexible. Changes to key conditions, such as salary or role, generally require a formal written addendum signed by both the employer and employee.

Managing these updates correctly can be administratively heavy, which is why many companies use an Employer of Record to handle contract changes and ensure compliance.

Employment Conditions

Employment Contracts

Employment contracts in Romania must be in writing and are typically drafted in Romanian or in a bilingual format (Romanian and English). The Romanian version prevails in case of conflict.

Contracts must clearly specify the role, workplace, start date, contract type (indefinite or fixed-term), and compensation as a gross salary in RON, including payment terms.

They must also include working time (hours and schedule), annual leave (minimum 20 working days), probation period (if applicable), and notice periods for termination.

In practice, employers should also include:

• Confidentiality and data protection clauses  

• Non-compete terms (if used, with required compensation)  

• Benefits (e.g., bonuses, meal vouchers, insurance)  

• References to internal policies or company rules  

The contract must be signed before the employee’s first day and registered in REVISAL. Any changes to key terms require a written addendum signed by both parties.

Probation Rules

Indefinite-term contracts allow longer probation periods depending on role seniority, while fixed-term contracts are subject to stricter and shorter limits based on the contract duration.

Probation Period Limits in Romania

‍

Termination during probation requires a simple written notification without needing to justify the cause or provide a notice period.

Working Hours and Overtime

The standard workweek in Romania is 40 hours (8 hours per day), with total working time capped at 48 hours per week, including overtime.

Overtime must be compensated with paid time off within 90 days. If time off cannot be granted, it must be paid with a salary premium of at least 75% of the base rate.

Minimum Wage

As of 2026, the national gross minimum wage is 4,050 RON. Specific sectors, such as construction or agriculture, may have different statutory minimums or tax exemptions.

‍

Collective Bargaining

In Romania, employment terms may also be governed by collective agreements alongside individual contracts.

Company-level agreements are common in larger organizations and typically set internal standards for pay and working conditions. In some sectors, industry-level agreements establish minimum requirements that apply across all employers.

Where applicable, these sector agreements are binding and set baseline terms for areas such as compensation, benefits, and working conditions.

‍

Taxes & Mandatory Contributions

Romania operates a flat-rate personal income tax system combined with high social security contributions.

Personal Income Tax

The standard flat tax rate is 10%. This is applied to the net taxable income after deducting mandatory social contributions.

Mandatory Contributions

The following rates are standard for most private-sector employers:

‍

Reporting (Declaration 112)

Declaration 112 (D112) is Romania’s mandatory monthly payroll tax filing. It consolidates all payroll data, including employee salaries, income tax, and social contributions (CAS, CASS, CAM), into a single submission to ANAF.

Employers must file D112 and pay all related liabilities by the 25th of the following month. This is the core payroll com pliance requirement and must align with payroll calculations each cycle.

‍

Payments & Payroll Administration

Salary is typically paid monthly, though many companies split this into an advance (avans) and a final payment (lichidare).

While contracts may reference foreign currency, the actual payment to employees must be made in Romanian Leu (RON).

Employers are also obligated to provide monthly payslips detailing gross salary, deductions, and net pay.

Administrative Sequence

Before running payroll in Romania, employers must complete both tax registration with the National Agency for Fiscal Administration (ANAF) and employee registration in REVISAL.

• ANAF registration
  The employer must be registered for payroll taxes and social contributions. This enables filing of Declaration 112 and payment of income tax and contributions (CAS, CASS, CAM).  

• REVISAL registration
  Each employee must have a signed employment contract and be registered in the electronic registry (REVISAL) before their first working day. This includes key terms such as role, salary, working hours, and contract type.  

• Data alignment
  Contract terms in REVISAL must match payroll data reported in Declaration 112. Inconsistencies can be flagged during audits.  

Failure to complete these steps on time can result in administrative fines, particularly for late REVISAL registration or employing individuals without a properly registered contract.

Benefits

Statutory Benefits

Core benefits are covered through mandatory social contributions, mainly pension (CAS) and public healthcare (CASS). There is no separate employer-managed system for these, but employers must ensure accurate calculation and timely payment through payroll.

Meal Vouchers (tichete de masă)

Meal vouchers are not mandatory but are widely used due to favorable tax treatment. They are provided per working day, subject to a government-set daily cap, and are deductible for employers while being taxed more favorably than cash bonuses.

‍

Voluntary Benefits (Private Health, Pillar III Pensions)

Common additions to remain competitive.

• Private medical subscriptions are widely offered  

• Voluntary pension contributions (Pillar III) are tax-deductible  

• Tax exemption applies up to €400 per year per employee (for both employer and employee contributions)

‍

Vacation Vouchers

Vacation vouchers can only be granted for domestic tourism and are subject to specific tax treatment. They are commonly used as a cost-efficient alternative to bonuses and must comply with statutory rules on issuance and use.

‍

Leave

Annual Leave

Employees are entitled to a minimum of 20 working days of paid annual leave. Unused leave must be carried over for 18 months, and monetary compensation is only permitted upon contract termination.

Public Holidays

Romania observes approximately 17 public holidays. If work is required on these days, employees must receive compensatory time off or a salary premium.

Sick Leave

Employees can receive up to 180 days of sick leave per year. The first 5 days are funded by the employer, and subsequent days are reimbursed by the state's social health insurance fund. Indemnity typically ranges from 75% to 100% of average earnings.

Parental Leave

Maternity leave (concediu de maternitate) is 126 days, divided between prenatal and postnatal periods (with at least 42 days required after birth).  

Paternity leave is 5 working days, which can be extended if the father completes a childcare course.

‍

Employee Rights & Protections

Termination is strictly regulated. Employers must rely on valid legal grounds and follow the correct process, or risk reinstatement and back-pay.

Termination Grounds

Employers can only terminate employment on legally recognized grounds, including:

• Professional unsuitability (employee does not meet role requirements)  

• Disciplinary breaches  

• Redundancy (economic or organizational reasons)
  

Notice Periods

Statutory notice periods apply to both employer-initiated terminations and resignations, with a minimum of 20 working days for standard roles and typically up to 45 working days for management positions.

Procedural Requirements

For disciplinary cases, a formal internal investigation (cercetare disciplinară prealabilă) is required. The employee must be notified, heard, and allowed to respond. Failure to follow this process can invalidate the termination.

Severance

Severance is not universally required by law. However, it may apply:

• Under collective bargaining agreements  

• In certain redundancy scenarios  

• Based on company policy or contract terms

Your Option to Use an Employer of Record (EOR)

An Employer of Record (EOR) acts as the legal employer in Romania, handling employment contracts, payroll, tax filings, and compliance, while the client manages day-to-day work.

EOR is commonly used by foreign companies to hire quickly without setting up a local entity, or to support a small team in-market. It reduces setup time and removes the need to manage local payroll and registration requirements directly.

From a risk standpoint, the EOR takes responsibility for payroll accuracy and compliance with Romanian labor law. This helps reduce exposure to misclassification, filing errors, and administrative penalties.

If you want to assess whether an EOR is the right setup for hiring in Romania, speak with Knit.

‍

Frequently Asked Questions

Do I need a local entity to hire employees in Romania?

No. You can hire through an Employer of Record (EOR) without setting up a local entity. If you plan long-term operations or revenue-generating activity, a local entity may be more appropriate.

How long does it take to hire an employee?

With a local entity, timelines depend on registration readiness but are generally quick once set up. With an EOR, hiring can typically be completed within a few days, including contract setup and REVISAL registration.

What are the main employer costs on top of salary?

The primary employer-side cost is the 2.25% Work Insurance Contribution (CAM). Most other contributions (CAS and CASS) are employee-paid but withheld and remitted by the employer.

Can I pay employees in a foreign currency?

No. Salaries must be defined and paid in Romanian Leu (RON). Payments from foreign accounts are possible, but amounts must be reflected in RON.

Can I hire contractors instead of employees?

Only in limited cases. Romania applies strict rules on employment classification, and misclassification risk is high. If the working relationship resembles employment (fixed hours, control, exclusivity), it should be structured as employment.

What is REVISAL and why does it matter?

REVISAL is the national employee registry. All employment contracts must be registered before the employee’s first day. Missing or late registration can lead to fines.

Are benefits mandatory?

Core benefits (pension and health insurance) are covered through social contributions. Additional benefits like meal vouchers and private health insurance are not mandatory but are widely expected.

How do I stay compliant with payroll reporting?

Employers must file Declaration 112 monthly and ensure payroll data matches REVISAL records. All taxes and contributions must be paid by the 25th of the following month.

‍