Employer of Record Services for Romania

Employing in Romania

Employing in Romania requires an understanding of its unique labour market and regulatory framework. Romania, known for its diverse landscapes and cultural richness, has a labour code that businesses must adhere to, ensuring compliance with employment contracts, social security contributions, and tax obligations.

TopSource Worldwide provides invaluable support in this regard, offering expert guidance and services to navigate these complexities. We assist with EOR, payroll management, adherence to local labour laws, and handling all administrative aspects of employment, ensuring smooth business operations for companies looking to establish or expand their workforce in Romania.

Our Expertise

Managing a global workforce in Romania

Managing a workforce in Romania involves navigating complex employment laws and ensuring compliance with various regulations. TopSource Worldwide offers expert guidance that helps businesses adhere to the Romanian labour code, social security contributions, and tax reporting obligations to the National Tax Administration Agency. Our comprehensive services ensure that companies can confidently manage their workforce in Romania, maintaining compliance and reducing administrative burdens.

Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.

Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.

Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success.

Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

Nutreco

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”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

Sungard

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”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Supervisor

Client based in Ft Worth, Texas, USA

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GLOBAL EXPANSION STRATEGY

Personalised Employer of Record services in Romania

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in Romania. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Romania-based employees.

End-to-end Romania payroll services

Looking to expand into Romania? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Romania expansion initiatives.

Global entity management

Venturing into the Romanian market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

Accounting

Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in Romania

Entering the Romanian market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in Romania.

Start your Romania expansion

Romania Insights

Key insights into Romania's landscape

VAT rates: Romania has a standard VAT rate of 19%, with reduced rates of 9% and 5% for specific goods and services.

Ease of Doing Business rank: Romania ranks 55th in the World Bank's Ease of Doing Business Index, indicating a moderately favourable business environment.

Consumer Confidence Index: As of 2022, Romania's Consumer Confidence Index was 102.3, reflecting positive economic sentiment.

Employee maternity/paternity leave: Maternity leave is 126 days, and paternity leave is 10 days, emphasising support for new parents in the workforce.

Employee termination period: Standard notice for termination varies but is typically 20 to 45 days, depending on employment contract terms and duration.

Employee salary pay date: Wages are usually paid monthly, with specific pay dates outlined in employment contracts and subject to labour laws.

Bank holidays: Romania observes national holidays, including New Year's Day, Union Day, and Christmas, with a total of 13 public holidays in a year.

An Overview of Employing in Romania

Social Security Systems

The Romanian Social Security System covers the following circumstances: maternity, retirement, sickness, invalidity, death and unemployment.

Public Healthcare

Everyone in Romania who pays social security contributions is entitled to public healthcare.

Private Healthcare

It is common for larger companies to offer private healthcare as part of the employment benefits package.

Employer’s Costs

The employer’s cost consists of 2.25% applied to the gross salary towards work insurance (plus bonuses or additional benefits).

Employee’s Costs

Employee contributions:

Social (Pension) contribution 25% (applied on the gross salary)
Health insurance contribution 10% (applied on the gross salary)
Income tax 10% (applied on the gross amount minus the 2 above contributions)

Pension

In Romania, when men reach 65 and women reach 63 they are entitled to pension, provided that they have accumulated at least 15 years of service and are not currently employed.

Contractual Provisions

Contract of employment

There is a requirement for a fully executed original contract prior to the start date, one copy is held by the employer and the other one by the employee. It is mandatory to provide a contract in Romanian language. At PEO Worldwide we provide with the contract in English and Romanian.

The law for using electronic signature in the labour contracts was issued in May 2021 requiring both parties to have an advanced electronic signature, provided by a recognized provider. At TopSource Worldwide, we continue to provide with original contracts (wet signed) in Romania. Before onboarding, the employee must undergo medical examination by a labor doctor.

Probationary Period

The probationary period in Romania has a maximum of 90 calendar days (or 120 days for management positions).

For temporary contracts, the probationary period varies according to the length of the contract, between 5 and 30 days.

Working Hours

The standard working hours are 8 hours a day or maximum of 40 hours a week. Hours of work need to be recorded by law.

Overtime

Overtime is permitted, but is limited to 48 hours per week. The average amount of overtime cannot exceed 48 hours per week over a period of 4 months.

Overtime is compensated by free time or by payment of at least 175%. (200% for official days off).

Notice Period

During probation period, each party can interrupt the contract under the condition of giving notice equivalent to one day to the other party.

After probationary period, the employer who wishes to terminate the employment needs to provide with 20 working days’ notice, or 45 working days for managing positions.

The standard notice period for resignations after probation period is 20 working days, or 45 working days for managing positions.

Severance Pay

There is no severance pay provisioned by the law.

Termination

The employment can be terminated:

Upon contractual end date, for fixed-term contracts.
By resignation from the employee.
Upon agreement between parties, on the date both parties agree.

Termination from the employer:

Due to redundancy/position not being required in the company: it needs to be strongly documented and the position cannot be covered/replaced in future.
Dismissal: If the employee is no longer suitable due to the below reasons:
– Low performance, sustained by the documentation of annual/periodical valuation of personnel
– Serious or repeated disciplinary offences
– Juridical issues (arrested)
– Medical reasons that impede the employee from performing the role duties

Holiday & Leave

Holiday Entitlement

The holiday entitlement starts on the hire date of the employee. The minimum holiday entitlement is 20 working days per year. It is common practice to provide with at least 21 working days. If the holiday is not taken within 18 months after accrual, the days are forfeited. The employee continues to receive the regular wages (inclusive of any bonus if applicable) while on leave.

Public Holidays

Employees required to work on public holidays should be granted time off in lieu within 30 days, or financial compensation equal to no less than 100% of their basic salary.

Sick Leave

The salary continues to be paid during sickness, under the condition of providing a medical certificate.

The payment is between 75%-100%, dependent on the illness for a maximum of 180 days/year.

The first 5 days are paid by the employer; any subsequent days are covered by the employer who will then be entitled to a refund from the state upon application. The reimbursement period is between 6 months and 3 years.

Maternity Leave

Employees are entitled to 126 days of medical leave for pregnancy (out of which at least 42 days are after birth). This is paid initially by the employer but reimbursed by the state, within 1 to 3 years. During maternity leave, the employee will be entitled to 85% of the gross salary and taxed, but exonerated of the 10% health contribution.

Mothers are entitled to request up to 2 years to stay at home with the child (paid by the State). The employee receives 85% of the net salary, capped at 8500 RON (as of June 2021). Upon returning to work, the employee is protected and cannot be dismissed within 6 months of returning to work.

Paternity Leave

The employee is entitled to 5 days-off paid by the employer within the first eight weeks of the child’s birth, or 10 days if the father proves that he attended a parenting course, which is officially recognized.

Childcare Leave

Romanian Labour Laws stipulate that one parent may take up to 2 years’ childcare leave following the birth of a child.

Additional Leave Entitlements

Employees are entitled to paid leave on the following occasions:

Marriage of the employee – 5 days
Birth of the child – 5 days
Marriage of the employee’s child – 2 days
Death of spouse, child, parents, parents in law – 3 days
Death of grandparents, brother, sister – 1 day
Blood donation – 1 day
Leave for studies – maximum 10 days (if the employer has not offered training courses once in 2 years)

These days off are paid by the employer and should be provisioned in the internal regulation of the company.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Discover our payroll benefits

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in Romania

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

Understand the different types of EOR taxes
Stay up-to-date on the latest changes to EOR tax regulations
Avoid penalties for non-compliance

Speak to our team

Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013.

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Reviewed by:

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about Romanian employment solutions

What is an Employer of Record in Romania?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in Romania. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in Romania?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in Romania. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in Romania?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in Romania. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.