Payroll Services in Romania

Romania has moved almost the entire social contribution burden onto the employee. Since the transfer took effect in January 2018 the employer pays a single contribution, the contribuția asiguratorie pentru muncă, at 2.25% of gross. There is no separate unemployment, accident, wage guarantee or health contribution on the employer side – those are financed from the CAM and the state budget. Total employer cost is gross plus 2.25%, at every salary.

The employee carries the rest: pension (CAS) at 25%, health (CASS) at 10%, and income tax at a flat 10% on what is left after those two – 6.5% of gross. Total deductions are 41.5% and net pay 58.5% of gross. Pension surcharges of 4% and 8% apply to work in particular and special conditions, such as mining or aviation, and those are employer-paid, but they do not touch ordinary commercial employment.

There is no ceiling on any of it. Pension, health, the CAM and income tax run on the full base at every salary, with no upper limit and no reduced band. The only threshold in Romanian employment is a floor rather than a cap – the part-time rule below. Of every RON 100 of employer cost the employee receives RON 57.21 and the state RON 42.79, and only RON 2.20 of that came from the employer.

That is almost exactly the wedge in Hungary, where net pay is about 58.8% of employer cost and the employer pays 13%. Romania has not made employment cheap; it has made the employer’s share almost invisible. That matters when you compare offers rather than payroll costs: a Bucharest salary has to be set knowing that 41.5% comes off it before the employee sees anything.

A large share of Romanian professional and technical work has been contracted rather than employed – through a microîntreprindere, a small company taxed on revenue rather than profit, or a PFA, a self-employed individual. The attraction was arithmetic: an employment contract costs the employee 41.5% of gross, while a micro-enterprise paid a low revenue tax and distributed profit as dividends at a low rate.

That gap narrowed sharply on 1 January 2026, from both ends. The micro-enterprise revenue threshold – EUR 1 million as recently as 2022 and EUR 500,000 in 2024 – was EUR 250,000 for 2025 and is EUR 100,000 for 2026, tested on the previous year’s revenue together with any linked enterprises, so splitting a business across two companies does not help. The 1% and 3% rates were replaced by a single 1% under Emergency Ordinance 89/2025, and dividend tax rose from 10% to 16% under Law 141/2025.

A micro-enterprise must also have at least one employee – a full-time contract, part-timers adding up to full-time hours, or a management contract paid at least the minimum wage – and since Emergency Ordinance 8/2026 a newly registered company has 90 days to hire one. A company that quietly has no employee loses the regime.

For a foreign employer the practical question is recharacterisation. The Fiscal Code sets out criteria for dependent activity, and where an arrangement meets them ANAF can treat the income as salary and assess the contributions and tax that should have been paid, with interest and penalties. An engineer working fixed hours under a foreign manager, on the company’s laptop, invoicing the same company every month through their own SRL, is not a supplier in any meaningful sense.

This rule produces the largest gap between what a foreign employer expects Romanian payroll to cost and what it does cost. Where a part-time employee’s monthly gross is below the minimum wage, pension and health contributions are still due on a floor – from July 2026, RON 4,125 a month, the minimum wage of RON 4,325 less the RON 200 non-taxable amount. The employee’s own 25% and 10% are withheld on actual pay; the difference up to the floor is paid by the employer and cannot be recovered from the worker.

The arithmetic is unforgiving because the shortfall is charged at the full 35%. A half-time employee on RON 2,162.50 generates an employer top-up of about RON 687 a month; a quarter-time employee on RON 1,081.25, about RON 1,065. With the CAM, the employer’s burden on top of gross becomes about 34% at half time and about 101% at quarter time, against a headline of 2.25%. The table below sets it out line by line.

The exceptions are narrower than employers hope. The floor does not apply to pupils and students up to 26, apprentices up to 18, people with a disability, old-age pensioners, or an employee whose several contracts together reach the minimum wage. That last one is the only exception that helps an ordinary employer, and it needs the employee’s declaration to each employer.

This may change. A bill to abolish the floor from 1 January 2027 was before the Chamber of Deputies in September 2026; its final vote was postponed over the budget cost, and the government has proposed phasing the change in. Until a law is published the floor applies, and any workforce built on part-time shifts – support rotas, seasonal retail, a flexible pool – needs pricing against it rather than against 2.25%.

Meal vouchers – tichete de masă – are close to universal in Romanian employment and still worth having, but they are no longer a clean exemption. The maximum is RON 45 per working day under Law 201/2025, held at that level until at least March 2027. Since January 2024 they attract income tax at 10% and health contributions at 10%, but not pension and not the CAM. A voucher costs the employer its face value and delivers about 81% of it to the employee, against 58.5% through salary – a real advantage, and smaller than older guidance implies.

Beyond vouchers, the Fiscal Code lets a defined list of benefits be paid free of income tax within a monthly ceiling of 33% of base salary – items such as accommodation, meals and sports subscriptions – with individual limits inside that ceiling. The 33% applies to the basket as a whole, so the usable capacity is usually well below it.

Holiday vouchers – vouchere de vacanță – are optional for private employers and carry their own tax treatment. International guidance often describes them as a general obligation; a private employer has no duty to provide them.

The honest summary is that Romania’s benefit-side efficiency is real but modest. The voucher and the 33% basket might move a few points of a package from a 41.5% deduction to a much lighter one – worth doing, and not worth rebuilding a pay policy around.

Annual leave is a minimum of 20 working days, and collective agreements and contracts often give more. There are 16 distinct public holidays in 2026 rather than the usual 17, because Pentecost Monday and Children’s Day both fall on 1 June. Notice on dismissal is at least 20 working days. There is no statutory severance for ordinary dismissal or redundancy – only what a collective agreement or the contract provides, which for many foreign employers means nothing at all.

Sick pay has changed twice since August 2025. For ordinary illness the flat 75% is gone: since 1 August 2025 the indemnity is 55% for a certificate of up to 7 days, 65% for 8 to 14 days and 75% from 15 days, under Law 141/2025. The employer pays days two to six and the health fund pays from day seven. And for certificates issued from 1 February 2026 to 31 December 2027 the first day is unpaid under Emergency Ordinance 91/2025 – once per illness episode since Law 64/2026, and not at all, since 1 June 2026, for maternity, maternal risk, oncology, hospitalisation and national health programmes.

Child-raising leave is generous and has also changed. The indemnity is capped at RON 8,500 gross, and since 1 August 2025 health contributions of 10% are withheld from it, which takes the net maximum to RON 7,650.

Two administrative points close this out, and both are enforcement priorities. Every new employee must be registered in REGES-Online before their first working day; the system replaced REVISAL from the start of 2026 under Government Decision 295/2025, and although a court annulled that decision at first instance in May 2026, the ruling is not final and the system remains in use. And under article 164 of the Labour Code, as amended in 2024, an employee can be paid the minimum wage for at most 24 months from hiring, after which a higher base salary is mandatory – a rule almost never mentioned in English-language material.