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Global Payroll Team
Written by Global Payroll Team
Last updated May 7, 2026
Expert Reviewed
Payroll in Romania
Tax in Romania
Immigration in Romania

Romania map

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Employer of Record/PEO and Payroll Services in Romania

One of the most competitive and dynamic economies in the European Union, Romania presents an attractive market opportunity with access to the wider EU market. Romania is strategically positioned at the crossroads of Central, Eastern and South-Eastern Europe and offers a diversified industrial base, strong IT and business services capabilities, and rich natural resources, including natural gas, salt, coal and agricultural land.

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Doing Business in Romania

Romania continues to offer a business-friendly environment supported by EU market access, a competitive tax framework, and a skilled workforce. The country remains well positioned for manufacturing, shared services, technology, logistics, and engineering activities. Employers should, however, keep track of frequent legislative and tax updates affecting payroll, employment, and indirect taxes.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Romania is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banking Hours: generally from Monday to Friday, with branch opening hours varying by institution

Working Week

The standard working week is from Monday to Friday and normal working time is generally 8 hours per day and 40 hours per week

Labor Law

Romanian law governs employment relationships performed in Romania and provides mandatory employee protections under the Romanian Labour Code and related legislation. Employment contracts must comply with statutory requirements on minimum wage, working time, leave, dismissal protection, and mandatory registration in the electronic employee register.

Main Industries

Automotive, information technology, business services, petrochemicals, construction materials, food and beverages, agriculture, energy, logistics and tourism

GDP Growth

0.7%

Dates & Numbers

yyyy/mm/dd

Official State Name

Romania

Population

21,739,400

Capital

Bucharest

Major Languages

Romanian

Currency

Romanian leu

Internet Domain

.ro

International Dialing Code

+40

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Romania
Bucharest, RO
4:03 pm, June 4, 2026
26°C
light rain
63 %
Wind Gust: 14 mph
Clouds: 100%
Sunrise: 5:33 am
Sunset: 8:54 pm

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Payroll

The minimum gross base salary guaranteed to full-time employees is set by Government Decision. In 2026, the gross monthly minimum wage is RON 4,050 and is scheduled to increase to RON 4,150 from 1 July 2026.

Electronic payslips are acceptable in practice if payroll documentation is properly maintained

Payslip

Payroll and employment records should be retained in line with Romanian statutory archiving requirements

Reports

20 working days of paid annual leave

Annual Leave

Sick leave is generally paid at 75% – 100% depending on the case and may extend up to 183 days in many situations

Sick Leave

126 days of paid maternity leave and 10 working days of paid paternity leave

Maternity & Paternity Leave

20 working days’ minimum notice for dismissal

Employee Termination

No provision

13th month salary

RON 4,050 per month, increasing to RON 4,150 from 1 July 2026

Minimum Wage

Overtime is generally compensated with paid time off, or with a salary increase of at least 75% where time off cannot be granted

Overtime

No statutory severance pay unless provided by law, collective agreement or contract

Severance Pay

PEO Romania

Mercans PEO (Professional Employer Organization) services in Romania provide a comprehensive HR outsourcing solution for foreign companies to establish a local presence, compliantly hire and manage employees, handle HR, payroll, benefits, tax compliance, and other administrative tasks, while reducing costs and administrative burden.

Through our PEO in Romania, we provide services that are flexible and cost-effective for companies seeking to outsource their HR and payroll processes. As a Professional Employer Organization, Mercans offers a range of services including employee benefits, payroll administration, and compliance with Romanian employment laws. By entrusting their HR and payroll needs to Mercans, companies can focus on their core business activities and ensure a smooth and efficient HR operation.

Partnering with our PEO in Romania presents the fastest and most efficient way to enter the Romanian market.

Contact us to explore how PEO Romania solutions from Mercans can support your seamless expansion!

Benefits of Hiring an Employee through a PEO in Romania

Expanding your business into Eastern Europe? Partnering with a PEO in Romania is a strategic way to hire local employees quickly, compliantly, and cost-effectively without the complexities of establishing a legal entity. Here’s how a Romania PEO can support your global hiring goals:

Rapid Market Entry

A PEO Romania solution allows you to onboard local talent in days instead of months. By bypassing the entity setup process, you can launch operations in Romania faster and start building your presence immediately.

Local Compliance Management

Romania has a detailed legal and tax framework, with frequent updates to labour laws, benefits, and social contributions. A Romania PEO helps support compliance with local employment regulations, helping you reduce legal risks and penalties.

Cost-Efficient Expansion

Establishing a company in Romania comes with registration, legal, and administrative costs. Using a PEO in Romania helps you reduce overhead by outsourcing payroll, contracts, and benefits management without compromising control.

Streamlined HR Administration

From drafting compliant employment agreements to managing sick leave and annual holidays, a PEO Romania provider handles all HR functions efficiently. This lets your internal team stay focused on business growth, not bureaucracy.

Risk Mitigation

Romania’s evolving labour and tax framework can pose risks for foreign employers. A PEO in Romania acts as your local HR and legal partner, helping you stay up to date and minimizing exposure to labour disputes or fines.

Access to Skilled Workforce

Romania boasts a highly educated, multilingual workforce, particularly in IT, finance, engineering, and customer service. A Romania PEO connects you with local talent that understands the market and can contribute to your long-term success.

Scalable Hiring Solutions

Whether you’re testing the market or scaling a regional operation, a PEO Romania solution offers the flexibility to hire or adjust your team size with ease, supporting dynamic business needs.

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Tax and Social Security

Romanian tax residents are generally taxed on worldwide income, subject to domestic rules and applicable tax treaties. Salary income is subject to personal income tax and mandatory social contributions, while employers are also liable for labour insurance contributions.

Tax

Romania generally applies a 10% flat personal income tax on employment income. Companies operating a multi-country payroll should also note that the standard VAT rate increased in 2025 and the standard corporate income tax rate remains 16%.

16%

Corporate Income Tax

10%

Personal Income Tax

21%

Sales Tax

21%

VAT

Social Security

Mandatory salary-based contributions generally include pension insurance and health insurance paid by the employee, and the labour insurance contribution paid by the employer. Contribution rates can vary in special cases, but the standard structure for most employment income remains stable.

37.25%

Social Security Rate

2.25%

Social Security Rate for Employers

35%

Social Security Rate for Employees

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Employment Law

Romanian legislation provides a structured framework for employment relationships, distinguishing between employees, independent contractors, and other forms of engagement. The Labour Code regulates key matters such as contract formalities, working time, leave, disciplinary procedures, health and safety, and dismissal protections.

Employment Agreement

Employment contracts must be concluded in writing and in Romanian. The contract must include mandatory clauses such as job title, workplace, salary, working time, paid leave, notice conditions, and other minimum terms required by law.

Working condition

Normal working time is 8 hours per day and 40 hours per week. The maximum legal working time may not exceed 48 hours per week including overtime, subject to the applicable reference period and statutory conditions.

Leaves

The Romanian Labour Code entitles employees to a minimum of 20 working days of annual paid leave. Public holidays are additional and are not included in annual leave. Employees may also benefit from maternity, paternity, sick leave, parental leave, and other statutory leave categories depending on eligibility.

Employment termination

Termination of employment must follow the formal requirements of Romanian law. In case of dismissal, employees are generally entitled to at least 20 working days’ notice, while longer periods may apply by contract or for management resignations. Collective dismissal and redundancy rules include additional procedural requirements.

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20 working days

Minimum notice period for terminating an employee

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17 days

Total number of public holidays

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40

Working hours per week

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Unprescribed

Total number of days for Compassionate & Bereavement Leave

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Immigration

EU, EEA and Swiss nationals can enter Romania and stay for up to 90 days, after which registration formalities apply for longer residence. Non-EU nationals generally need a work authorization and a long-stay visa for employment, followed by a residence permit issued by the General Inspectorate for Immigration.

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Residency permits

A long-stay visa for employment is generally issued for 90 days. After arrival, the foreign national must apply for a residence permit with the General Inspectorate for Immigration. Residence permits are typically granted and renewed in line with the employment relationship and applicable immigration category.

Work Permit validity

Generally up to one year, subject to renewal

Required Documents

Meet all of the legal provisions and employer’s requirements for the position

Possess no criminal record that would prevent the individual from working in Romania

Provide a medical certificate that states the individual’s capability to carry out the tasks required for the job

Fall within the yearly quota for foreign citizens who may be granted a work permit.

The employee will also need to apply for a long-stay visa and provide the following supporting documents:

  • The work authorization obtained by the employer, where required
  • Proof of accommodation in Romania
  • A valid passport
  • Recent identifying photos, where requested
  • Proof of medical insurance for the duration of the visa period
  • Police clearance or background check, where required
  • Evidence of sufficient means of support, if requested
  • Travel arrangements and other supporting documents required by the consular authority.

Compliant, reliable, error-free and touchless payroll in Romania

Build the best team and hire top talent compliantly in Romania. Get in touch with Romania payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in Romania and how does it work for foreign companies?

    An Employer of Record in Romania acts as the legal employer of your workforce in Romania while your company retains operational control over their work. The EOR handles employment contracts, payroll, tax filings, social security contributions and full compliance with Romanian labour and employment law. This enables international companies to hire staff in Romania without setting up their own legal entity.

    Why should businesses use an EOR instead of establishing a legal entity in Romania?

    Using an EOR allows companies to enter the Romanian market quickly and avoid the time, cost and regulatory burden of establishing a local subsidiary or branch. The EOR takes care of HR, payroll, benefits administration and labour-law compliance so the business can focus on its core operations and growth.

    How does payroll outsourcing in Romania ensure compliance with tax and labour regulations?

    Payroll outsourcing in Romania ensures compliance by managing salary payments, withholding income tax, making social security and health-insurance contributions, and filing required reports. The provider stays current with Romanian regulations (for example payroll filings, contribution rates, employee records) and maintains robust processes to reduce risk of penalties or legal non-compliance.

    Can an Employer of Record in Romania hire employees and manage work permits for international companies?

    Yes. An EOR in Romania can hire both Romanian nationals and foreign nationals on behalf of an international company. It can assist with work permits, long-stay visas or residence requirements for non-EU employees, ensuring all employment and immigration formalities are handled properly under Romanian law.

    What are the main benefits of using EOR and payroll services in Romania for global expansion?

    Major benefits include rapid entry into the Romanian market without entity formation, lower upfront and ongoing administrative cost, full compliance with Romanian labour, tax and social-security laws, reduced HR and payroll burden on internal teams, flexibility to scale the workforce up or down as needed, and access to local employment expertise for smoother operation and risk mitigation.

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