Employer of Record (EOR) Romania

An Employer of Record (EOR) acts as the legal employer for workers in Romania, serving a pivotal role often referred to as a Global Professional Employer Organization (Global PEO). This role encompasses comprehensive oversight of various employment aspects, ensuring strict adherence to local labor laws and regulations. Key responsibilities involve the management of payroll, taxes, legally mandated benefits, and the creation of employment agreements.

Responsibilities of the Employer of Record (EOR) in Romania include:

  • Ensuring strict compliance with local employment laws for all workers.
  • Managing the intricacies of the local payroll process.
  • Handling the filing of employment-related taxes and essential paperwork.
  • Providing workers with accurate and timely payslips.
  • Facilitating the seamless distribution of workers’ salary payments.

Optimize your global expansion with our Global PEO services – a streamlined solution without the need for entity setup. Our Employer of Record (EOR) in Romania guarantees legal presence, compliance, and Intellectual Property (IP) protection, allowing your business to concentrate on its core functions. Facilitate smooth global mobility and work visas while building a diverse and efficient global workforce. Choose Mercans, your trusted Employer of Record in Romania, for a compliant and efficient employment experience for your global workforce.

Things you need to know before hiring in Romania

Employment Contracts in Romania

In Romania, individual employment agreements typically follow an unlimited (open-ended) term, though fixed-term or part-time contracts are also permissible.

As per the Romanian Labour Code:

Contract Form and Language

Employment contracts must be in writing, in Romanian, and based on mutual consent. Employers register the contract with the electronic employee program (ReviSal) before the employment begins.

Informative Obligations

Employers must inform candidates or employees about essential contract clauses before its conclusion or amendment. A preliminary check on the applicant’s abilities is mandatory, and information from a former employer is sought only after informing the applicant.

Medical Certificate Requirement

A medical certificate is mandatory upon hiring to assess the applicant’s fitness for the job. Absence of the certificate renders the contract null and void.

Essential Provisions Contracts must include:

  • Identity of parties
  • Place of work
  • Employer’s headquarters or domicile
  • Position and job description
  • Evaluation criteria, job-specific risks
  • Start date, expiration date (if applicable)
  • Annual paid holiday entitlement
  • Notice period conditions
  • Compensation details
  • Working time specifications
  • Reference to applicable collective labor agreement
  • Probationary period duration

Negotiable Clauses

Parties may negotiate additional clauses, including professional training, non-compete, mobility, and confidentiality clauses.

Fixed-Term Contracts

Limited to cases defined by the Labour Code, with specific details and duration mentioned. The same parties cannot sign more than three consecutive fixed-term contracts, and the cumulative duration, including extensions, cannot exceed 36 months.

Part-time Contracts

Must specify working time, schedule, conditions for schedule amendments, and exceptions for overtime.

Assistance in Negotiations

Both parties can seek assistance from third-party specialists, including lawyers, during contract negotiations.

Probation Period 

Employment contracts, whether for a fixed or open-ended term, have the flexibility to include a probationary period clause.

To assess an employee’s skills, the parties can mutually agree on a probationary period outlined in the individual employment contract. For standard positions, this period may extend up to a maximum of 90 calendar days, while managerial roles may have a maximum probationary period of 120 calendar days. In the case of disabled persons, the probationary period is limited to a maximum of 30 calendar days.

Either the employer or employee can initiate the cessation of the individual employment contract during or before the probationary period ends. This can be accomplished through written notification, without the need for motivation or prior notice. The flexibility in probationary periods allows for a fair evaluation of both the employer and employee’s compatibility, fostering a more informed decision-making process.

Notice Period

Either the employer or the employee holds the right to terminate the individual employment contract. If the employer initiates the termination, except for dismissal on disciplinary grounds or if the employee is detained for over 30 days, the employee is entitled to a notice period lasting no less than 20 working days.

In the event of termination by the employee’s decision to resign, a notice period must be observed. This period should not exceed 20 working days for standard positions and 45 working days for managerial roles. However, the employer retains the prerogative to waive the notice period, agreeing to conclude the contract based on the employee’s will at any time before the notice period’s conclusion. This flexibility in notice periods allows for a smooth transition and clear communication between both parties involved.

Working Hours

The standard working day comprises 8 working hours, and the workweek consists of 5 working days, summing up to 40 hours weekly. It is mandated that the total working hours for a week, encompassing overtime, should not exceed 48 hours.

Employees vs Independent Contractors 

Independent Contractor
Legal Relationship
Employment contract
Service Agreement
Subject to personal income tax and social contributions
Subject to income tax, but responsible for own social contributions
Entitled to employment benefits (e.g., health insurance, paid leave)
Generally not entitled to employment benefits
Working Hours
Typically has set working hours and follows the employer’s schedule
Has flexibility in determining working hours and schedule
Taxes and Contributions
Employer deducts and pays social contributions and taxes
Responsible for own taxes and social contributions
Liability for Work-related Accidents
Covered by employer’s insurance
Typically responsible for own insurance and liabilities.
Termination Process
Subject to labor laws, may require notice period
Typically follows terms outlined in the service agreement
Training and Equipment
Employer provides necessary training and equipment
Responsible for own training and may provide own equipment
Job Security
May have more job security due to labor laws
Typically considered a temporary or project-based relationship
Legal Recognition of Relationship
Recognized as an employment relationship
Subject to possible re-characterization by courts

Payroll in Romania

Minimum Wages

The current minimum wage in Romania is RON 3,300.00 per month, effective from October 1, 2023, and remains valid through December 2023. These figures are stated in Romanian New Leu and are presented before tax deductions.

Minimum Wage Overview:

Per month

RON 3,300.00

Per hour

RON 19.96

Please note that these rates are subject to change based on future regulations or adjustments.

Payroll Cycle 

In Romania, payroll is processed on a monthly basis, with compensation for work conducted between the first and last day of the month typically distributed on the last working day of that month.

Mercans’ Payroll Capabilities in Romania

Mercans excels in managing payroll intricacies in Romania, requiring meticulous attention and comprehensive solutions. Our Employer of Record services simplifies the payroll process, ensuring precision, compliance, and operational efficiency.

Payroll Cycle in Romania

The Romanian payroll operates on a monthly basis, involving stages such as setup, salary calculations, and reporting. Mercans’ Employer Of Record services expertly handle these tasks with precision.

Local Currency Payments

Making payments in the local currency enhances convenience and minimizes currency exchange complexities. Mercans facilitates this with multi-country payment solutions.

Payroll Setup, Processing, Administration

From configuring software to processing salaries and managing leave balances, Mercans’ EOR services adeptly handle every aspect of payroll efficiently in Romania.

Statutory Filings and Payments

Compliance with local regulations is paramount. Mercans provides seamless support for statutory filings, ensuring adherence to Romanian laws.

Trusted Payroll Partner in Romania

Our expertise in Employer Of Record services extends to multi-country payroll management, delivering accurate and streamlined payroll operations across various locations.

Social Security in Romania

Social Security Contributions

Social contributions for income from dependent activities in Romania are calculated based on a specific computation base, subject to potential modifications by the Social Security State Budget Law, the State Budget Law, or direct amendments to the Fiscal Code. These contributions adhere to EU social security coordination rules and Romania’s social security agreements.

General social contribution rates are outlined as follows:

Employee Contributions:

Social Insurance Contribution


Health Insurance Contribution: 10%

Monthly assessment base: Gross income from dependent activities.

Employer Contributions:

Social Insurance Contribution

4% for particular working conditions or 8% for special working conditions; no contribution for normal working conditions.

Labour Insurance Contribution: 2.25%

Monthly assessment base: Gross salary income derived from employment contracts, service relationships, or special statuses, with specific exceptions for certain sectors.

Employers compute and withhold social contributions during salary payments, declaring and remitting them to state budgets by the 25th day of the following month.

For benefits received based on employment contracts or contractual relationships, the obligation to compute and withhold social contributions depends on the payer’s tax residence.

Social contributions also apply to various income types, including:

Independent/Freelancing Activities and IP Rights:

Social Insurance Contribution

Calculation base chosen by the individual, not lower than 12 minimum gross salary incomes (RON 36,000 for 2023) or 24 minimum gross salary incomes (RON 72,000 for 2023).

Other Sources of Income (e.g., IP rights, investment income, rental income):

Health Insurance Contribution

Applicable thresholds based on annual gross/taxable income.

Other Taxes:

Value-Added Tax (VAT)

Standard rate of 19%.

Net Wealth/Worth Taxes

one in Romania.
Inheritance, Estate, and Gift Taxes: No inheritance taxes, and gift taxes are not levied.

Property Taxes

Building Tax:
  • Residential Buildings: Tax rate between 0.08% and 0.2%.
  • Non-Residential Buildings: Tax rate between 0.2% and 1.3% (0.4% for agricultural use).
  • New rules effective from 2025.
Land Tax:
  • Fixed amount per square meter, varying by land rank and use.
  • Paid annually, with a 10% reduction for full advance payment by March 31.

Employee Hiring Cost in Romania

Let’s consider a hypothetical scenario where the gross annual salary for an employee in Romania is RON 9,999.96. In addition to the salary, the employer incurs various costs, resulting in a total annual employer cost of RON 6,609.00. This includes specific components such as a labor insurance contribution of RON 225.00, a teleworking indemnity of RON 4,800.00, and a disability cost of RON 1,584.00. When combining the gross salary with these associated employer costs, the total annual cost to employ this individual amounts to RON 16,608.96. This breakdown provides insight into the overall financial commitment associated with employing someone in Romania, encompassing salary and various additional expenses.

Gross Annual Salary
RON 9,999.96
Total Annual Employer Costs
RON 6,609.00
Labor Insurance Contribution
RON 225.00
Teleworking indemnity
RON 4,800.00
Disability Cost
RRON 1,584.00
Total Annual Cost
RON 16,608.96

Personal Income Tax

Tax Residency for Romanian Citizens:

Romanian citizens domiciled in Romania are considered tax residents.
Taxable on worldwide income (excluding certain foreign-sourced salary income).
Exemptions available with tax residence certificates under double tax treaties (DTT).
Taxable in Romania for the year of residency change and the next three years if no DTT in place.

Taxation for Non-Domiciled Romanian Citizens and Foreign Individuals:

Romanian citizens not domiciled in Romania and foreign individuals taxed only on Romania-sourced income.
Taxed on worldwide income upon becoming Romanian tax residents (subject to DTT provisions).
Refer to the Residence section for residency criteria.

Personal Income Tax Rates:

Generally, a flat personal income tax (PIT) rate of 10% is applicable.
Exceptions for specific cases: dividends, capital gains, income from property transfers, and gambling activities.
Rates for these exceptions may vary based on income levels.

Local Income Taxes:

No local taxes on personal income in Romania.
Simplifies the tax landscape for individuals.

Employee Benefits in Romania

Statutory Leaves

Holiday Leave:

All employees are entitled to a minimum of 20 vacation days annually, in addition to national holidays.
Specific conditions warrant additional leave: employees under 18, those working in hazardous environments, or those with disabilities or blindness receive three extra days.
Anticipation of Paid Time Off (PTO) is possible with employer agreement; unused leave upon departure is deducted from payroll.
Unused annual leave must be rolled over within 18 months (extended to 3 years per jurisprudence).

Sick Leave:

Employees receive five days of sick leave at 75% of salary, paid by the employer.
Eligibility for up to 183 days of government-paid sick leave, dependent on industry and circumstances.
Doctor’s note and employer notification within 24 hours are required.
Reporting on a non-working day must occur on the next available working day.

Personal Leave:

Employees can take unpaid leave for personal reasons.

Careers Leave:

Parents are entitled to 45 days at 75% pay to care for a sick child (up to 7 years), a disabled child (up to 18 years), or a seriously ill child (up to 16 years).

Maternity Leave:

Pregnant employees receive 126 days off, starting 63 days before the estimated due date, with 42 days being compulsory.
Maternity leave is paid at 85% of salary by the government.

Paternity Leave:

Fathers are entitled to five days of paternity leave, and an additional five days can be granted for taking a child care course or having medical expertise in child care.
Paternity leave is paid at 100% by the employer.

Parental Leave:

Parents are entitled to 12 months of parental leave before the child turns two, with 85% of salary covered by the government.
One parent’s leave automatically grants the other one month; both parents must take at least one month.
Failure to do so results in the other parent being eligible for only 11 months of parental leave.

Overtime Pay

The employer is obligated to recompense overtime in either of two ways: (1) by providing paid time off within the following 90 days or (2) by making an additional payment, the sum of which must not be less than 75% of the base salary for the overtime worked. In the event that overtime work is performed on public holidays, the employer must choose between (1) compensating the employee with paid time off within the subsequent 30 days or (2) making an additional payment equivalent to at least 100% of the base salary. Although the law designates paid time off as the primary mode of compensation, most employees express a preference for overtime payment.

Termination, Severance Pay and Notice Period

In the realm of employment contracts, Romanian law draws a line between managerial and operational positions, each subject to specific considerations during the termination process.

Termination of employment may occur at the contract or probation period’s conclusion, at the employee’s request, or upon the employer’s request.

If the termination is initiated by the employer before the employment contract concludes, it must be based on valid reasons such as physical or mental incapacity, professional inadequacy, or redundancy. The employer is obligated to furnish written reasons for dismissal.

Constraints on Termination

Certain restrictions limit terminations; employees cannot be dismissed during leaves, temporary disability, quarantine, or pregnancy if the employer was aware of the pregnancy.

Notice Period

Employees are entitled to a minimum notice period of 20 days before termination. Executives are expected to provide a 20-day notice for resignation, while managerial positions necessitate a 45-day notice.

Severance Pay

Notably, Romanian law does not mandate severance pay as a requirement.

Work Permit in Romania

Securing a work permit is mandatory for non-EU/EEA/Swiss individuals employed in Romania, and this authorization is granted upon the employer’s request by Romanian immigration authorities. The work permit serves as a crucial document for obtaining a long-stay visa or residence permit, ensuring that foreigners cannot engage in work in Romania without obtaining this essential permit.

It’s important to note that a work permit doesn’t confer general permission for employment in Romania; rather, it is specific to a single company (as requested by the employer) and a particular position. Should a foreign individual transition from one company to another, obtaining a new work permit is mandatory, even if the existing one is still valid.

Recent enhancements have streamlined conditions for job changes within the same employer or changing employers, provided the single permit or EU Blue card remains valid. In such cases, individuals are exempted from providing proof of selection or payment of obligations to the state budget, as long as they can present a clean criminal record statement issued by Romanian authorities.

Various types of work permits cater to distinct employment scenarios:

Work Permit for Local Hires:

Requires local employment in Romania and the execution of a local employment contract.
Validity aligns with the local employment contract, automatically extending upon residence permit renewal (single permit).
Specific pre-conditions must be met by both the Romanian employer and the foreign national.

Work Permit for Highly-Skilled Employees:

Designed for foreigners employed in a highly-skilled position in Romania, necessitating a local employment contract.
Valid for up to 2 years, extendable.
Eligibility conditions mandate proof of high skills/qualifications and a salary at least 2 times the average gross salary.

Work Permit for Assignees:

Valid for a maximum of 1 year, not extendable due to legal restrictions.
Based on an employment contract and assignment letter issued by the employer outside Romania.
Certain conditions apply for foreigners with residence permits in an EU or EEA country or Switzerland.

Work Permit for ICT Worker:

Assignment duration varies, up to 3 years for managerial or specialist roles and up to 1 year for trainees.
Criteria include professional experience, technical or management knowledge, and consecutive months’ experience within the same company.
ICT permit holders from other EU states can begin activities in Romania upon the company’s application registration.

Top Cities with Remote Talent in Romania

Romania has emerged as a promising destination for digital nomads and remote workers, bolstered by its recent introduction of a special digital nomad visa. Positioned to become Europe’s new hotspot, Romania boasts key features that appeal to remote professionals, including reliable and fast internet connections, accessible housing, stunning natural landscapes, and a low cost of living.



As Romania’s largest city and the EU’s 5th largest, Bucharest serves as the main economic hub and offers a bustling big-city life. Recognized as the world’s best city for remote work, it hosts a thriving IT industry and startup scene.


Charming old town, historical sites, and extensive flight connectivity.

Co-working Options

Tech Hub, Commons Romania, Impact Hub, Hotspot Workhub.



With a population of around 250,000, Brasov stands out as a mid-sized town surrounded by picturesque landscapes. Ideal for nature enthusiasts and winter sports lovers, it is situated at the foot of the Carpathian mountains


Cobblestone streets, proximity to skiing options, and historical landmarks.

Co-working Options

KoolWerk, Hubba Hubba, Hub 1317.



Constanta, a port city on the Black Sea coast, offers a base for exploring the region. With around 300,000 inhabitants, it boasts affordability and good connectivity to Bucharest.


Black Sea coast exploration, historical sites.

Co-working Options

Tomis Hub Constanta, B.House.



As Romania’s third-largest city and a major tech hub, Timișoara features a pedestrian old town, parks, and a vibrant outdoor cafe culture. Well-connected to Hungary and Serbia, it’s an excellent base for exploration.


Historic charm, outdoor culture, proximity to neighboring countries.

Co-working Options

Workify Workify, Cowork Timisoara – The Garden.



Romania’s second-largest city, Cluj-Napoca, has evolved into an IT stronghold with a youthful population. It offers a mix of historical landmarks, universities, and a lively nightlife.


Educational institutions, nightlife, cultural events.

Co-working Options

Cluj Cowork, ClujHub, Silicon Forest.

Things to Consider Before Choosing Romania:

Schengen Status

Romania is an EU member but not part of Schengen. Visa considerations should align with this distinction.

Permanent Stay

For those considering permanent residence, setting up a local company involves costs and time.


Romania is a wonderful country, but it remains a conservative society.

International Image

While corruption and crime are concerns, they are unlikely to affect visitors directly.

Road Safety

Romania faces road safety challenges, and caution is advised for drivers.

EOR Solutions in Romania

  • EOR for Prospective Employees: Mercans offers seamless Employer of Record (EOR) solutions for businesses that have already identified their ideal candidates in Romania. Our services encompass every aspect of the employee lifecycle, ensuring compliance with Romanian labor laws and regulations.
  • EOR + Recruitment: For those seeking assistance in talent acquisition, our EOR and recruitment services provide a holistic solution. We tap into our extensive network and expertise to help you find, onboard, and retain top talent, streamlining your expansion into the Romanian market.
  • Visa Sponsorship and Global Mobility: Navigating the intricacies of expatriate employment is simplified through our visa sponsorship and global mobility services. We facilitate the relocation of your international workforce, ensuring compliance with Romania immigration and employment laws.
  • AOR for Contractor Payments: Businesses grappling with contractor payments can leverage our Assistance on Record (AOR) services. We handle the complexities of contractor payments, guaranteeing accuracy and compliance.
  • Converting Freelancers to Employees: Mercans supports the transition from independent contractors to permanent employees in Romania. Our expertise ensures smooth conversions while adhering to legal requirements.
  • HCM Integration: Integrate Mercans’ EOR services seamlessly with your HCM system in Romania for real-time data exchange, enhanced compliance, and cost-efficiency. Trust our expertise for a unified, compliant, and efficient approach, elevating your workforce management and payroll operations.


Embark on a confident entry into the Romanian market with Mercans’ effective Employer of Record (EOR) solution, guaranteeing strict compliance with the nation’s labor regulations. Effortlessly navigate the complexities of business expansion, cultivating a successful global footprint. Rely on Mercans’ local experts in Romania for comprehensive guidance on every aspect of expanding your business in the country.

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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