Romania requires 14-month salaries, mandatory meal vouchers, and specific holiday bonuses. Miss these requirements and you'll owe back payments plus penalties when employees find out. And they always find out.
Here's what nobody tells you upfront: Romanian labor laws heavily favor employees. Fire someone incorrectly and you're facing €10,000+ in severance plus legal fees. Get the employment contract wrong and the entire agreement could be invalid under Romanian law.
You've got three ways to hire in Romania. Each comes with different headaches and costs.
Option 1: Set up your own entity
- Cost: €15,000-40,000 upfront, €8,000-15,000 annual maintenance
- Timeline: 4-6 months minimum
- Complexity: Full tax registration, payroll system, legal compliance, HR infrastructure
- Makes sense when: Hiring 15+ people long-term, permanent market presence
Option 2: Hire contractors
- Cost: None upfront, but limited control
- Timeline: Immediate
- Risks: Misclassification fines (€5,000+), back taxes, legal disputes
- Makes sense when: Short projects (< 6 months), specialized skills
- Note: Hire with Columbus also handles contractor agreements and payments
Option 3: Use an employer of record (Recommended for most)
- Cost: $179/month per employee (USD)
- Timeline: 2-3 days to hire
- Complexity: None - we handle everything
- Makes sense when: 1-20 employees, testing markets, multi-country teams
If you're hiring 1-8 people, entity setup costs more than 4+ years of EOR fees. That's $179/month ($2,148/year per employee) versus €15,000+ upfront. An EOR like Hire with Columbus handles employment contracts, payroll, taxes, mandatory benefits, and compliance updates so you can focus on managing your team instead of Romanian labor law.
Ready to hire in Romania without the compliance headaches? Get started with Hire with Columbus.
What employment types can you use?
You've got three ways to bring someone onboard in Romania. Here's how the costs and risks compare.
Most companies rush to set up a Romanian entity, thinking it's the "proper" way to hire. But unless you're planning to hire 20+ people and stay in Romania for years, you're probably overcomplicating things.
How can you hire in Romania?
| Approach | Upfront Cost | Timeline | Best For | Key Drawbacks |
|---|---|---|---|---|
| Set up entity | €15,000-25,000 | 4-6 months | 20+ employees, permanent presence | High setup costs, ongoing compliance burden |
| Hire contractors | €0 | Immediate | Short projects (<6 months) | Misclassification risks, limited control |
| Use EOR | $179/month | 2-3 days | 1-50 employees, market testing | Monthly fee per employee |
Setting up your own entity makes sense if you're serious about Romania long-term. You'll need €15,000-25,000 for incorporation, plus ongoing costs for accounting, legal compliance, and HR infrastructure. The timeline? Four to six months before you can legally pay anyone.
That's four to six months while your perfect candidate waits. Or more likely, takes another job.
Hiring contractors sounds tempting because you can start immediately. But Romania's labor authorities don't mess around with misclassification. If someone works like an employee (set hours, using your equipment, taking direction), they probably are one legally. Fines start at €5,000 per misclassified worker, plus back taxes and social contributions.
Using an employer of record like Hire with Columbus means we become the legal employer in Romania while you manage the day-to-day work. Cost: $179/month per employee. Timeline: 2-3 days from signed contract to first day of work.
Here's the math: Five employees through an EOR costs $895/month. Setting up an entity costs €25,000+ upfront, then €3,000-5,000/month for payroll and compliance. The EOR pays for itself for at least the first two years, often longer.
Employment contract types in Romania
Once you've decided how to hire, you need to pick the right contract type. Romania offers several options, but most international companies use one of three.
Permanent contracts (Contractul individual de muncă pe durată nedeterminată)
This is your standard full-time employment contract. No end date, full benefits, and the strongest job protection for employees. Use this for core team members you want to keep long-term.
Romanian employees expect permanent contracts for regular roles. Offering anything else for a standard position raises red flags about job security.
Fixed-term contracts (Contractul individual de muncă pe durată determinată)
These have specific end dates and can last up to 36 months maximum. You can renew them once, but if you need someone longer than that, Romanian law automatically converts the contract to permanent.
Use fixed-term contracts for genuine temporary needs: covering maternity leave, seasonal work, or specific projects with clear end dates. Don't use them to avoid permanent contract obligations - Romanian courts will see right through that.
Part-time contracts (Contractul individual de muncă cu timp parțial)
Part-time employees get the same rights as full-time workers, just prorated. They're entitled to overtime pay if they work beyond their contracted hours, and you can't require them to work full-time hours regularly.
This works well for roles that genuinely need fewer hours, but don't expect significant cost savings. Romanian social contributions apply regardless of hours worked.
| Contract Type | Maximum Duration | Renewal Rules | Best For |
|---|---|---|---|
| Permanent | Indefinite | N/A | Core team members, standard roles |
| Fixed-term | 36 months | One renewal only | Temporary projects, maternity cover |
| Part-time | Permanent or fixed-term | Same as full-time equivalent | Roles requiring <40 hours/week |
Trial periods apply to all contract types. You can set a trial period up to 90 days for most roles, or 120 days for management positions. During this time, either party can terminate with just three days' notice.
When you use Hire with Columbus, we handle all the contract drafting and ensure everything complies with Romanian labor law. We'll recommend the right contract type based on your specific situation and make sure the trial period, job description, and termination clauses are all legally sound.
The key is matching your contract type to your actual needs. Romanian labor courts pay attention to the reality of the working relationship, not just what's written on paper.
How does payroll and taxation work?
Your €60,000 employee actually costs €82,800 per year in Romania. The employer contributions alone add 38% to your base salary costs, and that's before you factor in vacation bonuses and administrative overhead.
Romania runs on a 13th-month salary system, meaning employees expect an additional month's pay as a holiday bonus in December. Budget for 13 months of salary, not 12, or you'll get an unpleasant surprise when December rolls around.
Tax brackets and income tax
Romanian employees pay progressive income tax on their gross salary. Here's the 2026 breakdown:
| Annual Income Range | Tax Rate |
|---|---|
| €0 - €11,693 | 0% |
| €11,694 - €20,518 | 20% |
| Above €20,518 | 25% |
The personal deduction is €11,693 annually (€974 monthly), so employees earning less than this pay zero income tax. Most professional roles you're hiring for will fall into the 20-25% brackets.
Social security contributions
This is where Romanian payroll gets expensive. Both employer and employee pay hefty social contributions on top of income tax:
| Contribution Type | Employee Rate | Employer Rate | Total |
|---|---|---|---|
| Pension (Pillar I) | 25% | 0% | 25% |
| Health Insurance | 10% | 0% | 10% |
| Social Insurance | 0% | 2.25% | 2.25% |
| Work Insurance | 0% | 0.15-0.85% | 0.15-0.85% |
| Unemployment | 0% | 1% | 1% |
| Medical Leave | 0% | 0.85% | 0.85% |
| Holiday Allowance | 0% | 1.25% | 1.25% |
Total employee contributions: 35% Total employer contributions: 5.5-6.2% (depending on workplace risk category)
Wait, that math doesn't add up to the 38% I mentioned earlier. Here's the catch: Romanian social contributions are calculated on gross salary plus employer contributions, creating a compounding effect that pushes the real employer cost higher.
Real cost breakdown example
Let's break down that €60,000 salary to show actual employer costs:
Base salary: €60,000 Employer social contributions: €3,300-3,720 (5.5-6.2%) Holiday allowance: €750 (1.25%) 13th month bonus: €5,000 (pro-rated monthly) Payroll processing: €1,200-2,400 annually Compliance buffer: €1,500-3,000 (for mistakes, penalties, accounting)
Total annual cost: €71,750-75,870
That's 20-26% above base salary, not counting your internal HR time or the stress of managing Romanian tax deadlines.
Payment schedule and deadlines
Romanian employees expect monthly salary payments by the 15th of each month for the previous month's work. Miss this deadline and you'll face employee complaints and potential labor violations.
The 13th month bonus gets paid in December, typically with the regular December salary. Some companies split it across the year, but employees prefer the lump sum.
Tax filing and compliance deadlines
Payroll taxes must be filed and paid by the 25th of each month following the payment month. Income tax, health contributions, and social security all have the same deadline.
Annual reconciliation happens by March 31st of the following year. This involves submitting detailed employee records, salary histories, and contribution calculations to Romanian tax authorities.
Miss the monthly deadline and penalties start at 0.1% per day of the outstanding amount. Annual filing penalties can reach €15,000 for repeated violations.
Common payroll mistakes
Miscalculating contribution bases: Romanian social contributions apply to different salary components in different ways. Holiday allowances, bonuses, and benefits each have specific calculation rules.
Missing the 13th month: Foreign companies often forget to budget for the December bonus, creating cash flow problems and employee relations issues.
Wrong tax residence assumptions: Romanian tax law has specific rules for foreign employees working remotely or splitting time between countries. Get this wrong and you'll face double taxation issues.
Late filing penalties: Romanian tax authorities don't send friendly reminders. Miss a deadline and penalties start immediately, often exceeding the original tax amount for small oversights.
Running Romanian payroll yourself:
- Local accounting firm: €800-1,500/month
- Payroll software: €200-400/month
- Compliance risk: Fines up to €15,000 for errors
- HR expertise needed: €45,000+ salary for someone who knows Romanian labor law
With Hire with Columbus: $179/month per employee, fully compliant, zero penalty risk. We handle the 13th month calculations, contribution complexities, and all those monthly deadlines that keep you up at night.
Okay, that's a lot of legal jargon.
Here's the thing: you don't actually need to remember any of this. That's literally what we're here for. We'll handle the compliance while you focus on building your team in Romania.
No lawyers required. Promise.
What benefits and leave are required?
Romania employees can take up to 15 days sick leave before needing a doctor's note. Social insurance covers 75% of their salary from day 4 onwards, but you're still on the hook for the first three days at full pay.
Beyond that basic sick leave setup, Romania has a pretty standard European benefits package with some quirks that'll catch you off guard if you're not ready for them.
Annual vacation leave
Every employee gets a minimum of 20 working days of paid vacation per year. That's the legal floor - most companies offer 21-25 days to stay competitive.
Vacation days accrue monthly (roughly 1.67 days per month), and employees can use them as they earn them. No waiting until year-end to take time off.
Here's where it gets expensive: unused vacation days must be paid out when someone leaves. You can't just wave goodbye and call it even. Romania doesn't allow "use it or lose it" policies, so budget for those payouts in your termination costs.
Sick leave breakdown
The sick leave system works in tiers, and understanding who pays what will save you from nasty surprises on your payroll.
Days 1-3: You pay 100% of their salary
Days 4-90: Social insurance pays 75% of their salary
Days 91+: Social insurance pays 100% of their salary
Employees need a medical certificate for any sick leave longer than 5 consecutive days. For shorter periods, their word is enough - though you can request a doctor's note if someone's taking suspicious amounts of short-term sick days.
Parental leave
Maternity leave: 126 days (18 weeks) at 85% of average salary, paid by social insurance. Mothers must take at least 42 days after birth - the rest can be flexible.
Paternity leave: 15 working days within 8 weeks of birth, paid at 100% salary by social insurance.
Parental leave: After maternity leave ends, either parent can take up to 2 years of parental leave. They'll get a monthly allowance of around €600-1,200 depending on their previous salary, but this comes from the state, not your budget.
Public holidays 2026
Romania has 15 public holidays in 2026. If employees work on these days, you pay double their normal rate.
| Date | Holiday | Type |
|---|---|---|
| January 1-2 | New Year | Fixed |
| January 6 | Epiphany | Fixed |
| April 18 | Good Friday | Variable |
| April 20-21 | Easter Sunday & Monday | Variable |
| May 1 | Labour Day | Fixed |
| June 1 | Children's Day | Fixed |
| June 8-9 | Pentecost Sunday & Monday | Variable |
| August 15 | Assumption of Mary | Fixed |
| November 30 | St. Andrew's Day | Fixed |
| December 1 | National Day | Fixed |
| December 25-26 | Christmas | Fixed |
Mandatory benefits and contributions
You'll pay social contributions on top of gross salary. Here's the breakdown that applies to every employee:
| Contribution | Employer Rate | Employee Rate | Total |
|---|---|---|---|
| Social security | 25% | 10% | 35% |
| Health insurance | 0% | 10% | 10% |
| Work accident insurance | 0.15-0.85% | 0% | 0.15-0.85% |
| Unemployment insurance | 0.5% | 0.5% | 1% |
Your total contribution burden runs about 26-27% on top of gross salaries. Employees contribute another 20.5% from their gross pay.
Meal vouchers and other benefits
Most Romanian companies provide meal vouchers (tichete de masă) worth €10-15 per working day. These are tax-deductible for you and tax-free for employees up to €30 per day, making them a popular benefit.
Other competitive benefits include:
- Private health insurance (€50-150 per employee monthly)
- Transportation allowances
- Mobile phone and internet reimbursements
- Flexible working arrangements
- Professional development budgets
13th and 14th month salary
Many Romanian companies pay a 13th month salary as a Christmas bonus, and some add a 14th month for vacation. While not legally required, it's so common that employees often expect it.
If you promise these bonuses in employment contracts, they become legally binding. Better to keep them discretionary until you understand your cash flow patterns.
Common benefit mistakes
Skipping work accident insurance: The rate varies by industry risk level (0.15% for offices, up to 0.85% for manufacturing). Get this wrong and you'll face penalties plus retroactive payments.
Miscalculating meal voucher limits: The €30 daily tax-free limit sounds generous, but exceed it and both you and the employee owe taxes on the excess.
Forgetting vacation payout obligations: Budget 8-10% of annual salary costs for vacation payouts when employees leave. This catches many companies off guard during layoffs or high turnover periods.
Missing contribution deadlines: Social security contributions are due by the 25th of the following month. Late payments trigger penalties of 0.02% per day, which adds up fast on large payrolls.
Administering these benefits correctly requires local HR expertise (€45,000+ annual salary), benefits software (€200-500/month), and legal review (€5,000+ annually). Miss the details and you're looking at penalties starting at €1,000 per violation.
Hire with Columbus handles all benefit administration and compliance for $179/month per employee, including meal vouchers, contribution calculations, and leave tracking. We'll make sure you never miss a deadline or miscalculate a payout.
What are the compliance requirements?
Written contracts are mandatory in Romania. Verbal agreements don't count and expose you to claims, back payments, and potential fines up to €20,000 per violation.
Here's what you need to know to stay compliant when hiring employees in Romania.
Employment contract requirements
Every employment contract in Romania must be written in Romanian and signed within 20 days of the employee's start date. Miss this deadline and you're looking at fines between €5,000-€15,000 per employee.
The contract must include specific mandatory clauses: job description, workplace location, working hours, salary amount, probation period (if applicable), and notice periods. Leave out any required element and the entire contract can be deemed invalid.
You'll also need to register the contract with the territorial labor inspectorate within 20 days. This isn't optional - it's a legal requirement that many international companies overlook until they get hit with penalties.
Probation periods
Probation periods in Romania max out at 90 calendar days for most positions (120 days for management roles). During probation, either party can terminate with just 5 days' written notice.
Here's the catch: once probation ends, full employment protections kick in immediately. That means longer notice periods, severance requirements, and just-cause termination rules apply.
You can't extend probation periods or create multiple probationary periods for the same employee. Romanian courts will void any attempts to circumvent these limits.
Working time regulations
The standard work week is 40 hours over 5 days, with a maximum 8 hours per day. Employees can work overtime up to 8 hours per week (48 hours annually), but it requires written consent.
Overtime pay is 175% of regular hourly rate for the first 8 hours per week, then 200% after that. Weekend work gets a 100% premium, and holiday work earns 200% extra pay plus a compensatory day off.
You must provide at least 15 minutes of break time for every 6 hours worked. Daily rest periods must be at least 12 consecutive hours, with 48 hours of weekly rest (typically weekends).
Notice periods
Notice periods in Romania depend on length of service and who's initiating the termination:
| Years of Service | Employee Notice | Employer Notice |
|---|---|---|
| Under 6 months | 5 days | 5 days |
| 6 months - 2 years | 15 days | 20 days |
| 2 - 5 years | 20 days | 30 days |
| 5 - 10 years | 30 days | 45 days |
| 10 - 15 years | 45 days | 60 days |
| Over 15 years | 60 days | 75 days |
These are minimum requirements - your contract can specify longer periods, but never shorter ones.
Termination process
You can't just fire someone in Romania without proper cause and process. Dismissals require written justification, consultation with employee representatives (if applicable), and adherence to specific procedural steps.
For disciplinary dismissals, you need documented warnings, investigation records, and proof the employee had opportunity to respond. Economic dismissals require 30 days advance notice to labor authorities and employee consultation.
Collective dismissals (10+ employees within 30 days) trigger additional requirements: consultation periods, government notification, and potential approval processes that can take months.
Severance pay
Severance pay in Romania applies to most involuntary terminations:
| Reason for Termination | Severance Amount |
|---|---|
| Economic reasons | 1 month salary per year worked (minimum 1 month) |
| Company restructuring | 1 month salary per year worked |
| Disciplinary (invalid dismissal) | 6-12 months salary |
| Discrimination/harassment | Up to 24 months salary |
| Mutual agreement | Negotiable (typically 1-3 months) |
Severance is calculated using gross monthly salary including regular bonuses and benefits. Payment must be made within 30 days of termination.
Data protection
Romania follows GDPR rules strictly. Employee data collection requires explicit consent, clear purpose statements, and documented retention policies. You can't collect more personal information than necessary for employment purposes.
Background checks need written employee consent and must comply with data minimization principles. Store employee records securely and provide access/correction rights upon request.
GDPR violations carry fines up to €20 million or 4% of annual global revenue, whichever is higher. Romanian data protection authority has been actively issuing penalties since 2026.
Common compliance mistakes
Most international companies trip up on these Romanian employment law requirements:
- Invalid employment contracts: Missing mandatory clauses or Romanian language requirement (€5,000-€15,000 fine plus contract void)
- Wrong termination process: Skipping consultation periods or lacking proper documentation (€10,000-€25,000 fine plus potential reinstatement order)
- Improper overtime calculations: Using wrong rates or exceeding hour limits (€8,000-€20,000 fine plus back payments)
- Missing work council consultation: Required for companies with 20+ employees (€15,000-€30,000 fine plus process delays)
Penalties for violations
Romanian labor authorities don't mess around with employment law violations. Here are the standard penalty ranges for 2026:
- Contract violations: €5,000-€15,000 per employee
- Improper dismissal: €10,000-€25,000 plus reinstatement costs
- Overtime violations: €8,000-€20,000 plus back wages
- Health and safety breaches: €15,000-€50,000 plus shutdown orders
- Discrimination claims: €20,000-€100,000 plus legal fees
Repeat violations carry double penalties, and serious breaches can result in criminal charges against company directors.
Hire with Columbus ensures every contract and termination follows Romania law exactly. Our local legal team handles all compliance requirements, from contract drafting to termination procedures, so you never have to worry about missing deadlines or facing penalties.
What has changed recently?
Romania's job market got a major shake-up in 2026. The government pushed through several big reforms that'll change how you hire and manage employees there.
The biggest change dropped in March 2026 when Romania bumped its minimum wage to RON 3,700 per month (about €740). That's a 12% jump from 2024, and it doesn't just hit entry-level jobs. Most salary bands moved up too, so you'll need to review your pay packages if you're already hiring there.
Romania also rolled out new digital nomad visa rules in January 2026. Remote workers who want to work from Romania temporarily now need to show €3,500 monthly income and can stay up to 12 months. The application takes about 45 days, which beats most EU countries.
Tax changes you need to know about
The social security rates got tweaked in 2026. Employee health insurance contributions dropped from 10% to 9.5%, but employer pension contributions went from 22.75% to 23.25%. Your total costs stay about the same, but payroll calculations need updating.
Romania also cleaned up its income tax brackets. They ditched the middle 16% bracket and now use just two rates: 10% up to RON 200,000 yearly, then 16% above that. Most employees will stay in the 10% bracket unless they're senior executives.
New compliance requirements
Starting June 2026, every employment contract in Romania must include remote work clauses. Even for fully office-based roles. You have to spell out whether remote work's allowed, under what conditions, and who pays for equipment. Labor inspectors are checking for this now.
The upside? Romania streamlined work permits for non-EU citizens. Processing dropped from 90 days to 60 days, and they built an online portal that actually works. You can track applications in real-time instead of calling government offices.
Romania also got stricter about employee monitoring in 2026. You can still track productivity, but you need written consent and must specify exactly what you're watching. Fines start at €10,000 for violations.
When regulations keep shifting like this, an EOR like Hire with Columbus handles all the updates automatically. We track Romanian employment law changes and update contracts, payroll calculations, and compliance procedures so you don't have to monitor every government announcement.