Payroll and Benefits Guide Romania

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee Income Tax

General

As of 01 January 2023, the value of the minimum gross base wage is increased to RON 3,000/month, for a normal working schedule with an average of 165.333 hours/month, representing RON 18.145/ hour.

The minimum gross wage per country does not include increments or other additions. As of 1 January 2023, employees can only be paid the minimum gross base salary for a maximum of 24 months. When this period expires, employers will be required to pay the respective employees a higher salary.

Payroll Cycle

In Romania, the payroll frequency is monthly. Work between the first and last day of the month is typically paid on the last working day of the month.

13th Salary

There is no statutory requirement for a 13th salary payment in Romania

General

According to Romania law, the work week is limited to no more than five eight-hour days and a maximum of 48 hours per week. Part-time workers must work a minimum of ten hours per week, two hours per day. For employees under 18, work is limited to six hours a day or 30 hours a week.

Employers must keep a record of the daily work hours performed by each employee, highlighting the start and end hours of the working program, and shall present such records to the labor inspection control when required.

Overtime

Employees are allowed to work a maximum of 48 hours per week including overtime. After working a 12-hour day, employers must give a 24-hour rest period. Work performed outside the standard eight hours per day, 40 hours per week must be compensated with paid hours off during the 60 calendar days after the overtime has been performed.

If the compensation with paid time off is not possible, the overtime shall be paid to the employee by adding a benefit that must not be lower than 75% of the basic wage, pro-rated to the overtime performed.

Workers under 18 years of age, part-time employees, and pregnant employees who are unable to work normal working hours for health reasons are not permitted to work overtime.

Working Week

Monday–Friday

Paid Time Off

Employees are entitled to up to 20 days of paid annual leave by law per year pro-rated with the worked period. Employers are required to pay employees their allowance at least five working days before the leave starts.

If the employee cannot take all or part of the annual leave entitlement within the calendar year, the employer must carry over the outstanding annual leave to the first six months of the following calendar year, however, if the employee is still unable to take the leave entitled (e.g. due to long-term sickness), the employer must grant the unused leave with the employee’s consent within 18 months, starting with the year following the one when vacation has been accrued.

Public Holidays

Public holidays that fall on the weekend are usually lost.

Sick Days

Under the labor code, employees covered by the pension and social insurance system who have made required contributions are entitled to sick leave of up to 180 days within one year with a possible 90-day extension.

The first five calendar days are provided by the employer for working days only. From the 6th calendar day, the FUNASS (Unique National Fund of Health Insurances) fund supports the payment of sick leave.

Sick pay is equivalent to 75% to 100% of the average monthly income during the previous six months, depending on the category of illness. The employee is required to provide a medical certificate from the doctor.

Maternity Leave

A pregnant employee is entitled to 126 days of paid maternity leave.

Maternity leave consists of two periods, prenatal leave, which is the period where a woman must take a minimum of 63 days before the expected due date, and postnatal leave, where the employee must take the remaining 63 days after the birth of the child.

The actual days across the two periods are stipulated by the employee’s physician and reported in the official medical certificate of maternity.
The maternity payment is paid by the FUNASS (Unique National Fund of Health Insurances) at a rate of 85% of the calculation based on the average of the employee’s monthly gross wages during the six months before the maternity leave started.

In addition, employees are entitled to take leave to protect their own and their child’s health and safety. The maternal risk-benefit is completely supported with funds from the Unique National Fund of Health Insurances. The amount of benefit is 75% of the average gross earnings over the last six months. Maternal risk leave is complementary to maternity leave.

In these cases, the employee is required to write a request to the employer and provide a medical certificate from the doctor for the child’s sickness.

Paternity Leave

The father/partner, who effectively participates in a child’s care is entitled to 10 days of paid leave, irrespective if the child is born of marriage, out of wedlock, or adopted; this leave increases to 15 days if the employee participates in an infant care course. The possibility to benefit from paternity leave is during the first eight weeks after the birth of the child, based on the written request addressed to the employer.

The employee is legally required to provide the birth certificate of the child.

The paternity leave allowance is paid from the employer’s salary fund and is included in the taxable income of the employee.

In the case of the death of the child’s mother during childbirth or during maternity leave, the child’s father is entitled to the following benefits, as the case may be:

a) an allowance equal to the maternity allowance due to the deceased mother if the father does not complete the insurance period to benefit from the right to medical leave.

b) a maternity-related allowance granted in accordance with the father’s income, for the case when he fulfills the insurance period to benefit from the right to medical leave.

This allowance is borne from the salary fund of the employer where the father works.

Parental Leave

After maternity leave, one of the parents is eligible for childcare leave (parental leave) until the child reaches two years of age (three years of age in the case of disabled children), provided that the employee has contributed to tax during the past year of employment.

The employee is entitled to receive a monthly allowance from the appropriate Romanian authorities amounting to 85% of the average regular salary received in the last 12 months before childbirth. The employee is legally required to provide the written request from the employee, the birth certificate of the child, and a declaration that the other parent is not on maternity leave.

Other Leave

Depending on the collective agreement/employment contract terms, an employee may be allowed additional leave types, which must be approved between the employer and employee.

Employees are entitled to up to three days of paid bereavement leave in the case of the death of a direct family member. In these cases, the employee is required to provide the death certificate and a request from the employer.

Employees are entitled to five days of paid wedding leave and two days of paid leave in case of the wedding of an employee’s child. In this case, the employee is required to request the employer to go on leave and after the wedding, provide the wedding certificate.

Termination Process

The termination process varies according to how the employment agreement and collective agreement are in place and is based on the type of contract and reason for termination.
Individual employment contracts can be terminated by means of

1. By law
2. By mutual consent of the parties
3. By either party of the employment contract within the terms and conditions provided by the law

Employers may terminate employment contracts by dismissal for reasons related to the employee (e.g., professional inadequacy as a disciplinary sanction) or not associated with the employee (e.g., job cancellation).

Notice Period

Notice period in the case of an employee dismissal is a minimum of 20 working days for all jobs regardless of the employment contract.
Employees may also terminate their employment agreement by resignation with prior notice of a maximum of 20 business days for non-management positions and 45 business days for management positions.

Severance Pay

There is no statutory severance pay in Romania unless conditions have been set in a collective agreement.

Probation Period

The probationary period in Romania is dependent on the type of role and is stipulated within the employment agreement. In general, probation periods are 90 calendar days increasing to 120 calendar days for an employee in a managerial/supervisory position.

General

• Meal vouchers
• Gifts, including gift vouchers and holiday gifts, cultural vouchers, and holiday vouchers
• Transportation allowance
• Private pension & private health
• Developmental courses and training gym subscription
• Life insurance

VISA

EU citizens wishing to work in Romania should apply for a registration certificate from the Romanian Office for Immigration for a stay of more than 90 days. Non-EU citizens need to obtain a residency permit if the stay is longer than 90 days

Foreign workers must obtain work authorization from the Romanian Office for Immigration via an application from the employer. Employers must prove that they are a legitimate business in Romania and that they have made every effort to recruit a Romanian national to fill the role.
They must also ensure that the proposed employee is suitably qualified, having had suitable education and training, for the role.

There are several types of work permits that may be applied for and subsequently completed and submitted to the General Inspectorate of Immigration by the employer:

• Work permit for permanent workers: For foreign employees who have an indefinite or fixed-term employment contract.
• Cross-border worker: A foreign employee who is from a country that borders Romania and has an indefinite or fixed-term employment contract.
• Highly qualified worker: A foreign employee that has obtained a highly skilled job in Romania. The term of employment must be for at least one year.

Most work permits are valid for one year, however, permits for highly skilled workers are valid for two years.

General

VAT is 19% standard rate.