Running Payroll in Romania
Get payroll up and running in Romania. We'll help you set up payroll for your team in record time and take the entire compliance burden off your shoulders.
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Payroll cycle
Monthly
Payslip
Paper or digital
Tax filing
Monthly
Tax year
Calendar year
Employer taxes
2.25%
Currency
Romanian Leu (RON)
Pay Your Team in Romania
Romania offers a cost-effective hiring environment for international employers, thanks to comparatively low gross wages and a moderate employer contribution to social security. These financial advantages make it an increasingly attractive destination for companies seeking to expand their European workforce.
However, before hiring employees in Romania, foreign employers must understand the country’s payroll framework. This includes mandatory registrations with local authorities, compliance with Romanian labor laws, and adherence to specific payroll reporting requirements.
Setting up Payroll in Romania
Before they can start processing payroll, employers need to register with the Territorial Labor Inspectorate ( Inspectoratul Teritorial de Muncă, ITM) to add their new hires to the Revisal– the electronic General Registry of Employees, which stores key employment information, including each employee’s individual employment contract. This registration must be done electronically. Employers can either appoint an authorized individual or engage a registered payroll or employment service provider to submit the required data. The deadline for submission is no later than one day before the employee’s official start date.
Furthermore, employers are required to register for payroll tax purposes with the competent local tax office under the National Agency for Fiscal Administration (NAFA) in order to obtain a Romanian Tax Code (RTC). For companies that establish a legal entity in Romania, tax registration is done automatically during registration with the National Trade Register Office (NTRO). However, setting up a Romanian legal entity is not mandatory for hiring local employees, as long as other compliance requirements are met.
Since employee details are submitted via Revisal, no separate registration is needed with social security or tax authorities for each individual hire. Additionally, Romanian law does not require employers to open a local bank account. Payments to employees and authorities (such as social contributions and income tax) can be made from foreign accounts, provided the foreign bank can process transactions in Romanian Leu (RON) and issue payments to Romanian accounts.
Income Tax and Social Security in Romania
Calculating income tax and social security contributions in Romania is a relatively straightforward process. A single, flat tax rate applies to all employment income, and the levels for social security contributions are well-defined with minimal variation. While the employee primarily bears the burden of social security contributions, employers also have specific responsibilities for withholding and remitting these payments.
Tax Considerations
Income from employment is taxed at a flat rate of 10%. Taxable income includes salary, as well as bonuses, benefits in kind, and any other employment-related income. Non-resident employees who are assigned to work in Romania by a foreign employer are also subject to this flat income tax on Romanian-sourced employment income.
Certain types of income are exempt from income tax under specific legal provisions, including maternity, paternity, parental and other family-related leaves, and income from R&D activities.
In addition, employees may benefit from personal deductions which include:
- Deductions for dependent children and other qualifying family members,
- Social security contributions paid by the employee, fully deductible from gross income,
- Voluntary contributions to pillar III pension funds and private health insurance, deductible up to a combined cap of EUR 400 per year.
Romanian tax residency is determined based on several criteria. Tax residents are taxed on their worldwide income, whereas non-residents are taxed only on income from Romanian sources. An individual is generally considered a Romanian tax resident if they meet any of the following conditions:
- They have their domicile in Romania;
- Their center of vital interests is in Romania;
- They are physically present in Romania for more than 183 days in any rolling 12-month period.
Tax Withholding and Reporting
Employers are responsible for withholding income tax and mandatory social contributions from their employees’ wages and salaries, and for submitting both the payments and the corresponding reports to the Romanian tax authorities on a monthly basis.
The consolidated monthly tax return (Form D112) must be filed electronically via the ANAF system no later than the 25th of the month following the salary payment month. Payments for income tax and social contributions are due on the same date.
Certain small employers may qualify to declare and pay payroll obligations quarterly instead of monthly, provided they meet specific legal thresholds, as established in the Romanian Fiscal Code.
While there is no obligation for employers to file an annual income tax return on behalf of their employees, they must issue an annual salary certificate (Form 205) if requested by the employee.
Social Security Contributions
Employers are generally required to pay a 2.25% contribution towards employment insurance based on the employee’s gross salary. However, for employees with special working conditions, an additional pension contribution ranging from 4% to 8% may apply.
Employees are obligated to contribute 10% to health insurance and 25% to the pension fund. Contributions are calculated based on the employee's gross monthly salary.
Employers are responsible for calculating and withholding social security contributions monthly and paying both shares to the competent authorities. The due date for social security payments is the 25th of the month following the payroll period to which the contributions apply. In some cases, depending on the company’s size and industry, payments may be made quarterly instead of monthly.
| Contribution Type | Employer Rate | Employee Rate |
|---|---|---|
| Pension Insurance | 25% | |
| Health Insurance | 10% | |
| Employment Insurance | 2.25% | |
| Social Insurance | 4% - 8% | |
| Total | generally 2.25% | 35% |
Employment Obligations
Employees in Romania are entitled to various benefits. These include:
- Annual leave and public holidays: 20 days of paid annual leave, plus 15 national public holidays.
- Maternity leave: 126 days (63 days before and after birth), paid by social security at 85% of normal wages.
- Paternity leave: 5 to 10 days at the birth of the child.
- Parental leave: Paid by social security at 85% of usual wages, lasting until the child’s second birthday.
- Sick leave: 5 days paid by the employer, with further sick leave paid by social security, varying between 75% and 100%, depending on the illness type.
Compensation
As of 1 January 2025, the national minimum wage in Romania is RON 4,0500 per month, which equals RON 24.50 per hour. Overtime work is compensated at 175% of the employee’s regular wage, and 200% for work on public holidays.