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13 December 2022
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Payroll compliance in Romania

Romania’s reduced tax rates and a highly skilled, affordable workforce make the country an attractive destination for foreign investment. However, the country’s frequent legislative changes and fiscal complexity can make maintaining payroll compliance a challenge.

Romania’s labour laws are enshrined in the country’s Labour Code. This governs all aspects of employment in Romania, including individual and collective employment relationships, salary levels, labour protection and health, leave entitlement, working hours, rest, termination of employment and discrimination. Romania’s Labour Code applies equally to local and foreign employees working in the country.

  • Romania has a mandatory public social security system. In 2018, the Romanian government transferred the liability for social contributions entirely on to employees. This means that, in most cases, employees now pay 25% of salary in social security contributions (pension) and 10% in health insurance contributions.
  • Romanian employees are granted 13 public holidays per year, a minimum of 20 days’ annual paid leave and additional paid leave for special occasions, such as family events.
  • Foreigners, other than those from the European Union (EU), European Economic Area (EEA) and the Swiss Confederation, must have work permits and a residence visa to work and live in Romania.

If you’re doing business in Romania and are looking to learn more about Romania’s labour laws, incorporation procedures, tax implications and compliance requirements, request a copy of our full country profile, Doing business in Romania.

Payroll compliance guide

The global payroll compliance landscape can be a difficult one to navigate and interpret. Overseas businesses can be subject to greater scrutiny on the part of local governments, regulators and tax authorities.

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