Romania is one of the most cost-effective labor markets in Europe. Labor taxes, starting at 37.3% of the total salary, make up a significant portion of overall employment costs. If you’re considering starting a business in Romania, the Romanian Labor Code and hiring costs may be important factors to consider.
This article provides basic information on hiring employees in Romania. The Labour Code itself contains as many as 281 legal articles. However, the obligations related to payroll processing and social security contributions are not as complex as they may seem.
Types of employment contract in Romania
In terms of the types of arrangements with employees, only employment contracts are available in Romania. Civil law contracts, which are often used in other countries like Poland, do not exist in Romania. A reference to this is contained in Article 10 of the Romanian Labour Code1:
Contractul individual de muncă este contractul în temeiul căruia o persoană fizică, denumită salariat, se obligă să presteze munca pentru și sub autoritatea unui angajator, persoană fizică sau juridică, în schimbul unei remunerații denumite salariu.
On one hand, this provision offers significant convenience for employers due to limited regulation. However, they are still required to comply with several fundamental requirements when concluding employment contracts with employees.
In Romania, employment contracts can be either fixed-term or indefinite. Probationary contracts are commonly used for new hires, with probation periods lasting up to 180 days for managers and specialists, or between 5 and 30 days for other employees, including unskilled workers. Employers can also opt for temporary employment contracts, primarily for seasonal workers, as well as replacement contracts.
Conditions of employment
Employees must undergo a medical examination before starting work, with the scope depending on the specifics of the position. In Romania, minors as young as 16—and even 15 with parental consent—can work, including trainees who are still in school. Foreigners can also work in Romania, provided they register with the local labor inspectorate.
Rules on termination of employment contracts
In principle, an employment contract can be terminated by either party.
- by employer – within the framework of layoffs (redundancy of less than 9 people) or group reorganizations (redundancy of more than 9 people),
- by employee – if an employee grossly violates the work rules, is arrested for more than 30 days or his/her health condition results in permanent incapacity to work.
The Romanian Labour Code provides for situations in which a notice of termination cannot be handed to an employee. These include the following events:
- the worker is on sick leave and receiving benefits,
- the worker is pregnant, on maternity leave, breastfeeding or caring for a sick child under one year of age,
- an employee whose husband is doing military service.
Working hours & holidays
In Romania, the standard working time is 8 hours per day and a maximum of 48 hours per week (for comparison, in Poland, the weekly working time is 40 hours). Every employer is required to keep a record of employees’ working hours.
Work is generally from Monday to Friday. Overtime can either be compensated with time off within 60 days or paid at a minimum of 75% above the basic rate. Certain groups, such as minors and pregnant women, are not allowed to work overtime.
Employees who are dismissed through no fault of their own are entitled to severance pay based on their earnings.
The minimum length of annual leave in Romania is 20 days per year (Art. 145 u. 1 of the Romanian Labour Code.1):
Durata minimă a concediului de odihnă anual este de 20 de zile lucrătoare.
The annual leave is fully paid by an employer what adds up to the overall employment cost in Romania.
Selected employee benefits
In addition to salary and sickness/pension/pension insurance, employees in Romania can also count on additional benefits provided by the employer. These include, for example:
- free passes to the gym,
- access to private medical care,
- funding for courses and training,
- business telephone,
- preferential opportunities to purchase company securities (mainly for high-level managers),
- social benefits, including, inter alia, child benefit and care allowance.
Employer’s costs
Salaries in Romania in 2025 are as follows:
- The monthly minimum wage in Romania is RON 4050 gross (this is about 810 euro) for a full-time job (168 working hours). The rate for 1 hour of work is RON 24.11,
- Skilled workers – including, among others, university graduates – can count on a higher salary of 120% of the minimum wage,
- workers in the construction industry can count on a higher minimum salary of RON 4582 gross2,
According to The Ministry of Labour (CNSP), the average salary in 2025 in Romania will reach RON 8620 gross3, RON 5355 net (~1071 euro).
Both the employer and the employee bear the additional costs associated with employment (income tax, social security).
| Type of contribution | Employer’s costs | Employee costs |
Insurance paid by the employer
|
2,25% | – |
| 1. gross remuneration | ||
| Social security | – | 25% |
| Health insurance | – | 10% |
| Income after deduction of social contributions | ||
| Income tax | – | 10% |
| 3. net remuneration | ||
Labour taxation in Romania is typically 37.25%.
In connection with the employment of an employee, the costs borne by the employer in Romania (in addition to the net salary) are relatively small, although they also include social security contributions.
In Romania, as in Poland, the payer of social security contributions and income tax is the employer. Payment must be made within 25 days after the end of the working month in question. The same deadline applies to the payment of income tax for employees. It is worth remembering that employees of IT and R&D departments, for instance, are exempt from income tax, thus decreasing the real employment cost.
Employment cost in Romania – example
An example of the employer’s costs associated with hiring an employee in Romania is shown in the table below. The data refer to the gross minimum salary for 2025 with a common tax deduction.
| Position | Value in RON |
| Gross remuneration | 4050 RON |
| Social security | 938 RON |
| Health insurance | 375 RON |
| Income tax | 163 RON |
| Net remuneration | 2575 RON |
| Insurance paid by the employer | 91 RON |
| Total cost to the employer | 4050 RON + 91 RON = 4141 RON |
You can estimate the cost of employment with our free Romanian remuneration calculator.
The employment cost in Romania is not negligible, but on the plus side, employees can see almost the entire cost incurred by their employer reflected on their pay slip. The European Union has not approved deducting and paying the labor fund contribution from the employee’s gross salary in Romania.
Cost of employment of non-EU workers
For EU workers, there are no additional employment costs. Though for non-EU workers, the procedure is more complicated and costly.
The cost of employing a seconded worker
The calculation of salaries for seconded employees is much more complex than for regular workers. However, based on our statistics, employment costs usually drops below 18%. Contact us for a personalized cost projection for employing seconded workers.
