Romania PEO Services

Working hours

The standard working week is five days, over eight hours per day. The maximum working time, including overtime, cannot exceed 48 hours per week. Overtime can be remunerated by free time or extra pay – at 75% of the gross salary.

Leaves / Public Holidays

In addition to the statutory holidays, employees are entitled to additional paid leave for special occasions and a minimum of 20 days annual paid vacation.

Employees are also entitled to the following days off for personal reasons:

• Marriage: 5 days
• Marriage of an employee’s child: 2 days
• Death of a family member: 3 days

Employees are entitled to up to 5 days of sick leave, with a compensation of 75% of their salary. The maximum duration of sick leave is 183 days or up to 18 months for serious illnesses. Compensation is provided by the state for any sick leave which exceeds 5 days.

Romania offers universal free healthcare, but often services need to be paid for up-front and then reimbursed. Additionally, the quality of care in government facilities is not generally up to western standards, so employees may wish to explore private health insurance plans.

Additional private health insurance coverage is usually provided by employers.

Pregnant employees are entitled to at least 126 days of maternity leave at 85% of their average salary during the previous 6 months; leave is paid by the National Social Security fund. Fathers are entitled to 5 days off for paternity leave within the first 8 weeks of the birth. This can be extended to up to 15 days if they participate in childcare courses. Following the maternity leave, parents are entitled to up to two years of additional childcare leave at 85% of their average salary during the 12 months prior to taking the leave (this payment is capped at 6.8 times the reference social indicator).

Parents caring for a disabled child up to 18 years of age, or a chronically ill child up to 7 years of age, are entitled to 45 days of paid leave for each disabled or ill child at 85% of the employee’s average salary during the previous 6 months (this payment is capped at 12 times the monthly minimum wage).

Romania’s public holidays are:

• New Year
• The Union of the Romanian Kingdoms
• Good Friday
• Easter Sunday
• Easter Monday
• Labour Day
• The first and second day of Pentecost
• Children’s Day
• St Mary’s Day
• St Andrew’s Day
• National Day
• Christmas Day
• Boxing Day
• Two days for each of the main annual religious holidays declared by legal religious faiths (besides Christian ones) for individuals belonging to those faiths.

Visas

Foreign individuals receiving personal income sourced in Romania need to submit a fiscal application form to the Romanian tax authorities to obtain a fiscal registration number. The number of the residency permit will be used as a fiscal identification number upon registering with the Romanian tax authorities.

Generally, foreign individuals, unless a citizen of another EU member state, must apply for a Romanian work permit before obtaining a residency permit. To obtain a work permit, a working visa should be obtained from the Romanian diplomatic mission, unless the foreign individual is a citizen of an EU member state.

Foreign individuals who stay in Romania for more than 90 days within a six-month period must apply for a temporary residency permit unless a relevant international agreement or special law stipulates otherwise. EU citizens must obtain registration certificates, instead of residency permits.

Prior to applying for a temporary residency permit, a visa from the Romanian Embassy or consulate from the country of residence must be obtained, except for citizens of the EU, the United States, Canada, Japan, Liechtenstein, Norway, and Iceland.

Taxation

• The standard corporate income tax rate is 16%
• Micro-companies, which have less than a €1 million turnover have a special fiscal regime, with a tax rate of 3% of the total revenues earned. If the company has at least one full-time employee, the tax rate is 1%
• For nightclubs and gambling operations, the corporate income tax rate cannot be lower than 5% of the revenues obtained from such activities
• The standard income tax rate is 10%. Income from gambling is taxed between 1-25% depending on the quantity of winnings.
• VAT: the standard rate is 19%, but 9% for foods and medicine and the supply of prostheses and orthopaedic products; and 5% for HORECA

Taxation of Labour in Romania

Employees contributions:

• Social security contribution – 25%
• Health fund – 10%.
• Income tax -10%

Employers’ contributions:

• Labour insurance contribution – 2.25%

As of 2019, there is a special taxation regime applicable to businesses in the construction sector. The minimum gross salary in construction is RON 3000 and the contributions, as a percentage of gross salary, are:

• Social security contribution – 21.25%
• Health fund – 0%.
• Income tax -0%

Employers’ contributions are:

• Labour insurance contribution – 0.337%

Cultural Information

Most of Romania's population are ethnic Romanian and religiously identify themselves as Eastern Orthodox Christians, speaking Romanian, a Romance language. The Romanian Orthodox Church is the largest, most traditional church of the nation. Romania’s largest ethnic minorities include Hungarians (6.1% of the population) and the Roma (3.0% of the population). Other minorities include Ukrainians, Germans, Turks, Lipovans, Aromanians, Tatars, and Serbs.

Romanian is spoken as a first language by approximately 90% of the entire population, while Hungarian and Vlax Romani are spoken by 6.2% and 1.2% of the population respectively. According to the 2012 Eurobarometer, English is spoken by 31% of Romanians, French is spoken by 17%, and Italian and German, each by 7%.

Impacts from COVID-19

Like other nations across the world, Romania was profoundly impacted by the COVID-19 pandemic. The Romanian government acted swiftly in response to the crisis, providing a fiscal stimulus of 4.4 percent of GDP in 2020 to help keep the economy moving. Economic activity was also supported by a resilient private sector.

Romania was among many markets which were less adapted to digitalisation, having the lowest share of employed people working ‘digitalised’ and with less flexible working time or share of remote employees. Because of the COVID 19 crisis, work from home and telework extended during 2020, allowing the continuation of business activity.

The communication system in the business environment was modernised, the document circuit was digitised, and receipts and payments were banked. All of these changes increased the transparency of doing business. Courier activities, ATM sales system, take-away and delivery planning depending on the customer were also expanded.