Country Overview
Romania is a dynamic Southeastern European country that combines a fast-growing economy with a rich cultural heritage and a low cost of living. An EU member since 2007 and a full Schengen member since January 2025, Romania has emerged as a leading destination for technology, shared services, manufacturing, and engineering investment. The capital Bucharest is the country’s main economic hub, alongside thriving regional centres such as Cluj-Napoca, Timișoara, Iași, and Brașov.
Romania offers a highly skilled, multilingual workforce with deep expertise across Information Technology, Engineering, Financial Services, and Business Process Outsourcing. With strong English proficiency and one of the largest tech talent pools in Central and Eastern Europe, international teams integrate quickly. EU/EEA/Swiss citizens enjoy freedom of movement, while non-EU nationals require a long-stay work visa and residence permit.
*This guide is intended for general informational purposes only and should not be viewed as legal or tax advice. The information discussed may change frequently, and Access Financial cannot guarantee that all content remains current at all times.
2026 Key Legislative Updates
Standard VAT rate raised to 21% (from 19%) as of August 2025, with a single 11% reduced rate. Dividend tax increases to 16% from January 2026. Gross minimum wage rises to RON 4,325 from 1 July 2026. Sick pay first day unpaid (Feb 2026 – Dec 2027); employer covers days 2–6, state from day 7.
Contracts
Romanian employment contracts must be in writing and registered in the General Register of Employees (REVISAL) before the employee starts work. The contract defines the terms of engagement — type, duration, notice, pay, and benefits.
Contract Types
| Contract Type | Duration | Key Features |
|---|---|---|
| Indefinite-term (Permanent) | Indefinite | Standard full-time contract; continues until terminated with notice |
| Fixed-term | Max. 36 months | Written justification required; up to 3 consecutive renewals |
| Part-time | Indefinite or fixed | Pro-rata rights; no less favourable treatment than full-time |
| Self-employed (PFA) | Ongoing | Authorised natural person; flat 10% tax on profits plus contributions |
Fixed-Term Contract — 36-Month Rule
Fixed-term contracts in Romania are capped at 36 months in total, with no more than 3 consecutive renewals. Beyond this limit the relationship converts to an indefinite-term contract. Each fixed-term contract must include written justification (e.g. project-based, seasonal, covering maternity leave).
What Your Contract Must Include
Mandatory Provisions
- Job title, description, and COR occupational code
- Start date and contract duration (if fixed-term)
- Gross salary and pay frequency
- Working hours and location
- Annual leave entitlement
- Notice period (both sides)
- Probation period (if applicable)
- Collective bargaining agreement reference
Common Additional Clauses
- Confidentiality / NDA provisions
- Intellectual property assignment
- Non-compete clauses (max 2 years post-employment, paid)
- Telework or hybrid arrangements
- Bonus and commission structure
- Meal vouchers and additional benefits
- Disciplinary and grievance procedure reference
Working Hours & Overtime
Romania’s Labour Code sets the standard working week and overtime rules. Overtime carries a mandatory premium.
| Parameter | Rule | Notes |
|---|---|---|
| Standard working day | 8 hours | Usually Mon–Fri, 9am–6pm |
| Standard working week | 40 hours | 5-day week is the norm |
| Maximum weekly hours | 48 hrs/week avg | Over a 4-month reference period (including overtime) |
| Maximum overtime | 4 hrs/day, 48 hrs/month | Cannot exceed these caps |
| Overtime premium | +75% | Paid at 175% of normal hourly rate (or paid time off in lieu) |
| Daily rest | 12 consecutive hrs | Per 24-hour period |
| Weekly rest | 48 consecutive hrs | Usually Saturday and Sunday |
Time Off in Lieu Option
Where the parties agree, overtime can be compensated with paid time off within 90 calendar days instead of the 175% premium. The choice must be documented.
Probation Period
Probation is contractual in Romania and must be stated in writing. Statutory maximums depend on the role and contract type.
| Parameter | Standard practice | Legal notes |
|---|---|---|
| Maximum — non-management | 90 calendar days | Set in the individual employment contract |
| Maximum — management | 120 calendar days | For executive and management roles |
| Notice during probation | No notice required | Either party can terminate with simple written notification |
| Extension | Not permitted | A single probation per role; cannot be extended once set |
| Day-one statutory rights | Full from day one | Minimum wage, social contributions, leave accrual, anti-discrimination |
Immigration & Work Visas
Romania operates a quota-based work authorisation system for non-EU nationals. EU/EEA/Swiss citizens enjoy freedom of movement and only need to register a stay exceeding 90 days.
Full Schengen Membership — January 2025
Romania joined the Schengen area in full as of January 2025. Land, sea, and air border controls with other Schengen states have been removed. Short-stay visa rules (90 days in any 180-day period) now apply uniformly across the area.
Work Authorisation Routes
The Romanian employer applies to the General Inspectorate for Immigration (IGI) for a work authorisation. Once granted, the employee applies for a long-stay (D) visa at a Romanian consulate within 60 days, then files for a temporary residence permit after arrival.
| Visa Route | Purpose | Sponsor? | Duration |
|---|---|---|---|
| D/AM — Local Employment | Employees with Romanian job contract | Yes | 1 year, renewable |
| D/AP — Professional Activities | Self-employed / freelancers | No (PFA registration) | 1 year, renewable |
| D/DT — Secondment / ICT | Intra-company transfers | Romanian entity | Up to contract length |
| EU Blue Card | Highly-qualified workers | Yes | 2 years, or contract + 3 months |
| Fee | Cost | Notes |
|---|---|---|
| Work authorisation (per worker) | ~EUR 200 | Paid by employer to IGI |
| Long-stay (D) visa | ~EUR 120 | Paid at the Romanian consulate |
| Temporary residence permit | ~EUR 120 | Issued by IGI after arrival |
| Medical fitness certificate | RON 100–300 | Required for residence permit application |
Leave Entitlements
Romanian statutory leave entitlements are aligned with EU directives. Many professional employers offer enhanced benefits above the statutory floor.
Annual Leave
| Parameter | Entitlement | Notes |
|---|---|---|
| Statutory minimum | 20 working days/yr | Plus public holidays; pro-rata in first year |
| Market standard (professional) | 21–25 days | Plus public holidays |
| Holiday pay rate | Average gross salary | Calculated from the last 3 months of earnings |
| Carry-over | Up to 12 days | Must be used within 18 months; employer consent needed |
Parental Leave
| Leave type | Duration | Pay | From |
|---|---|---|---|
| Maternity | 126 days | ~85% of salary (CNAS) | 63 days before + 63 days after birth |
| Paternity | 10 working days | 100% of salary (employer) | Within 8 weeks of birth; +5 days if childcare course completed |
| Parental (childcare) | Up to 2 years | 85% of avg. income (state, capped) | 3 years if child has disability |
| Adoption leave | Up to 1 year | Statutory rate | For adoptive parents |
Sick Leave
| Parameter | Rule |
|---|---|
| Pay — up to 7 days | 55% of average gross income |
| Pay — 8 to 14 days | 65% of average gross income |
| Pay — 15+ days | 75% of average gross income |
| Maximum duration | 183 calendar days per year (ordinary illness) |
| Eligibility | Minimum 6 months of contributions |
| Day-one rule (Feb 2026 – Dec 2027) | First day unpaid; employer pays days 2–6; state pays from day 7 |
Public Holidays 2026
Romania has around 17 non-working days in 2026 spread across 11 official national holidays. If a holiday falls at a weekend it is not usually moved to a weekday.
| Date | Day | Holiday |
|---|---|---|
| 1–2 January | Thursday–Friday | New Year’s Day |
| 6–7 January | Tuesday–Wednesday | Epiphany & St John the Baptist |
| 24 January | Saturday | Unification Day |
| 12–13 April | Sunday–Monday | Orthodox Easter |
| 1 May | Friday | Labour Day |
| 1 June | Monday | Children’s Day |
| 31 May – 1 June | Sunday–Monday | Orthodox Pentecost / Whitsun |
| 15 August | Saturday | Dormition of the Theotokos |
| 30 November | Monday | St Andrew’s Day |
| 1 December | Tuesday | National Day |
| 25–26 December | Friday–Saturday | Christmas |
Notice Periods
Romania’s Labour Code sets statutory minimum notice periods that depend on the role and the party giving notice.
| Situation | Statutory minimum | Notes |
|---|---|---|
| Employer dismissal — non-management | 20 working days | Minimum; longer can be agreed in contract |
| Employee resignation — non-management | Up to 20 working days | Contract may set a lower notice |
| Employee resignation — management | Up to 45 working days | For executive and management positions |
| Probation period | No notice required | Either party — written notification only |
| Gross misconduct | Immediate | After disciplinary procedure |
Termination & Severance
Romanian employment law provides significant employee protections. Dismissals must be for a valid reason (restructuring, misconduct, performance) and follow a documented legal procedure.
| Termination reason | Notice | Severance |
|---|---|---|
| Resignation | Up to 20 working days (45 for management) | None statutory |
| Mutual agreement | As agreed | As agreed |
| Redundancy (individual) | 20 working days minimum | No statutory amount; collective agreement may apply |
| Collective redundancy | 20 working days + consultation | Typically 2–3 months’ salary by collective agreement |
| Gross misconduct | Immediate | None |
| Probation | None required | None |
Unfair Dismissal — Strict Procedural Rules
Failure to follow correct disciplinary or redundancy procedure can lead to reinstatement and back-pay. Written warnings, an investigation, and the employee’s opportunity to respond are mandatory before disciplinary dismissal.
Income Tax
Romania applies a flat personal income tax rate. The tax year is the calendar year (1 January – 31 December). Employees are taxed at source via payroll; self-employed individuals file an annual return (declarație unică).
Income Tax Rates 2026
| Income Type | Rate 2026 | Notes |
|---|---|---|
| Salary and service income | 10% | Flat rate on taxable income (after social contributions) |
| Self-employed (PFA) profits | 10% | On net profit after deductible expenses |
| Dividends | 16% | Up from 10% — applies to dividends distributed from 1 January 2026 |
| Rental income | 10% | On gross income after 20% standard deduction |
| Crypto gains | 16% | From 1 January 2026 |
Tax Residency & Double-Taxation
Individuals who spend over 183 days in Romania in any 12 months, or have their centre of vital interests here, become Romanian tax residents and are taxed on worldwide income. Romania has double-taxation treaties with 80+ countries, including the UK, USA, and Germany.
VAT
| Rate | % | Applies to |
|---|---|---|
| Standard | 21% | Most goods and services (raised from 19% on 1 August 2025) |
| Reduced | 11% | Single reduced rate (replaced prior 5% and 9% rates) |
| Registration threshold | RON 395,000 | ~EUR 80,000 turnover/year above which VAT registration is mandatory |
Benefits
Romania’s statutory benefits cover healthcare, pension, and family support. Competitive employers layer supplemental benefits — meal vouchers and private healthcare are standard in professional roles.
Mandatory Statutory Benefits
| Benefit | Rate / Amount | Notes |
|---|---|---|
| Public Pension (CAS) | 25% employee | State pension via Pillar I + private Pillar II |
| Public Healthcare (CASS) | 10% employee | Access to CNAS public health system |
| Sick Pay | 55%–75% of salary | Up to 183 days/year after 6 months of contributions |
| Maternity Pay | ~85% of salary | 126 days; paid by CNAS |
| Annual Leave | 20 working days/yr | Plus public holidays; pro-rata for part-time |
| Public Healthcare Access | Free at point of use | Via national health insurance card (CEAS) |
Market-Standard Supplemental Benefits
| Benefit | Prevalence | Typical provision |
|---|---|---|
| Meal Vouchers | Very common | Up to RON 45/working day in 2026; tax-efficient |
| Private Medical Insurance | Standard in IT & professional roles | Regina Maria / MedLife / Medicover |
| Voluntary Private Pension (Pillar III) | Common at larger employers | Tax-deductible up to EUR 400/year |
| Gym & Wellness | Common | 7card, World Class subscriptions |
| Transportation Allowance | Common | Or fuel card / company car for senior roles |
| Remote / Flexible Working | Standard post-2021 | Hybrid 2–3 days; formal telework agreement required |
| 13th-Month Salary | Common in IT, banking, multinationals | Not statutory; usually paid in December |
Pension System
Romania operates a three-pillar pension system: a mandatory state pay-as-you-go scheme, a mandatory privately-managed fund, and a voluntary private pension.
| Parameter | 2026 | Notes |
|---|---|---|
| Pillar I — State Pension (CAS) | 25% employee | Public pay-as-you-go scheme |
| Pillar II — Mandatory Private Fund | 4.75% (out of CAS) | Privately managed; mandatory for those under 35 at start |
| Pillar III — Voluntary Private Pension | Up to 15% of gross salary | Tax-deductible up to EUR 400/year per person |
| Qualifying years | 15 years min. | 35 years for full standard pension |
| Standard retirement age — men | 65 | From 2015 |
| Standard retirement age — women | 62 (rising) | Gradually rising to 63 by 2030 |
Insurances
Mandatory and recommended insurances for employers, employees, and contractors in Romania.
| Insurance | Coverage | Required by |
|---|---|---|
| Work Insurance Contribution (CAM) | Work accidents, unemployment, labour fund | Employers — 2.25% of gross payroll |
| Motor Third-Party Liability (RCA) | Third-party road damage | All vehicle owners — mandatory |
| Household Insurance (PAID) | Natural disasters (earthquake, flood, landslide) | All homeowners — mandatory basic policy |
Professional Indemnity Insurance — Contractors
Romania does not legally require most professionals to carry PI insurance, but it is often contractually required by end-clients in IT, consulting, and financial services. Regulated professions (lawyers, architects, doctors) typically maintain it through their professional bodies. AF can advise on appropriate cover for your sector.
Private Health Insurance
| Provider | Typical monthly cost | Type |
|---|---|---|
| Regina Maria | EUR 30–80 (individual) | Comprehensive network |
| MedLife | EUR 25–70 (individual) | Comprehensive network |
| Medicover | EUR 30–75 (individual) | International chain |
| IMG (International) | EUR 20–50 (young adult) | Expat-focused; international cover |
AF Solutions
Access Financial supports end-clients, recruitment agencies, and contractors operating in Romania with AOR and Limited Company solutions.
For End-Clients
Managing a contingent workforce can be complex. Our solutions streamline workforce management, making it simple, compliant, and cost-effective.
For Recruiters
We offer a complete suite of services, allowing you to simply, compliantly, and efficiently place your candidates internationally, with minimum fuss.
For Contractors
Focus on what you do best and let us take care of your payroll, tax compliance, social security, and immigration needs.
Free Consultation
FAQ
Find answers to our most frequently asked questions below.
What solutions do you offer in Romania?
In Romania, Access Financial provides two compliant engagement models:
Self-employment: Where an engagement genuinely meets the criteria for self-employed status, we register the contractor compliantly, manage their filing obligations throughout the contract term, and deregister them at the end of the assignment.
Limited company (PSC): We support engagements with contractors operating through their own limited company (personal service company). Where a contractor does not yet have a PSC but the engagement warrants one, we can handle company formation and ongoing administration on their behalf.
Is contractor misclassification a high risk under an AOR engagement?
Misclassification typically occurs when contractors are treated as employees in practice — fixed hours, integration into the team, no right of substitution, direct supervision, and so on. Prevention requires clear engagement frameworks, standardised processes, documented evidence of independence, and recurring audits. Accountability and the right technology are key to staying compliant at scale, particularly as tax authorities increasingly use data analytics and algorithmic checks to flag suspect arrangements.
At Access Financial, we help our clients minimise this risk by designing tailored classification frameworks, onboarding checklists, contractual safeguards, and recurring compliance audits.
What is your pricing model?
Our standard management fee is 5% of the contract value, with a minimum of €550. We also offer volume discounts on bulk engagements. To discuss pricing for your specific scenario, please get in touch with our team here: https://accessfinancial.com/#get-started.
Social Insurance
Romania has an unusual contribution structure for the EU: employees bear most of the social security burden, while employers pay only a small work-insurance levy. This results in a low employer cost on top of gross salary.
Lowest Employer Burden in the EU
Romania’s employer-side contribution (CAM) is just 2.25% of gross salary — among the lowest in the European Union. Combined with EU membership and a strong tech talent pool, this makes Romania highly competitive for international hiring.
Employer Contributions
Employee Contributions