Payroll in Romania: A Comprehensive Guide for 2026

Introduction

Payroll in Romania is governed by the Labour Code (Codul muncii) and runs through two authorities on different rhythms. The tax administration takes income tax and social contributions in one consolidated return, the D112, by the 25th of the following month, and the Labour Inspectorate takes employment data through the national employment register, REGES-ONLINE, as events occur.

The rules moved under employers during 2026, which makes this hard to set up once and leave alone. The minimum wage rose in July rather than at the usual January revision, and every wage below the new floor had to be realigned.

A separate rule caps how long anyone can stay there, since nobody can be paid at the minimum wage for more than two years, so the floor is tracked per person rather than checked once. The employer's share of sick pay changed in February, and that change runs only until the end of 2027.

In this guide, we walk through the payroll process in Romania, compliance deadlines, statutory pay and leave, 2026 tax rates, termination rules, and how to outsource payroll in Romania.

What is the payroll process in Romania?

The payroll process in Romania, just like elsewhere in the world, is divided into three different phases: pre-payroll, payroll calculation, and post-payroll.

Two country-specific features decide the timing. Every employee has to be entered in the national employment register before their first working day, and the whole monthly filing runs through a single consolidated return with one deadline.

Pre-payroll phase

The first, essential step of the pre-payroll phase requires you to understand the local laws governing payroll and employment, and establish a business entity in Romania.

Setting up the organization

Creating your new business entity in Romania is mandatory, as it enables you to operate in full compliance with the country's laws. Registration reaches two authorities: the tax administration for income tax and contributions, and the Labour Inspectorate for the employment register.

Business profile

As soon as you have registered your new Romanian business, the relevant local authority will send you a unique business number. Remember to specify this number on all official paperwork.

Work location

You might need to comply with different rules and regulations, depending on where in Romania you set up your business. Check carefully before you begin your operations.

Leave policy

At this stage, you will also need to establish and communicate to your employees specific policies on all the different types of leave that you offer, including sick leave, maternity and parental leave, and vacation leave.

Attendance policy

Whether or not your company is offering both full-time and part-time work contracts, it's important to define provisions on standard and special work attendance.

Statutory components

All the policies discussed so far are yours to define, formalize, and communicate. However, they always must be in full legal compliance with Romania's labor and employment laws.

Salary components

Just like in most other countries, Romanian wages are inclusive of both allowances and deductions.

Pay schedule

In Romania, most employees get paid once per month. Your company can select its own payday and must always ensure that salaries are paid out on that day or on the closest working day.

Employee information

Registering the employee in the national employment register is the step with a hard deadline, and it comes before the first working day rather than before the first payday.

As of April 2025, REVISAL, which was used by all Romanian employers to report main employment terms to the labour authorities, has been replaced by a new platform called REGES-ONLINE, accessible at reges.inspectiamuncii.ro.

Employers must now register specific and detailed information when retaining employees with disabilities, such as type of disability and duration of the disability certificate, and suspensions of employment due to medical leaves must also be registered.

Payroll calculation phase

Completing the pre-payroll phase allows you to swiftly move on to the payroll calculation phase. At this stage, you will need to transfer all the data gathered during the pre-payroll stage onto your payroll system, which will verify it and calculate precise salaries for each of your employees.

Romania puts almost the whole deduction burden on the employee side. Income tax and mandatory social contributions are withheld from the employee's salary at the time the salary is paid, and the standard procedure is for the Romanian employer to withhold the full amount of income tax and social contributions due from the employee's monthly salary income.

Post-payroll phase

Salary payments

As you might expect, the most important element of the post-payroll phase is ensuring that your employees' salaries are paid out promptly and correctly. Most companies prefer to do so via automated software, but you can choose to handle this manually by liaising with your bank.

Payroll accounting

Remember that monitoring your salary payouts is a crucial element that enables you to keep your internal accounting up-to-date and reliable.

Payroll reporting and compliance

On top of keeping track of salary payouts internally, you will also need to provide payroll-related information to all the relevant Romanian entities and authorities.

Reporting is consolidated into a single monthly return, Declarația 112 or D112, since income tax and social contributions are reported and paid by the local employer to the tax authorities by the 25th day of the month following the one the salary income relates to, with social contributions declared and paid to the relevant state budgets by the same date.

The employment register is separate and updated as events occur rather than monthly. Deadlines and penalties are covered in the compliance section below.

What is payroll compliance in Romania?

In Romania, most laws around labor and employment are included in the Labour Code (Codul muncii). There are, however, a number of additional statutes that tackle topics such as parental leave and benefits, temporary work, remote work, and sick leave.

Compliance runs on two separate tracks. The tax side is a single monthly return with one deadline, and the employment register side is event-driven, with deadlines that vary by what changed.

What are the payroll deadlines in Romania?

Income tax and social contributions are reported and paid by the local employer to the tax authorities by the 25th day of the month following the one the salary income relates to, and social contributions are declared and paid to the relevant state budgets by the same date. One filing covers both: the monthly Declarația 112, commonly called D112.

The employment register is where the work happens. Every employer must set up a general register of employees in electronic format, known as REGES-ONLINE, and each type of change carries its own deadline:

Several deadlines fall before the event rather than after it, so a change agreed on Friday for a Monday start has already missed its window. And where a change results from a court decision, the registration must be made within 10 working days from the date the employer became aware of its content rather than on the standard timing.

Record keeping has a digital condition attached. Where employment documentation has been signed using an advanced or qualified electronic signature, the employer must maintain the employee's personnel file in electronic format and comply with the relevant electronic archiving rules.

Where employment documentation has been signed using an advanced or qualified electronic signature, the employer must maintain the employee's personnel file in electronic format and comply with the relevant electronic archiving rules.

What are the penalties for payroll non-compliance in Romania?

Exposure comes from two regulators, and the register penalties are charged per instance rather than per month.

On the tax side, late payment attracts late-payment interest set at 0.02% per day of delay, plus a late-payment penalty of 0.01% per day of delay. The two run together, so a late month accrues at 0.03% a day.

On the register side, the fines are fixed amounts. Romanian currency is Romanian lei (RON):

The larger exposure is missing the pre-start deadline altogether. Allowing an employee to work without a signed and registered employment contract before the first day of work qualifies as undeclared work, which carries its own penalty.

From 18 December 2025, the fine rose to RON 40,000 per undeclared employee, capped at RON 1,000,000, doubled from the RON 20,000 per employee and RON 200,000 maximum that applied before. A late start-date registration counts as undeclared work rather than a filing error.

Both the register fines and this one are charged per employee rather than per month, so a company that missed ten registrations across a year is exposed ten times over. The employer is also required to immediately correct any errors upon becoming aware thereof, so discovering a historic mistake creates an immediate obligation rather than a discretionary one.

Enforcement got sharper at the same time. Also from 18 December 2025, labour inspectors holding specific public functions are required to wear body cameras during inspections, with authority to record workplace activities without obtaining consent, and the labour authority may retain those recordings for up to six months.

Skuad helps teams carry that reporting load through a single global payroll platform.

Here is what Skuad helps with:

• Supports payroll processing in 70+ currencies, with tax withholding and statutory deductions applied at the point of calculation
• Helps generate and issue payslips for every pay cycle across supported markets
• Facilitates statutory contribution workflows across supported markets, covering applicable social insurance and pension obligations
• Assists with payroll record keeping and year-end documentation across supported markets
• Helps payroll teams stay aligned with local filing requirements as those requirements change across 160+ countries

What are the main payroll components in Romania?

The sections below detail the most important components of payroll in Romania. It's crucial that you become familiar with them in order to process and manage payroll effectively.

What is the minimum wage in Romania?

Romania has two minimum wage levels in 2026, because the usual January revision was postponed. Government Decision No. 146/2026 increased the gross minimum wage guaranteed for full-time employees by around 7% from July 2026.

From July 2026, all wages set to values lower than the minimum wage need to be aligned with the new value, so a mid-year adjustment was required rather than optional. And there is a rule with no equivalent in most markets: an employee cannot be remunerated at the minimum wage level for more than 2 years, which means tracking how long each employee has been on the floor and raising them above it before the clock runs out.

What are the working hours in Romania?

Typically, Romanian employees on a full-time contract are expected to work 40 hours per week, over five working days.

How is overtime paid in Romania?

Overtime work in Romania is classified as work that exceeds eight hours a day, or 40 hours a week. By law, weekly overtime is not supposed to exceed eight hours.

Overtime shall be compensated by paid off hours during the next 90 days, and only if compensation is not possible within the 90 days is the overtime paid by adding a bonus to the salary. That bonus is established by negotiation through the collective labour agreement or individual employment contract and cannot be lower than 75% of the base salary.

Two groups are excluded entirely, since employees under the age of 18 years are prohibited from overtime work and part-time employees cannot work overtime. The employee's total working hours for one month, including overtime, is recorded in writing in a timetable and mentioned in the pay slip.

How much annual leave do employees get in Romania?

Employees are entitled to a minimum of 20 working vacation days per year, counted in working days rather than calendar days. Collective agreements frequently improve on that, so check the applicable agreement before setting a policy.

How much sick leave do employees get in Romania?

All Romanian employees who are protected by social insurance and have paid the relevant contributions can access up to 183 days of sick leave in one year. If necessary, this can be extended to an extra 90 days. The limit applies for each type of illness rather than per employee per year.

The employer's share of that cost changed on 1 February 2026. The employer previously covered the first five calendar days, but effective 1 February 2026, Emergency Ordinance No. 91/2025 means the first day of medical leave will not be compensated, and only days 2 to 6 are paid by the employer.

The measure is temporary and in effect until 31 December 2027, and it affects all medical certificates issued during that window, except for certificates issued to insured individuals who are placed under an official isolation measure, where day 1 remains paid. From day 7, the national health insurance fund takes over.

Sick pay is calculated as a percentage of the average gross monthly income for the 6 months preceding the period of sickness, depending on the cause and the duration of incapacity, so a short absence and a long one are paid at different rates.

What parental leave applies in Romania?

Pregnant employees in Romania can receive 126 days of maternity leave. This begins 63 days before the expected childbirth, and continues for another 63 days after childbirth.

The split is flexible within limits, since the first 42 days of leave after the child is born are compulsory, and the remaining 84 days need not be taken if the mother does not feel that she needs them, or can be taken earlier, before the birth, or later, after the birth.

During maternity leave, new mothers are entitled to receive 85% of their standard wages, calculated as 85% of the average monthly income earned by the mother during the last 6 months before maternity leave. The allowance is not subject to the income tax system. Maternity pay is also offered when a baby is stillborn, since the allowance is paid for the 126 days of maternity leave, even if the child is stillborn.

Two points matter for cash flow:

• In the case of employed persons, the maternity allowance is paid by the employer, so the employer funds it first and reclaims it rather than the fund paying the employee directly.
• Eligibility is not automatic, since the employee must have contributed for at least 6 months to the social insurance system during the last 12 months before the maternity leave.

New fathers can receive paternity leave for a duration of at least 10 working days, with the possibility of an additional 5 working days being granted if the father undergoes childcare training. Unlike maternity leave, paternity leave is paid by the employer as a direct cost rather than a reimbursed one.

A separate entitlement covers sick children. Parents who have to stay at home to look after a sick child receive an allowance equal to 85% of their average monthly wages for a period of up to 45 days a year, which can be extended in certain circumstances. It applies where the child is aged up to 7, or up to 18 where the child has a disability, or up to 16 for serious diseases.

Longer leave applies beyond all of these. Either parent can take parental leave up to two years, or three years for a child with a disability, paid at 85% of the average net income with a minimum of RON 1,495 and a maximum of RON 8,500, funded by the state rather than the employer.

What are the Romanian public holidays in 2026?

Romania has one of the longer public holiday calendars in the European Union. Five of the 2026 dates fall on a weekend, and there is no statutory substitution, so a holiday landing on a Saturday or Sunday is simply lost unless a collective agreement or internal policy says otherwise.

These are the national holidays for 2026:

Two features shape the 2026 calendar for payroll.

Children's Day and the second day of Pentecost both fall on Monday 1 June, so two statutory holidays produce one day off. Add the five weekend dates, and the number of actual non-working weekdays is well below the headline figure.

Working a holiday triggers time off rather than a premium. Work performed on a public holiday must be compensated with paid time off within the next 30 days.

Where the hours also exceed the legal working limit, the position compounds, since hours worked on rest days exceeding the legal work limit must be compensated both through the weekend premium and through a premium of at least 75% for overtime.

What are the payroll taxes in Romania?

Romania splits payroll taxes unusually. Almost the entire burden falls on the employee side, at 45% of gross before the employee sees anything, while the standard employer contribution is 2.25%. That makes the employer cost close to gross salary and the gross-to-net gap wide, which is the opposite of most European markets.

What is the income tax rate in Romania?

Romania applies a flat personal income tax rate of 10% to employment income, with no brackets and no separate rate by income level. The employer withholds it at source and reports and pays it to the tax authorities by the 25th day of the month following the one the salary income relates to.

The 10% applies to income after social contributions rather than to gross, so the two calculations run in sequence rather than in parallel.

How much are social security contributions in Romania?

Social security contributions in Romania run on both sides, and the assessment base is the gross income derived from dependent activities.

The employer pension contribution reappears in two situations, and the difference is the duration of exposure to occupational risk. It is 4% for uncommon work conditions or 8% for special work conditions, on top of the 2.25% work insurance contribution.

The test is how much of the working day carries the exposure and not the industry label. A role in construction, mining, or manufacturing may fall into either band or neither, depending on the actual workplace assessment.

For an office-based hire, the employer contribution stays at 2.25%, and for a classified role it reaches 6.25% or 10.25%, so the classification has to be settled before the offer rather than after the first pay run.

The base reaches beyond salary. It covers gross salary income derived by individuals, resident and non-resident, based on an employment contract, as well as revenues treated as salaries such as administrators' remuneration and directors on a mandate contract.

Benefits from third parties can also fall to the employer, since where benefits in kind or in cash are granted by other parties, and the payment is made through resident employers, the employer computes and withholds.

What does a Romanian hire actually cost an employer?

Employer cost is close to gross salary, which is unusual in the European Union. On a gross of RON 4,325, the standard employer contribution of 2.25% adds under RON 100 a month.

The employee side is where the gap opens, since 25% social insurance and 10% health insurance come off gross first and 10% income tax applies to what remains. Salary negotiations in Romania are usually conducted in net terms for that reason, and an offer quoted gross will read very differently to the candidate.

Employer cost in Romania is close to gross salary, which makes a hire easy to budget and hard to pitch. Candidates negotiate in net terms, and 45% of gross comes off the employee side before income tax applies, so a gross figure reads very differently to the person receiving it.

The employer side is not fixed either, since a role classified as difficult or special carries a pension contribution above the standard rate, and that classification has to be settled before the offer rather than after the first pay run.

Skuad's employee cost calculator helps you model that gap before an offer goes out. It estimates total employment cost across 160+ countries, covering gross salary and applicable employer contributions, and supports cost comparison between markets in 70+ currencies while the salary number is still moving.

Estimate the cost of a Romania hire.

What are the termination and severance rules in Romania?

Romania is unusual among European markets: there is no general statutory severance. There is no statutory minimum or maximum severance payment, and severance is paid only if it is agreed as such in the individual or collective employment agreement.

Dismissal requires a valid ground and a documented procedure, and an annulled dismissal leads to reinstatement with full back pay rather than a capped payment.

On what grounds can an employer dismiss in Romania?

Provisions around termination of an employee in Romania vary according to the specific employment contract and collective agreement, as well as the reason for dismissal. Employees can be terminated either due to their conduct at work or because their job no longer exists.

In statutory terms, the grounds for dismissal must have a real and serious cause and are split into two types:

Redundancy is not a paper exercise, since the cancellation of the position must be effective and have a real and serious cause. Re-hiring for the same role shortly afterwards undermines the ground.

In all cases, the employer must issue the dismissal decision within 30 calendar days from the date the employer acknowledged the cause of the dismissal.

What notice do employers have to give in Romania?

The statutory minimum notice period is 20 working days, and it does not vary with length of service. What varies is the ground:

The 20 days is a floor rather than a standard, since individual or collective labour agreements may provide for longer notice terms. Check the contract before assuming the statutory minimum applies.

Dismissal without notice is narrow. Termination without notice is only lawful in case of disciplinary dismissal, subject to a prior investigation, and where the employee is placed under arrest or under house arrest for more than 30 days.

Even then, the clock runs, since the employer should not wait more than 30 days after becoming aware of the reasons triggering the dismissal before approving the dismissal.

Is severance pay required in Romania?

Generally no. There is no statutory minimum or maximum severance payment, and severance is paid only if it is agreed as such in the individual or collective employment agreement.

One narrow exception exists: the only time the Labour Code states that a severance payment should be negotiated is for physical or mental unfitness to perform the activity required by the job description, and even then the amount is not specified.

Collective agreements are where the obligation usually comes from, and coverage is patchy. Redundancy compensation is not universally granted, but only to the extent that the company is subject to a collective agreement which contains provisions on redundancy compensation, usually correlated with seniority in the company.

Since the national collective agreement ceased to be in force from 2011 and there are very few sectoral collective agreements, most severance obligations now fall in company-level agreements.

For a foreign employer, the practical point is the reverse of most markets. Check the individual contract and any applicable collective agreement before assuming a severance cost exists, and check them again before writing one into a new contract, since in the absence of such an agreement, the employer cannot be made to pay the employee any amount upon his termination.

An offer letter clause creates an obligation that statute does not.

One post-termination cost does come from the contract rather than statute. Where a non-competition clause is used, it is only valid if the employment agreement specifies an indemnification of at least 50% of the average of the last six monthly gross salaries before the employment termination, payable monthly during the restricted period, for a legal maximum duration of two years.

A non-compete is therefore a payroll line that continues after the employee has left.

What is the collective redundancy threshold in Romania?

Collective redundancy is triggered by numbers within a 30-day window, and it turns an individual exit into a consultation process:

Crossing the threshold adds time rather than money. The employer must consult employee representatives, notify the Territorial Labour Inspectorate and the local public employment office at least 30 calendar days before issuing the dismissal decisions, and reinstate the dismissed employees if the activities whose interruption led to the collective redundancy are resumed within 45 calendar days.

What happens if a dismissal is challenged in Romania?

This is where the money is, since there is no statutory cap. Where the requirements are not met, the dismissal will be null and void and, upon request, the employee can be reinstated into his or her former position within the company, which triggers the obligation to pay wages and salary benefits corresponding to the period from the dismissal effective date and until the reinstatement date, as well as compensatory damages.

Moral damages and court expenses may also be awarded, depending on the evidence the employee brings. The exposure grows with the length of the proceedings rather than being fixed at the point of exit.

Cash flow makes it worse before it gets better. The Tribunal decision is enforceable, meaning that in some cases, if the employee wins in the first instance and asks for the enforcement of the initial court ruling and afterwards loses on appeal, the employer has to take additional measures in order to obtain the amounts already paid. An employer can pay out and then have to chase the money back.

Grounds are rarely the problem. Dismissal decisions are most commonly annulled for reasons related to their legality rather than for lack of substantive grounds, so procedure and documentation carry more weight than the underlying reason.

Skuad helps reduce that exposure through the Shield platform, a compliance layer covering employer obligations across supported markets.

Here is what Skuad helps with:

• Assists with termination and offboarding aligned with local labor requirements across supported markets
• Helps calculate notice periods and severance in line with local statutory minimums
• Supports employment contract generation across 160+ countries, so terms are documented from the start
• Helps flag worker classification risk before it turns into a compliance issue
• Helps keep employment records and documentation in order across the full employment lifecycle

How to outsource payroll in Romania?

Payroll management in Romania can bring about a myriad of challenges, while also being a very costly process if you decide to tackle it by yourself. The question underlying the choice is who carries the obligations, since they follow the legal employer rather than whoever runs the payroll.

1. Internal payroll through a Romanian entity

Internal payroll requires companies to hire and pay specialized HR and accounting staff, which adds to overhead costs and eats into margins. It also carries the tightest deadline on the page, since core employment data has to reach the national employment register at the latest on the day before the start of work.

Missing it is not a filing error, because allowing an employee to work without a signed and registered employment contract before the first day of work qualifies as undeclared work, now carrying a fine of RON 40,000 per undeclared employee.

2. Remote payroll

This method involves managing payroll from your parent company in your home country. It is generally more affordable than internal payroll, but it also requires you to stay constantly up-to-date on all rules and regulations in Romania.

It also moves obligations onto the employee rather than removing them, since for salary income received from abroad under a foreign employment contract it is the personal obligation of the individual to report such income and pay the income tax due every month.

The social security side stays with you, because where the foreign employer sits outside the EEA or a social security agreement country, the obligation to report the Romanian social charges stays with the foreign employer, and a specific registration procedure has to be undertaken in Romania.

3. Romanian payroll processing company

With this approach, you can handle payroll via a local Romanian agency. They know the 25th of the month filing date and the event-driven register deadlines. What stays with you is the employment relationship and everything priced into it: the 2.25% work insurance contribution, or 4% or 8% more where the role is classified.

The exit exposure also remains with you, since an annulled dismissal triggers payment of wages and salary benefits from the dismissal effective date until reinstatement, as well as compensatory damages. A bureau processes the payroll, and it does not become the employer.

All three routes leave the obligations where they started. The entity, the registrations with both authorities, the monthly filing, the register entries, and the exit exposure stay with your business.

4. Employer of Record

A fourth option moves the employment relationship itself. Skuad acts as the legal employer across 160+ countries, so your company can hire, onboard, and pay people without setting up a local entity.

Here is what Skuad helps with:

• Supports employment contract generation across 160+ countries, aligned with local labor laws and statutory requirements
• Supports payroll processing in 70+ currencies, with tax withholding and statutory deductions
• Facilitates statutory contribution workflows across supported markets, covering applicable social insurance and pension obligations
• Helps administer statutory benefits, paid leave, and parental entitlements in line with local requirements
• Assists with termination and offboarding, including notice periods and severance calculations as required locally
• Supports work permit and visa applications for foreign nationals joining your team

See what hiring in Romania through Skuad costs.

Start running payroll in Romania the right way

Payroll in Romania is cheap to run and expensive to get wrong. The employer contribution is 2.25% for a standard role, and there is no statutory severance, so the headline cost looks low.

What costs money is timing and procedure. Register entries fall due before the change takes effect, penalties are charged per employee rather than per month, and a start date filed late counts as undeclared work rather than a filing error. A dismissal annulled on procedure carries back pay until reinstatement, with no statutory ceiling.

None of that shifts with who processes the payroll. Software, a bureau, or a finance team abroad each cover part of the work, and the obligations stay with the legal employer. The fourth outsourcing route moves the employment relationship itself.

Skuad supports the operational side of employing people internationally, covering employment contracts, payroll processing in 70+ currencies, statutory contribution workflows, benefits administration, and offboarding, all from one platform.

Book a demo to see how Skuad supports payroll for a Romanian hire without entity setup.

FAQs

1. How does payroll in Romania work?

Payroll in Romania is governed by the Labour Code and runs through two authorities. Income tax and social contributions are filed and paid to the tax administration in one consolidated monthly return (D112) by the 25th, while employment data goes to the REGES-ONLINE register as events occur.

2. What are the payroll tax rates in Romania?

Romania splits the burden unusually. Employees carry 25% pension (CAS), 10% health (CASS), and a flat 10% income tax applied after contributions, totalling around 45% of gross. Employers pay just 2.25% work insurance (CAM), one of the lowest employer rates in the EU, so employer cost sits close to gross.

3. Why is employer cost so low but hard to pitch in Romania?

A 2018 reform shifted almost all contributions onto the employee side, so the standard employer charge is only 2.25% of gross. But roughly 45% comes off the employee's gross before they see anything, so candidates negotiate in net terms, and a gross offer reads very differently to them.

4. What is the minimum wage for payroll in Romania in 2026?

Romania has two 2026 levels because the usual January revision was postponed. The gross minimum is RON 4,050 from January to June, rising to RON 4,325 from 1 July. All wages below the new floor had to be realigned mid-year, and no one may stay on the minimum wage beyond two years.

5. When are payroll filings and register entries due in Romania?

The tax return covering income tax and contributions is due by the 25th of the following month. The employment register runs separately and event-driven: a new hire must be entered the day before work starts, and missing that deadline counts as undeclared work, not a filing error, carrying steep per-employee fines.

6. Is there statutory severance for payroll in Romania?

Generally no, as Romania has no statutory minimum or maximum severance; it is owed only where an individual or collective agreement provides for it. The real exposure is an annulled dismissal, which triggers reinstatement with back pay from the dismissal date until reinstatement, with no statutory cap on the amount.