The individual income tax rate is 10%. Income tax is calculated according to a flat rate.

The employer cost is generally estimated at 6.25% of the employee salary.

• Labor insurance contribution - 2.25%
• Disability cost - 4.0%
• Teleworking indemnity - RON 400*
• IT Assessment (one time fee) - USD 300

*Pro-rated for employees working less than the full month.

Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday.

Overtime payment is mandatory. It can be compensated financially or in the form of paid time off. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 32 hours of overtime, per month. For additional hours, employees are paid:

• 150% of average salary per hour, during weekdays
• 200% of average salary per hour, during weekends

Pregnant employees who have worked for 6 months in the last 1 year are entitled to 126 days of paid leave. The employee must take a minimum of 42 days after the birth of the child. Maternity leave is paid for by the National Social Security Fund at 85% of the employee’s average income over the previous 12 months.

The employee cannot extend leave.

Employees who are insured in the state social insurance system are entitled to 10 days of paid paternity leave. The employee will receive 100% of the salary during this period, and this payment is made from the employer salary fund.
If the employee obtains a certificate of completion of the childcare course, paternity leave can be extended by a further 5 days, resulting in a total leave of 15 days. 

Employees are entitled to 2 years of unpaid parental leave, and employees that are parents of children with disabilities are entitled to 3 years of unpaid parental leave. The leave is granted to the father if the mother does not benefit from this parental leave, or if she has used a part of the leave.

The employee will receive a childcare allowance from the state during parental leave, which is set at 85% of the average net income earned by the parent in the last 12 consecutive months of the 2 years prior to the birth of the child. 

Employees are entitled to paid sick leave for up to 90 days per year. The first 5 calendar days of sick leave are paid by the employer, with additional days paid for by the employer and reimbursed by the National Health Insurance House. This leave is paid at different rates based on the disease. Payment rates are determined by the illness code and percentage code that is outlined in the medical certificate issued by a doctor or hospital. The minimum salary payment is 75%, and the maximum is 100% of the salary.

Sick leave can be extended for a maximum of 183 days within a calendar year, counted from the first day of illness, with the approval of a social insurance specialist doctor.

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.

Terminations in Romania can be complex. There is no at-will termination in Romania for employers and termination must be done for just cause.

Compliant terminations include:

• Employee-related reasons:
  • Disciplinary misconduct (in case of a severe breach, or more repeated breaches of work discipline rules or of those rules set forth in the individual employment agreement, collective bargaining agreement, or internal regulations)
  • Physical/mental incapacity (as ascertained by the relevant medical bodies)
  • Professional inadequacy
  • Placement in police custody or house arrest for over 30 days
• Reasons unrelated to employee
  • Redundancy following workforce restructuring, based on e.g. economic, financial or organizational grounds
• Mutual agreement
• Probation period
• Expiration of employment contract

Note: Employees cannot be terminated during leaves, during temporary disability, during quarantine, or during pregnancy, if the employer knew about the pregnancy.

The minimum notice period is 20 days and is dependent based on the reason for termination.

• Dismissal - minimum 20 days
• Employee resignation
  • Executive positions - Maximum 20 days
  • Management/coordination positions - Maximum 45 days
• Termination of contract by mutual agreement - the employer may waive the notice period

Under Romania legislation, the termination date is different from the last working date of the employee (usually the last working date is one day before the termination date).

During termination/resignation, employees are paid in the same payroll cycle of their last working day. For example, if their last working day is June 29, the termination date will be June 30th.

Both full-time and part-time employees are entitled to 20 days of paid time off (PTO) a year. PTO accrues at a rate of 1.66 days per month. Employees are eligible to take vacation as soon as leave has accrued.

Legally, employees must take a minimum of 10 consecutive business days of paid vacation per year.

Romania celebrates 17 national public holidays. National public holidays include:

• New Year’s Day
• Day after New Year’s Day
• Baptism Day
• St John’s Day
• Day of the Union of Romanian Principalities
• Orthodox Good Friday
• Orthodox Easter Sunday
• Orthodox Easter Monday
• Labor Day
• Children’s Day
• Orthodox Pentecost (Whit Sunday)
• Orthodox Pentecost Monday (Whit Monday)
• Assumption of the Virgin Mary
• St. Andrew’s Day
• Romania National Day
• Christmas Day
• Second Day of Christmas

Contracts must be in Romanian and can be bilingual. They must be in writing and signed by both parties.

A contract must include:

• Identity of parties
• Workplace and headquarters
• Position and job description
• Criteria for performance evaluation
• Working conditions (in accordance with local legislation)
• Contract date
• Type of employment contract (fixed-term, temporary)
• Annual leaves
• Notice period
• Salary
• Working hours
• Duration of probation period
• Termination details

Probation periods are not mandatory. There is no minimum probation period. The maximum probation period depends on the type of employment.

For indefinite period contracts:

• Executive position - 90 days
• Management and coordination position - 120 days
• Employees with disabilities - 30 days

Definite period contracts:

• Contracts less than 3 months - 5 days
• Contracts between 3 and 6 months - 15 days
• Contracts longer than 6 months - 30 days
• Contracts longer than 6 months (employees in management positions) - 45 days