Hiring Employees in Romania in 2025: What You Need to Know

Romania has rapidly emerged as a strategic hotspot on the global talent map, especially for companies seeking robust technical expertise, multilingual capabilities, and a strong work ethic. 

Over the past decade, Romania has transitioned from being a cost-effective outsourcing destination to a full-fledged technology and innovation hub in Eastern Europe. 

The country’s solid educational infrastructure, thriving IT sector, and widespread English proficiency make it a magnet for both startups and large enterprises looking to scale operations or tap into specialized skill sets.

For U.S. companies, hiring in Romania offers a compelling blend of high-quality talent, operational efficiency, and strategic European presence. With a workforce that combines traditional values and Western business practices, American employers can benefit from both cultural compatibility and competitive salary expectations. 

The Romanian labor market is especially attractive for tech, finance, customer support, and creative roles, providing access to talent that can drive innovation and business growth at a fraction of the cost compared to U.S.-based hires.

How to Hire Employees in Romania

Assess Your Hiring Needs

• Full-time vs. Project-Based Support: Consider whether you need long-term employees to build your core team or project-based contractors for seasonal surges and specialized tasks. Romania’s workforce is flexible and can support both models, but full-time hires offer greater loyalty and continuity, whereas contractors provide agility for short-term needs.

• Local Compliance Requirements: Romanian labor law is comprehensive and imposes strict obligations on employers regarding contracts, payroll, and statutory benefits. Companies must evaluate their readiness tomeet these requirements, as non-compliance can result in fines and reputational risk.

• Onboarding Speed vs. Long-term Control: If you need to hire quickly, partnering with an Employer of Record (EOR) allows for faster onboarding without the need to set up a local entity. However, if you plan a significant, permanent presence in Romania, establishing a legal entity provides greater long-term control and integration with the local market.

Hiring Options in Romania

• Set Up a Legal Entity: This involves creating a Romanian subsidiary or branch, allowing you to employ staff directly under local labor law. This route is best for organizations planning a long-term commitment and seeking full control over HR processes, culture, and compliance.

• Partner with an Employer of Record (EOR): An EOR acts as the legal employer on your behalf, handling payroll, contracts, tax withholdings, and statutory benefits. With an EOR, you can hire Romanian employees without creating a local company, ideal for testing the market or rapid team expansion.

EOR vs. Legal Entity Comparison

Aspect	Employer of Record (EOR)	Legal Entity
Pros	Quick market entryHandles payroll, compliance, and HR adminNo need for local business registration	Full control over hiring and managementGreater credibility in the local marketDirect employee relationship
Cons	Higher service feesLess direct influence on day-to-day HR matters	Significant setup time and costOngoing compliance and administrative burden
Cost & Implementation	Monthly service fees plus salary and benefitsMinimal upfront investmentFast setup (days to weeks)	Legal, accounting, and registration feesOffice setup costsLonger implementation (months)
Compliance, Payroll & Benefits	EOR manages all statutory compliancePayroll and benefits handled externally	Company responsible for all complianceIn-house or outsourced payroll

Understanding Worker Classification in Romania

Employees vs. Contractors

Choosing between hiring employees and contractors in Romania is not just a business model decision—it has critical legal and tax implications. Understanding the distinction ensures you remain compliant and avoid costly penalties.

Aspect	Employee	Contractor
Control	High (employer dictates hours, processes, tools)	Low (contractor decides how/when to work)
Commitment	Long-term, ongoing	Project-based, fixed-term
Benefits	Mandatory (healthcare, pension, leave)	None (contractor arranges own coverage)
Employer Costs	Higher (salary, social contributions, benefits)	Lower (service fee, no benefits/tax contributions)
Setup Time	Extended (compliance, documentation)	Quick (contract agreement)
Compliance	Employer responsible	Contractor responsible

Legal and Tax Implications

• Employees must be hired under a Romanian-language labor contract, with statutory social contributions and taxes withheld by the employer.
• Contractors invoice for services and pay their own taxes and social contributions, but must not be treated as de facto employees (i.e., controlled, integrated, or dependent on one client).
• Misclassifying employees as contractors can result in heavy fines, back payment of taxes and benefits, and reputational damage.

Hire and Pay Contractors

• Contractors provide invoices and typically work under a service agreement.
• Payments are made via bank transfer or online payment platforms.
• Ensure contracts clearly define project scope, deliverables, timelines, and payment terms.

Hiring Costs and Payroll in Romania

Hiring Costs Overview

• Minimum gross monthly wage (2025): RON 3,300 (~$730 USD) for general roles; higher for IT and specialized positions.
• Average monthly salary (IT sector): RON 7,000–12,000 (~$1,500–$2,600 USD).
• Employers are responsible for social security contributions (approx. 2.25%) and health insurance, while employees contribute 45% of gross salary to various funds.
• Additional costs may include meal vouchers, bonuses, and training allowances.

Payroll Setup Steps

1. Register your company or EOR with Romanian authorities for tax and social security purposes.
2. Collect employee data, including personal ID, bank details, and tax identification number.
3. Draft and sign a Romanian-language employment contract before the first day of work.
4. Enroll employees in the social security and health insurance system.
5. Set up regular payroll, ensuring timely salary payments and accurate withholding of taxes/contributions.
6. Submit monthly payroll reports and payments to Romanian authorities.

Income Tax Rates

• Flat personal income tax: 10% on employment income.
• Social security (CAS): 25% (employee contribution).
• Health insurance (CASS): 10% (employee contribution).
• Employer labor insurance: 2.25% of gross salary.

Payment Methods

• Direct deposit: Most common, ensures timely and recordable payments.
• Bank transfers: Used for both employees and contractors.
• EOR payroll: EOR manages all payments, with funds remitted to employees’ bank accounts.

Using Global Payroll Services

• Global payroll providers simplify compliance, ensure accurate tax/social contribution processing, and provide consolidated reporting.
• EORs or third-party payroll firms can manage local payroll, filings, and statutory reporting, reducing the risk of errors and penalties.

Compliance Risks When Hiring Employees in Romania

Incorrect Payroll Contributions

• Romanian payroll includes complex statutory deductions for pension, health, and unemployment funds.
• Miscalculations or late payments can result in substantial fines, penalties, and interest charges.
• Employers must stay current on ever-changing rates and reporting deadlines.

Permanent Establishment Risk

• A significant presence (such as remote employees working long-term for your company) may trigger a “permanent establishment,” obligating you to pay local corporate taxes.
• Consult with tax experts to avoid inadvertent establishment and unexpected liabilities.

Statutory Benefits

• Failure to provide mandatory benefits (paid leave, sick days, pension, health insurance) can lead to employee claims and government investigation.
• Benefits must be included in employment contracts and administered correctly.

Misclassification Risks

• Misclassifying full-time workers as contractors to reduce costs is illegal and aggressively enforced by Romanian authorities.
• Penalties include back payment of wages, benefits, taxes, and potential criminal liability for repeated offenses.

Provincial/Regional Law Variances

• Romania’s labor laws are national, but pay attention to sector-specific agreements and local practices, especially in industries like IT and manufacturing.

Onboarding New Employees in Romania

Before Their First Day

• Prepare a written employment contract (in Romanian) and have both parties sign before the start date.
• Collect necessary documentation: personal ID, tax number, bank account, and proof of qualifications.
• Register the employment contract with Romania’s Revisal (labor authority system).

On Day 1

• Provide induction on company policies, health and safety, and workplace rules.
• Issue access to work tools, company email, and internal systems.
• Introduce the new hire to their team and assign a mentor or onboarding buddy.

During Their First 90 Days

• Monitor employee adaptation and offer regular feedback sessions.
• Provide mandatory health and safety training.
• Assess performance and confirm continuation after the probation period (typically up to 90 days).

Offer Letter Essentials

• Clearly state job title, salary, work hours, probation period, start date, benefits, and notice period.
• All terms must align with Romanian labor code requirements.

NDAs and Confidentiality

• Include confidentiality clauses in the employment contract to protect sensitive business information.
• Consider separate NDAs for roles handling proprietary data or intellectual property.

Running Background Checks

• Permitted for certain roles, but must comply with data protection laws (GDPR).
• Common checks include education, employment history, and criminal record (with candidate consent).

Managing Remote Employees in Romania

Computer and App Access

• Provide secure laptops, VPN access, and company email addresses to remote hires.
• Utilize cloud-based collaboration and HR management tools for seamless remote onboarding and management.
• Ensure IT policies comply with Romanian and EU data protection standards.

Intellectual Property Protections

• Include IP assignment clauses in employment and contractor agreements to ensure all work products belong to the company.
• Clearly define ownership rights for code, software, creative works, and inventions.

Types of IP rights:

• Copyright (software, documentation, designs)
• Patents (inventions, technical solutions)
• Trademarks (brands, logos)
• Trade secrets (confidential processes, data)

Complying with Romania Labor Laws

Working Conditions by Employment Type

• Full-Time Employees: Standard workweek is 40 hours, with overtime regulated and compensated. Employees receive paid annual leave, sick leave, and public holidays.
• Part-Time and Fixed-Term: Pro-rata entitlements, with similar protections and requirements as full-time roles.
• Remote Work: Permitted, but employment terms must specify remote arrangements and ensure workplace safety standards are met.

No At-Will Employment

• Romanian law does not recognize at-will employment. Terminations must be for just cause or follow specific procedures outlined in the labor code.

Trade Unions and Collective Bargaining

• Romania has active trade unions and sector-wide collective bargaining agreements.
• Employees have the right to join unions, and employers must respect union activity and negotiate collective labor agreements where applicable.

Terminating Employees in Romania

Acceptable Termination Reasons

• Valid reasons include redundancy, poor performance (documented), misconduct, or mutual agreement.
• Employers must follow a clear disciplinary process and provide written notice of termination with justification.

Notice Periods and Legal Protections

• Minimum notice period is 20 working days, but may be longer by contract or collective agreement.
• Certain employees (pregnant women, those on medical leave) have special protections against dismissal.
• Unlawful or unfair terminations can result in court-ordered reinstatement or compensation.

Why U.S. Companies Can Consider Hiring in Romania

Access to Skilled Talent

• Romania is known for its deep pool of IT professionals, engineers, and multilingual customer support specialists.
• In-demand roles: software developers, system administrators, digital marketers, finance analysts, and creative professionals.
• Education: High university graduation rates in STEM fields; English, French, and German widely spoken.

Cost Efficiency

• Salary expectations are substantially lower than in the U.S., even for highly skilled roles.
• Lower overhead costs, no need for U.S.-style benefits packages, and office space is more affordable.
• Using an EOR or remote-first approach further reduces administrative and compliance costs.

Time Zone Overlap

• Romania’s time zone (EET) enables 3–7 hour overlap with U.S. teams, ideal for collaboration and real-time communication.
• Excellent for 24/7 support, follow-the-sun development, or global project management.

Growing Remote-Friendly Infrastructure

• Romania boasts one of the fastest internet speeds in Europe and high broadband penetration rates.
• Vibrant coworking and tech hub ecosystem supports remote and hybrid work models.
• Strong local startup scene and government support for digital transformation and foreign investment.

Power Your Team With Global Talent

Expanding your talent footprint into Romania offers U.S. companies a strategic edge, access to a well-educated, multilingual workforce, significant cost savings, and a business-friendly environment for tech-enabled growth. 

By understanding local hiring models, compliance obligations, and cultural nuances, you can build distributed teams that drive innovation while maintaining operational agility. Whether you choose to set up a local entity or leverage an EOR, Romania stands out as a premier destination for global talent acquisition.