As many companies shift gears towards a remote-first work environment, employers are increasingly hiring international employees. Often, this is because countries, like Romania, offer a highly skilled workforce with a fresh perspective.
Salaries are essential when budgeting for hires in Romania, but there are numerous other costs to consider. From overtime and severance to social security contributions, hiring overseas employees requires more than calculating your new employee’s wage.
Employers should also consider supplementary benefits like coworking passes or gym memberships. This can help with employee retention and satisfaction.
Overall, it can be challenging to determine total costs on your own. This article will guide you through the costs of hiring employees in Romania.
Mandatory Costs
When hiring employees in Romania, you’ll need to consider numerous mandatory costs. These include wages, taxes, benefits, overtime pay, and severance pay. Adherence to these costs will ensure you are compliant with local labor laws and regulations.
Salary
The minimum wage in Romania currently stands at RON 3000 (USD 645) per month. Employers in Romania are only allowed to keep employees at the minimum wage for two years; after that, they are required to increase it.
Despite the minimum wage being relatively low, the average salary in Romania is higher, standing at RON 8980 (USD 1937). However, depending on the industry, salaries are often higher. For example, those working in finance and tech generally make above RON 10,000 (USD 2157) per month.
Overall, the salaries in Romania are relatively low, especially compared to other European countries.
Taxes and Benefits
When hiring employees from Romania, it’s essential to be aware of the mandatory taxes and contributions. Employers are required to pay 6.25% of an employee’s salary, which goes towards unemployment, pension, and other social security benefits.
Paid Leave
Employees in Romania are entitled to take numerous types of paid leave, many of which are paid by the employer.
Annual Time Off and Holidays
When it comes to annual paid time off, employees are entitled to 20 days, fully paid by the employer.
Romania also has 15 public holidays which are non-working days. However, unlike most other countries, there is no weekday substitution if the holiday falls on a weekend. This way, employers don’t need to worry about the extra cost.
Maternity and Paternity Leave
New mothers are entitled to 126 days of fully paid maternity leave; 63 days before, and 63 after the birth of the child. Maternity leave is paid by the Unique National Fund of Health Insurance (FUNASS), in which they receive 85% of their average monthly salary. In addition, new mothers are entitled to maternity risk. This is if the health of the mother and the baby are at risk. During this time, the employee receives 75% of their regular pay.
New fathers are also entitled to 10 days of fully paid paternity leave; if they take an infant care course, it increases to 15 days. Paternity leave is paid for by the employer.
Sick Leave
Regarding sick leave, employers also need to be aware of additional costs they may face. Employees are entitled to 180 days of sick leave. However, only the first five days are paid for by the employer. From six days onward, they receive 75% of their salary, which is covered by FUNASS.
Other Types of Paid Leave
There are many other types of paid leave available. If eligible, employees are entitled to bereavement leave, which is three paid days off. Wedding leave is also available. For employees that are getting married, they are entitled to five paid days off. If their child is getting married, they are entitled to two paid days off. For employees who have adopted a child, they are entitled to six weeks of paid leave.
Overtime Pay
The standard work week in Romania consists of eight-hour days over five days. Employees are only allowed to work eight hours of overtime a week. Overtime is paid at a rate of 175% of their hourly rate. When budgeting for your employee in Romania, this is a critical cost to keep in mind.
Severance Pay
Severance in Romania is not mandatory. Severance pay is outlined in employment contracts and has to be mutually agreed upon by both parties.
Supplemental Costs of Hiring Employees in Romania
In addition to statutory benefits, employers may also provide supplemental benefits. Offering additional benefits can help attract top talent, motivate staff, and increase retention.
Benefits
Making sure your new employees are happy and healthy is paramount. You can support their health by offering a robust benefits package. While many employers choose to offer private health insurance for their employees, doing so comes at an extra cost.
The price will significantly vary depending on the type of private health insurance and coverage.
An EOR like Borderless will typically offer benefits packages. This will usually include medical, dental, vision, and life insurance along with a retirement savings plan.
Bonuses and Extras
Romania doesn’t have any mandatory bonuses, such as the 13th-month bonus that’s common in many other countries. However, performance-based bonuses and signing bonuses are typically offered. Additionally, employers may want to consider offering employees a lunch or coffee stipend.
Employers also need to take workspace costs into account when hiring employees in Romania. Since new hires will typically be working remotely, they’ll need to set up a home office or access a coworking space.
Providing a home office stipend can be hugely beneficial. It can go towards a company laptop, ergonomic office chairs, or keeping your system secure, like with antivirus software.
Coworking offices have become the go-to for many employers. Not only do coworking spaces provide employees with a designated space to work, but they also encourage collaboration and networking.
The costs of coworking spaces in Romania vary by region. However, because coworking offices aren’t as prevalent as they are in other countries, the prices may be higher. In Bucharest, aSpace Baneasa provides a hot desk for a monthly fee of RON 744 (USD 160) per month. In the city of Cluj-Napoca, Silicon Forest coworking has a hot desk for RON 943 (USD 203). However, in smaller cities, like Oradea, Oradea Tech Hub offers a dedicated desk for only RON 491 (USD 105) per month.
Another common fringe benefit employers offer is a gym membership. The average price of a gym membership in Romania is RON 171 (USD 37) per month.
Work With Borderless
Hiring employees in Romania may feel overwhelming, especially with so many different costs to be aware of. Working with an Employer of Record (EOR) can help take the stress out of global hiring and budgeting.
An EOR like Borderless will do the heavy lifting, guaranteeing that you compliantly hire and pay employees in Romania. To get started, book a demo today.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
