Two critical aspects of any employment contract are compensation and benefits. When you expand operations to a new country, it can be challenging to identify what guaranteed benefits you need to give employees and what supplemental benefits they expect from their employer.
G-P can help you through the confusion. We are experts in Romanian compensation laws with an established PEO in the country. We will hire employees on your behalf, add them to our compliant payroll, and put them on our benefits plan to make sure you stay covered every step of the way.
Romania Compensation Laws
Romania’s minimum wage rose to 3,000 RON per month in January 2023. Romania’s labor code stipulates that an employee can only be paid the minimum wage for a two-year period, after which they must receive a raise.
Employees who work more than eight hours a day or 40 hours a week are also subject to overtime compensation. Employers can either pay employees overtime at 75% above the employee’s base salary or provide additional time off within 30 days of when the overtime work occurred.
Since some industries have collective bargaining agreements (CBAs), the Romania compensation laws you’ll need to follow could change. Make sure you check any applicable CBAs since you will need to adhere to those requirements as a minimum.
Guaranteed Benefits in Romania
Romania celebrates 11 public holidays during which employees get the day off. As part of your Romania benefit management plan, you’ll need to give employees at least 20 days off per year. They are also entitled to additional days off for personal reasons, including five days for marriage and two days for the marriage of an employee’s child.
Another guaranteed benefit is the country’s universal free health care system. However, some services must be paid for up front and then reimbursed. Many employees may try to purchase private health insurance since public care is not often up to the standards of other countries.
Romania Benefits Management
A strong Romania benefit management plan also includes additional benefits that may not be required by law but can attract candidates to your open positions. In Romania, employers do not typically provide private health insurance, although employees may look for a plan themselves. However, employers commonly offer meal vouchers to employees, which are a tax-free benefit.
Putting together the perfect benefit management solution on your own takes time and money. Alternatively, G-P can simplify the process. Our Employer of Record platform enables us to hire employees who work on your behalf. We also take on matters of compliance, so you only have to worry about running your company instead of paying employees.
Restrictions for Benefits and Compensation
Any benefits and compensation restrictions typically come from a CBA. Employers should look over any applicable CBAs before drafting an employment contract. Otherwise, you risk outlining the wrong minimum requirements in your contract.
Romania Competitive Benefits Planning
Growing your enterprise in a new country comes with several tasks, including benefits planning. You’ll need to learn about a new labor market and how you can make your benefits packages appealing to nationals. With a strategic approach to planning, you can support your success abroad with employee benefits in Romania.
Romania Employee Benefits Plans
Creating a competitive benefits plan can make your business stand out from other companies in the labor market. Applicants tend to show more interest in jobs with developed benefits plans. The benefits you offer your employees can also help you improve retention.
Potential perks can include:
- Supplemental insurance or pensions
- Holiday bonuses
- Meal allowances
- Housing stipends
- Travel allowances
- Professional training
- Telecommuting opportunities
Legal Obligations for Benefits
While your supplemental provisions and perks will make your company competitive, you need to consider your legal obligations first. As an employer, you must provide:
- Social security contributions
- Paid public holidays
- Paid annual leave
- Maternity leave
Designing Romania Employee Benefit Plans
As you design your benefits plan, you’ll want to balance your company’s available resources with your employees’ needs. While every country has different laws and expectations, you can follow a few basic steps to create a competitive plan anywhere.
1. Understand Your Company’s Revenue and Goals
Benefit costs can add up, so it’s essential to understand your revenue and how much you’re willing to spend. Consider your other expenses and create a budget. Keep in mind that you can adjust your budget later as your business grows and you have more resources available.
You should also assess your goals in this stage. You may be able to use your benefits plan as a way to achieve them. For example, if you want to build a large team, you can opt for smaller benefits packages and hire more employees. If you want to improve retention, you might scale back on hiring and recruiting and offer more supplemental benefits.
2. Learn About the Market and Employee Expectations
To make your company competitive in the labor market, you need to learn about other companies’ benefits. Research businesses in the area with similar size and industry to yours. When you know what other companies provide for their employees, you’ll have an idea of what workers expect.
You can also learn about employee needs and expectations by talking to workers directly. Distribute surveys or conduct interviews to hear from employees and learn which benefits they’re most interested in.
3. Use the Information You’ve Gathered to Create a Plan
After you’ve conducted some research, you can create a plan that balances your resources with employees’ needs. Start by allocating funds to the required benefits. Once you’ve met the threshold for compliance, you can choose supplemental provisions.
Average Cost of Benefits
Every company offers different benefits at various scales, so an average cost wouldn’t be a fair reflection of what you can expect to spend. Creating a budget for your benefits can help you set spending expectations and prevent you from going over your allotted funds.
How to Calculate Benefits
Calculations will vary based on the benefits you offer. In Romania’s labor laws, you can find guidance for calculating required provisions like maternity leave and social insurance contributions. For example, employers must contribute 35 percent of employee paychecks for social and health insurance. Employees must contribute 6.25 to 10.25 percent depending on their sectors.
How Are Employee Benefits Taxed in Romania?
Benefits in cash and in-kind are generally taxable income in the country. However, there are some exceptions. Nontaxable benefits include:
- Expenses paid for business-related travel
- Reimbursable loans provided without interest or at a low rate
- Contributions to a voluntary pension fund up to 400 Euros a year
- Private health insurance paid by employers up to 400 Euros a year
Company vehicles are also partially tax-exempt. Vehicle-related expenses are 50 percent deductible according to corporate tax legislation.
Employee Health Benefits
The country has a public healthcare system paid for by a portion of social insurance contributions. Employers are not required to provide private health insurance schemes for this reason. However, supplemental insurance is available, and some companies offer it as a fringe benefit.
Romania Competitive Benefits Planning
Growing your enterprise in a new country comes with several tasks, including benefits planning. You’ll need to learn about a new labor market and how you can make your benefits packages appealing to nationals. With a strategic approach to planning, you can support your success abroad with employee benefits in Romania.
Romania Employee Benefits Plans
Creating a competitive benefits plan can make your business stand out from other companies in the labor market. Applicants tend to show more interest in jobs with developed benefits plans. The benefits you offer your employees can also help you improve retention.
Potential perks can include:
- Supplemental insurance or pensions
- Holiday bonuses
- Meal allowances
- Housing stipends
- Travel allowances
- Professional training
- Telecommuting opportunities
Legal Obligations for Benefits
While your supplemental provisions and perks will make your company competitive, you need to consider your legal obligations first. As an employer, you must provide:
- Social security contributions
- Paid public holidays
- Paid annual leave
- Maternity leave
Designing Romania Employee Benefit Plans
As you design your benefits plan, you’ll want to balance your company’s available resources with your employees’ needs. While every country has different laws and expectations, you can follow a few basic steps to create a competitive plan anywhere.
1. Understand Your Company’s Revenue and Goals
Benefit costs can add up, so it’s essential to understand your revenue and how much you’re willing to spend. Consider your other expenses and create a budget. Keep in mind that you can adjust your budget later as your business grows and you have more resources available.
You should also assess your goals in this stage. You may be able to use your benefits plan as a way to achieve them. For example, if you want to build a large team, you can opt for smaller benefits packages and hire more employees. If you want to improve retention, you might scale back on hiring and recruiting and offer more supplemental benefits.
2. Learn About the Market and Employee Expectations
To make your company competitive in the labor market, you need to learn about other companies’ benefits. Research businesses in the area with similar size and industry to yours. When you know what other companies provide for their employees, you’ll have an idea of what workers expect.
You can also learn about employee needs and expectations by talking to workers directly. Distribute surveys or conduct interviews to hear from employees and learn which benefits they’re most interested in.
3. Use the Information You’ve Gathered to Create a Plan
After you’ve conducted some research, you can create a plan that balances your resources with employees’ needs. Start by allocating funds to the required benefits. Once you’ve met the threshold for compliance, you can choose supplemental provisions.
Average Cost of Benefits
Every company offers different benefits at various scales, so an average cost wouldn’t be a fair reflection of what you can expect to spend. Creating a budget for your benefits can help you set spending expectations and prevent you from going over your allotted funds.
How to Calculate Benefits
Calculations will vary based on the benefits you offer. In Romania’s labor laws, you can find guidance for calculating required provisions like maternity leave and social insurance contributions. For example, employers must contribute 35 percent of employee paychecks for social and health insurance. Employees must contribute 6.25 to 10.25 percent depending on their sectors.
How Are Employee Benefits Taxed in Romania?
Benefits in cash and in kind are generally taxable income in the country. However, there are some exceptions. Nontaxable benefits include:
- Expenses paid for business-related travel
- Reimbursable loans provided without interest or at a low rate
- Contributions to a voluntary pension fund up to 400 Euros a year
- Private health insurance paid by employers up to 400 Euros a year
Company vehicles are also partially tax-exempt. Vehicle-related expenses are 50 percent deductible according to corporate tax legislation.
Employee Health Benefits
The country has a public healthcare system paid for by a portion of social insurance contributions. Employers are not required to provide private health insurance schemes for this reason. However, supplemental insurance is available, and some companies offer it as a fringe benefit.
Trust G-P for Employee Benefits Planning in Romania
Our team can help you extend your company’s reach globally. Contact us to learn more.