As a member of the European Union (EU) with a growing economy, Romania is an excellent location for a company to expand its operations to Europe. While the country’s incorporation process is relatively straightforward, you’ll still need to handle hiring employees, setting up payroll, and doling out compensation and benefits.
G-P can help. Our Employer of Record service is a unique solution that allows us to use our established PEO to run your business. We’ll hire employees on your behalf, add them to our compliant payroll, and manage all risk so that you don’t have to.
Taxation Rules in Romania
In Romania mandatory social security contributions on salaries are cumulated at 47.25% as follows:
- 25% social security contribution (CAS), borne by the employee.
- 10% social health insurance (CASS), borne by the employee.
- 10% tax on income from wages, borne by the employee.
- The employer pays 2.25% of the contribution to Romania’s work insurance (CAM).
Romania Payroll Options for Companies
Companies have four main options for setting up their Romania payroll. Since every business is different, it’s best to carefully consider each possibility to determine which is best for your company or industry. These include:
- Internal: Larger companies with a commitment to Romania may run their payroll out of their subsidiary by hiring additional staff members to handle HR and payroll needs. This option is the most expensive and time-consuming.
- Remote: If you handle payroll at your parent company, you can add your Romanian employees to this existing internal payroll. However, keep in mind employment compliance laws will differ between the two groups.
- Romania payroll processing company: You can also outsource your payroll to a local Romania payroll processing company. You will still be held liable for any mistakes.
- G-P: The surest way to run your Romania payroll and stay compliant is through G-P. Our Romania payroll outsourcing services will get you started faster and ensure you do not have to worry about compliance.
How to Set Up a Payroll in Romania
Before you set up your Romania payroll, you will have to incorporate your subsidiary. To do this, you’ll need registered capital, management, registered offices, assets, a Romania bank account, and the names of directors and shareholders. All businesses must register with the country’s National Office of the Trade Register and the Labor Chamber.
Alternatively, you can choose a subsidiary alternative like G-P, which allows you to skip this lengthy process.
A probationary period of not more than 90 calendar days for executive positions and not more than 120 calendar days for managerial positions may be established at the conclusion of the individual employment contract. As an employer, you’ll need to provide at least 20 working days of notice in case of a termination. However, these terms could differ if the employee is still in their probationary period.
Payroll Processing Company in Romania
If you need a Romania payroll processing company, choose G-P. Contact us today for more information on our Romania payroll outsourcing services.