An employer of record in Romania is a local entity that legally employs a worker on your behalf, runs Romanian payroll, withholds the heavy employee-side contributions the law requires, and carries the employer obligations in Law no. 53/2003, the Labour Code. The buyer directs the person's day-to-day work; the EOR holds the employment contract and answers for dismissal procedure, which in Romania is formal enough that a defective termination decision is void. For a company with one or two Romanian hires and no entity, that procedural risk is most of what the fee buys.
What an EOR does in Romania
A Romanian EOR signs the employment contract as the legal employer, runs monthly payroll, withholds the employee's social insurance and health contributions at source and remits its own employer contributions, then invoices the buyer for total cost plus a fee. Because Romanian dismissal law is procedural, the EOR also carries the part that most often goes wrong: a written termination decision must state the legal and factual grounds, the applicable notice period, any alternative positions and where the employee can challenge it, and a dismissal issued without the required advance notice is null and void. An EOR that operates in Romania at scale has these templates and timelines built, which is precisely what a foreign buyer without local counsel lacks.
Notice, dismissal grounds and severance
The statutory minimum notice for dismissal is 20 working days, and it applies to dismissal for physical or mental incapacity, professional inadequacy and redundancy, whether individual or collective. Disciplinary dismissal requires no notice, and notice requirements also fall away for professional inadequacy during probation. Notice is suspended while the employment contract itself is suspended, for example on medical leave. There is no statutory minimum severance payment in Romania; anything beyond notice comes from the individual contract, a collective agreement or company policy, so a buyer should ask the EOR what its standard contract actually promises before the first hire, not at the first exit.
What a Romanian payslip costs the employer
Romania puts most social charges on the employee side of the payslip: the employee's social insurance contribution is 25% and the health insurance contribution is 10%, both withheld from gross salary. The employer's own on-cost is comparatively small: a work insurance contribution of 2.25% of gross, with an additional employer social insurance contribution of 4% or 8% only for jobs classed as uncommon or special working conditions, which office roles are not. The practical effect is a wide gap between gross salary and net pay, so quote offers to Romanian candidates in gross and let the EOR show the net; a buyer who negotiates in net terms will misjudge the total cost.
Entity or EOR in Romania
The employer on-cost in Romania is low, so the running cost of direct employment is not the barrier; the barrier is the formality of hiring and firing and the ongoing filings, all conducted in Romanian. An EOR makes sense while headcount is small and the buyer wants speed and a compliant exit path priced in. Once a Romanian team grows into the tens, the per-employee fee stacks up against a modest fixed cost of running an SRL with a local accountant, and the buyer is usually better off with its own entity. Policy and contract documents control in every case; nothing on this page is legal or tax advice.
Questions people ask about employer of record romania
What notice does a dismissal in Romania require?
A statutory minimum of 20 working days for dismissal on grounds of incapacity, professional inadequacy or redundancy. Disciplinary dismissals require no notice. The notice must be reflected in a written termination decision or the dismissal is void.
Is there statutory severance pay in Romania?
No. Romanian law sets no minimum or maximum severance; any payment beyond the notice period comes from the employment contract, a collective agreement or the employer's own policy.
Who pays social contributions on a Romanian salary?
Mostly the employee, by withholding: 25% social insurance and 10% health insurance come out of gross pay. The employer adds a 2.25% work insurance contribution, with higher employer social insurance only for special working conditions.
Does using an EOR change these rules?
No. The EOR is the legal employer and is bound by the Labour Code exactly as any Romanian employer is. What changes is who carries the procedural burden and the liability for getting it wrong.