Payroll and Payroll Taxes in Romania: A Comprehensive Overview

Managing payroll in Romania requires an understanding of its labor laws, tax obligations, and administrative procedures. This article provides a concise guide to payroll service and payroll taxes in Romania, helping businesses comply with local regulations and manage their workforce efficiently.

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Key Components of Payroll in Romania

1. Gross Salary and Minimum Wage
   • The gross salary forms the basis for calculating payroll taxes and contributions.
   • The minimum gross wage in Romania is set annually by the government and varies by sector.
2. Working Hours and Overtime
   • Standard working hours are 8 hours per day or 40 hours per week.
   • Overtime is compensated at 125% of the base hourly rate or via time off.
3. Mandatory Benefits
   • Employees are entitled to benefits like vacation leave, sick leave, maternity/paternity leave, and public holidays.

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Payroll Taxes and Contributions in Romania

1. Employee Contributions

Employees in Romania are subject to the following deductions:

• Social Security Contribution (CAS): 25% of gross salary.
• Health Insurance Contribution (CASS): 10% of gross salary.
• Income Tax: 10% of taxable income (gross salary minus CAS and CASS).

2. Employer Contributions

Employers must pay:

• Work Insurance Contribution: 2.25% of gross salary.
• Additional contributions for specific industries or benefits may apply.

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Payroll Administration in Romania

1. Frequency of Payment
   • Salaries are typically paid monthly, with payment dates agreed upon in the employment contract.
2. Payroll Reporting
   • Employers must report employee salaries, deductions, and taxes to the Romanian tax authorities.
   • Submissions are made through the REVISAL system for labor contracts and monthly tax filings.
3. Currency
   • All payroll transactions must be conducted in Romanian Leu (RON).

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Compliance and Challenges

1. Labor Law Compliance
   • Adhering to Romania’s labor laws is crucial, particularly regarding contracts, benefits, and working hours.
2. Penalties for Non-Compliance
   • Late or incorrect tax payments can result in fines and interest penalties.
3. GDPR Compliance
   • Payroll data must be handled securely to comply with GDPR regulations.

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