Employer of Record Service in Romania

Absolutely! Employer of Record is your legal gateway to hiring software developers without the complexities of opening a legal entity abroad. Your EOR partner serves as the legal employer of programmers on your behalf, taking care of all the admin functions, like payroll, HR, legal, and benefits management. They also assume full liability for adhering to local labor laws, employment rules, and tax obligations, bearing any potential legal risks.

But make no mistake – you remain the one and only real employer of software engineers. From day one, you manage your team directly and integrate it into your culture and practices. All the bureaucracy? Gone. Legal risks and admin burdens? Off your shoulders. Instead, you focus on what matters the most – developing your software product.

So, an EOR service in Romania is simply a means for tech companies to swiftly expand into new markets and hire a development team compliantly. Exactly what tech companies like BigCommerce, People.ai, Dotmatics, and Sift did. With the help of Alcor, an EOR provider for tech, they have seamlessly and securely built fully backed teams of 30+ developers and fast-tracked their product growth.

There are two prevalent models for hiring Romanian developers: employment agreement (Contract de Muncă) and B2B contract (Contract Civil).

An employment agreement forms an employer-employee relationship governed by the Romanian Labor Code. For employers, this type of employment comes with tax obligations, including paying payroll taxes and social security contributions (SSC), as well as withholding income tax and SSC on behalf of the employee. Additionally, it is full of rigorous working terms and employee termination procedures. That’s where Alcor’s IT EOR in Romania can serve as your lifeline in the deep employment waters.

For employees, an employment contract serves as a safety net, securing their salary amount, benefits, working hours, paid time off (PTO), and termination terms. The downside? Their salary is paid in a local currency, which may be affected by inflation.

A B2B contract is signed between a hiring tech company and a software developer, establishing a contractor-client relationship under the Civil Code and Fiscal Code. The programmer must register as a sole trader to provide IT services.

Unlike an employment agreement, in B2B relations, the employer is free from tax obligations, while the contractors handle taxes and social contributions on their own or via an EOR vendor in Romania. The reward is paid in a foreign currency, so inflation and exchange rate swings are not an issue. However, benefits, PTO, and working terms are typically negotiated individually and are usually more restrictive than those outlined in the employment contract.

*0% – rate for normal working conditions; 4% – rate for hard working conditions; 8% – rate for special working conditions.

Now, the employee’s share:

1. Personal income tax constitutes a flat 10% of the employee’s gross income.
2. Social Security contributions on the employee’s side total approximately 35%, including:

• Pension insurance contribution: 25%
• Health insurance contribution: 10%

The employer is responsible for calculating all taxes and deductions and paying them by the 25th of the month following the one in which they are due. An Employer of Record company in Romania, like Alcor, can take care of the taxes for you, so you wouldn’t have to worry about miscalculations or missed deadlines.

The second employment model is the B2B contract, which enables tech companies to hire Romanian software engineers as contractors. In this case, paying payroll taxes is not mandatory for the company. Developers, on their part, are responsible for covering:

1. Personal income tax depends on the type of registration: SRL (Societate cu Răspundere Limitată) or PFA (Persoană Fizică Autorizată).

The SRL is a Limited Liability Company, meaning a developer acts as a firm providing IT services to a tech company. In this case, the developer pays either a 16% income tax on net income or a 1% micro-company tax if eligibility criteria are met.

The PFA is an Authorized Physical Person (sole trader), meaning a developer provides IT services directly as an individual. In this case, the developer pays a flat 10% income tax.

1. Social Security contributions depend on annual income relative to the Romanian minimum gross salary (RON 4,050/~$920 per month from January 2026; RON 4,325/~$980 per month from July 2026):

Pension insurance contribution (25%):

• Annual income below 12 minimum salaries (~$11,030/year): no mandatory contribution
• Annual income between 12–24 minimum salaries (~$11,030–$22,060/year): 25% applied to a fixed base of 12 minimum salaries = ~$2,758/year
• Annual income above 24 minimum salaries (~$22,060/year): 25% applied to a fixed base of 24 minimum salaries = ~$5,515/year

Health insurance contribution (10%):

• Annual income below 6 minimum salaries (~$5,500/year): no mandatory contribution

Annual income at or above 6 minimum salaries: 10% applies; contribution base is capped at 72 minimum salaries (~$66,160/year)

Romania is a goldmine of skilled software engineers, offering a competitive advantage without the Silicon Valley price tag. The average senior developer remuneration here amounts to about $6,690 per month, with the most in-demand tech talents, such as MLOps Engineers, Data Engineers, and DevOps Engineers, earning between $6,200 and $8,300.

Even the highest-paid tech experts don’t break the bank in Poland. For instance, a senior AI Product Engineer gets about $8,100 per month.

See for yourself the economy in 51% vs the US:

So, how much should you really budget to hire a software developer in Romania? To break down the total cost beyond just salary, you need to include:

• annual income of a software engineer,
• taxes, social contributions, and additional payments presupposed by the local labor laws,
• employee benefits package, which typically includes health insurance, professional training, hardware, and corporate merchandise, totaling about $6,350 in Romania and $15,400 in the US per developer/year,
• recruitment fee, which is typically 20% in Romania and 30% in the US of the senior developer’s gross annual salary.
• EOR service fee, which covers payroll processing, tax filings, compliance management, and employment contracts on your behalf. The industry average in 2026 is $400-$700 per employee per month on a flat-fee model, with percentage-based models typically running 10%-25% of gross salary. It all depends on the provider.

Alcor’s pricing model works differently: rather than a fixed per-head fee, Alcor offers volume-based discounts as your team grows – meaning the more engineers you hire, the lower your per-employee cost becomes. This makes Alcor particularly cost-effective for companies scaling to teams of 10, 20, or 30+ developers, where standard EOR providers charge the same flat rate regardless of headcount.

Contact Alcor, your EOR service provider in Romania, to get precise payroll calculations for your tech positions and discover your true savings.

When hiring software engineers in Romania, as an employer, you must comply with the statutory employee benefits outlined in the Romanian Labor Code. They are mandatory for tech specialists working on the employment contract. Failure to provide these benefits may lead to legal troubles, penalties, and fines.

So, what are these statutory employee benefits?

• Social security contributions, including health, disability, unemployment insurance, pension contributions, and others.
• Annual vacation consists of paid days off, which may increase due to seniority or special conditions.
• Leaves, including sick, maternal, paternal, and parental.
• National holidays, including Christmas Day, New Year’s Day, and Independence Day, are all set out in the Romanian Labor Code.
• Termination protection includes a notice period and just cause.

There are also supplementary employee benefits, which are optional but good to have if you want to attract top software engineers in Romania, like:

• Private medical insurance is a common addition to basic medical coverage, typically covering diagnostics, vision and dental care, emergencies, mental health services, etc.
• Tech courses & English classes to promote professional development;
• Gym membership is offered as a subsidized benefit or fully paid by the employer.
• WFH setup & Internet allowance, relevant for international dev teams working remotely;
• Stock options are predominantly offered to C-level experts.

According to Romania’s Labor Code, the standard workweek in the country clocks in at 40 hours, with the possibility of overtime, which shouldn’t exceed 8 hours per week. The overtime compensation is generous – 175% of the base salary in regular hours and 200% on national holidays.

When you hire a software developer in Romania, their probation period is 90 days for standard roles and 120 days for managerial positions. Usually, this time is enough to test the skills and assess the performance of the new hire. We at Alcor guarantee only high-quality tech talent, with 98.6% of our hires passing probation with flying colors. In the rare case that someone doesn’t meet your expectations, we provide a replacement free of charge.

Software developers working on an employment contract in Romania are entitled to the following paid time off (PTO):

Annual leave consists of 20 working days regardless of the employee’s years of working experience. It can only be compensated with money upon contract termination.

Sick leave: day 1 is unpaid. Days 2-6 are paid by the employer; from day 7 to day 183, costs are covered by health insurance – with the period extendable by an additional 90 days. The compensation rate depends on the duration of the leave: 55% for up to 7 days, 65% for 8-14 days, and 75% for 15 or more days. Higher rates of up to 100% apply in special cases, such as oncological illness or a work accident.

Maternity leave lasts for 126 calendar days, of which 63 days must be taken before childbirth and the other 63 after.

Extraordinary paid leave includes

• Paternity leave: 10 working days; can be extended by an additional 5 days under the childcare course;
• Marriage leave: 5 days;
• Blood Donation Leave: 1 day;
• Bereavement Leave: 3 days.

paid by the employer;

• Parental leave: available for both parents – 2 years (3 years in case of a child’s disability);
• Maternal risk leave: up to 120 days before and after maternity leave (in special cases);
• Adoption leave: 1 year;
• Care leave: 45 days for taking care of a sick child up to 7 y.o.

paid by the National Health Insurance House.

Public holidays in Romania include 17 paid days, as per the annual leave entitlements for the year 2026.

When a US-based tech company hires software developers in Romania, it should consider visa requirements. To travel on a business trip to the United States, a Romanian programmer should obtain a B1/B2 visa, which permits a stay of up to 6 months. It allows business-related activities, such as attending conferences and meetings, participating in short-term training or team-building, and exploring partnerships, but not permanent work in the United States.

To get it, a Romanian citizen should

• Complete Form DS-160
• Pay the application fee of $185
• Schedule and pass the interview at the nearest US embassy/consulate
• Prepare the necessary documents, including a valid passport, proof of corporate ties, and financial documentation (such as bank statements and a sponsor letter).

As of 2026, interview scheduling in Romania takes approximately 1 month, so factoring in lead time when planning business travel is advisable.

But no need to stress over these visa challenges. Alcor, your Employer of Record service provider in Romania, can seamlessly handle all aspects of visas for your software engineers, just like we did for US tech company ThredUP.

The termination of an employee in Romania is governed by the labor code, which establishes strict guidelines for the termination process, thereby protecting workers’ rights and posing risks for employers. Luckily, there are EOR companies in Romanialike Alcor that serve as your compliance buffer, ensuring a smooth employee offboarding process.

General termination rules:

Notice Period is 20 working days. No prior notice is required for disciplinary terminations or if the employee is under arrest for over 30 days.

Local requirements: Employment is typically concluded for an unlimited period and can only be terminated through specific procedures. Dismissal may be for cause (medical issues, professional unfitness, disciplinary reasons) or without cause (redundancy, collective layoff).

Termination payments:

• Compensation for all unused paid vacation days accrued, bonuses, or other benefits owed.
• Severance payments are not mandatory, except in cases of medical unfitness, then they are paid as per the employment contract or collective agreement.

Pregnant employees, those on maternity, paternity, or childcare leave, employees using the insertion incentive, on annual leave or medical leave, and union leaders are protected from termination.

Expanding your development team abroad often means establishing a local legal entity, which varies from country to country based on the local laws of business incorporation. Generally, you would need to navigate complex legal requirements, including selecting the type of entity, registering with relevant authorities, opening bank accounts, and ensuring compliance with local tax and social security laws.

The business incorporation process can drag on for months, draining tens of thousands of dollars in legal fees, registration, and insurance. What is even worse, failing to comply with local laws and practices can expose your tech company to hefty fines or even legal actions, putting your expansion plans at risk.

The EOR solution in Romania allows you to bypass the lengthy and expensive route of setting up your own entity abroad. For instance, with Alcor EOR for tech, you can hire developers through our readily established legal entities in LATAM or Eastern Europe, saving an average of 3.5 months on business incorporation. Plus, manage admin and legal complexities hassle-free. It’s a faster, safer way to expand your business compliantly without the financial burden.

Alcor’s Employer of Record for Tech is a 360-degree solution devised for the compliant and seamless hiring of software engineers in Latin America and Eastern Europe. With no need to open a legal entity, it saves tech companies an average of 3.5 months and tens of thousands of dollars in setup costs. This means you can skip the red tape and build your own team of 30+ developers in just three months, accelerating your software development and unlocking faster growth.

With our Employer of Record solution in geo, you get more than just HR & payroll:

• Tech-focused services: from FTE or B2B employment options and tax incentives to R&D deductions and tailored benefits for developers.
• 100% compliance: get shielded with guidance from our lawyers, who have expertise in IT law.
• Customized pricing: volume discounts, no hidden costs or pre-payment.
• Ongoing in-country support: our Dedicated Customer Success Managers go above and beyond to simplify your business expansion.
• All-in-one place: manage everything in one place, no need for multiple vendors.

But EOR is just the beginning…

You can upgrade it to our software R&D center solution, which includes:

• In-house tech hiring is handled by our 40 recruiters, who headhunt the top 10% of the market developers across LATAM and EE. With our 80% CV pass rate and 2-6 weeks to fill a vacancy, you can scale your team from 0 to 100 engineers in a year.
• Operational support encompasses additional services, including leasing office or co-working space, procuring equipment, setting up IT infrastructure, and employer branding.

The result? A fully backed tech R&D center with a software development team that’s 100% yours from day one.