How does Romania payroll tax work in 2026?
Romania flips the standard model. The employee pays 35% in social contributions on their gross salary. The employer pays just 2.25% in work insurance. Income tax is a flat 10% on all employment income. That combination makes Romania one of the lowest employer on-cost markets in the EU, but the employee take-home is significantly reduced by the contributions stack.
· Romania guide
Illustration · Bucharest, Romania
Romania employer payroll cost in 2026 is low by EU standards. The employer pays 2.25% CAM (work insurance) on gross salary. There is no employer CAS or CASS for standard employment.
The employee pays 35% in total social contributions. This splits into 25% pension (CAS) and 10% health insurance (CASS). Both apply to the full gross salary with no ceiling.
Income tax is a flat 10% on all employment income after social contributions. There are no progressive brackets for wages. The employer withholds and pays all contributions and income tax monthly, by the 25th of the following month.
What does an employer pay in Romania social contributions?
The employer pays 2.25% CAM (Contributia Asiguratorie pentru Munca) on the gross salary of each employee. That is the only mandatory employer social contribution for standard working conditions.
Romania does not require the employer to pay CAS (pension) or CASS (health insurance) for standard employment. Those contributions fall entirely on the employee. This makes the Romanian employer contribution stack one of the lowest in the EU.
| Contribution | Paid by | Rate | Notes |
|---|---|---|---|
| CAM (work insurance) | Employer | 2.25% | Applies to all gross salary. Standard working conditions. |
| CAS (pension) | Employer | 4% (uncommon) / 8% (special) | Only where working conditions are classified as uncommon or special. Not applicable to normal office or tech roles. |
Working condition classifications
For most employers in technology, professional services, and office-based roles, the 2.25% CAM is the entire employer social cost. The higher employer CAS rates of 4% and 8% apply only to formally classified uncommon or special working conditions, such as certain industrial or hazardous environments. Classification is set by labour inspectorate rules, not by the employer. Most knowledge-economy employers in Romania will never pay more than 2.25%.
Employer CAM rate of 2.25% confirmed for 2026 under the Fiscal Code Romania. Employee CAS 25% and CASS 10% are withheld from gross by the employer and remitted to the state budget.
What does an employee pay in Romania social contributions?
The employee pays 35% in total social contributions on their gross salary. This is deducted before income tax.
The 35% splits into 25% CAS (pension) and 10% CASS (health insurance). Both apply to the entire gross salary. There is no ceiling on CASS for employment income.
| Contribution | Rate | Base | Notes |
|---|---|---|---|
| CAS (pension, Pillar I + II) | 25% | Gross salary | 6 percentage points redirected to mandatory private pension (Pillar II) |
| CASS (health insurance) | 10% | Gross salary | No ceiling for employment income |
| Total employee contributions | 35% | Gross salary | Withheld by employer before income tax is calculated |
Pillar II private pension
Of the 25% CAS, 6 percentage points flow into a mandatory private pension account (Pillar II). The employee selects a private pension fund from an approved list. The remaining CAS goes to the state pension fund (Pillar I). The Pillar II redirect happens automatically through payroll. The employee does not need to take any action beyond choosing a fund, which is done at the point of employment registration.
Effect on take-home pay
A gross salary of lei 4,050/month means 35% in social contributions is withheld first. Income tax at 10% is then applied to the remaining taxable base. The combined effect means the employee take-home from minimum wage is considerably below the gross figure. When quoting salaries in Romania, always clarify whether the figure is gross or net.
Romania income tax for 2026
Romania applies a flat 10% personal income tax on all employment income. There are no progressive brackets for wages.
The flat rate applies after social contributions are deducted from gross salary. There is no personal allowance for standard employment income under the current rules.
| Income type | Rate | Notes |
|---|---|---|
| Employment income (salaries) | 10% | Flat rate. Applied to gross salary minus social contributions. |
| Dividends (from 2026) | 16% | Rate raised in 2026 reform. Not employment income. |
| Capital gains (from 2026) | 16% | Rate raised in 2026 reform. Not employment income. |
How income tax is calculated on a payslip
The employer calculates income tax on the net taxable salary, which is the gross salary minus the 35% social contributions. The 10% flat rate is then applied to that reduced figure. The employer withholds the tax and pays it to ANAF (the National Agency for Fiscal Administration) by the 25th of the following month.
Construction sector tax exemption
Employees in the construction sector working for eligible employers benefit from an income tax exemption on their employment income. This applies where the employer is engaged in construction activities as defined by the Fiscal Code. The construction minimum wage is lei 4,582/month throughout 2026, higher than the general minimum. Construction sector payroll requires specialist handling and differs meaningfully from standard employment.
2026 reform: dividends and capital gains
The 2026 fiscal reform raised the tax rate on dividends and capital gains to 16%. Employment income was not changed. The flat 10% rate on salaries remains unchanged. However, employer-shareholders who have historically mixed salary and dividend income need to review their structure, as the dividend advantage narrowed significantly in 2026.
How does Romania payroll filing work?
Employers in Romania must run payroll monthly. The law requires salary payments on or before the last working day of each calendar month.
Employers must declare and pay all withheld income tax and social contributions to ANAF and the relevant state funds by the 25th of the following month. There is no real-time filing system like UK RTI. The monthly declaration covers all employees paid in that period.
Employers file a single consolidated monthly declaration (D112) covering social contributions and income tax for all employees. The D112 must be submitted electronically to ANAF. Payment of the withheld amounts must reach the state accounts by the same 25th-of-the-month deadline.
Key Romanian payroll filings
| Filing | Deadline | What it covers |
|---|---|---|
| D112 (Payroll declaration) | 25th of the following month | CAS, CASS, CAM, and income tax for all employees in the month |
| Annual income statement (employee) | Issued by employer each year | Full-year gross, contributions, and tax withheld; used by employee for any personal tax return |
Late payment of the D112 liability incurs penalties and interest under the Fiscal Procedure Code. Errors in the declaration can be corrected by filing a rectifying D112. Unlike UK RTI, there is no per-submission penalty regime based on employer size. Penalties are calculated on the outstanding tax amount.
Employer registration obligations
Before the first hire, a Romanian employer must register as an employer with ANAF and with the territorial labour inspectorate (ITM). Each new employment contract must be registered in REVISAL (the national employee register) before the employee starts work. REVISAL registration is separate from the monthly D112 payroll declaration.
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Collect pay data
Gather salary, hours, bonuses, and any taxable benefits for the month before the payroll run closes. Confirm any sick days or special absences that affect the calculation base.
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Calculate gross pay
Total all earnings for the month. The gross figure is the starting point for all contribution and tax calculations.
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Deduct employee social contributions
Withhold the employee CAS and CASS contributions from gross salary. These reduce the taxable income base before income tax is applied.
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Calculate and withhold income tax
Apply the flat income tax rate to the taxable base after social contributions. Withhold the resulting income tax amount from the employee net pay.
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Calculate employer CAM contribution
Calculate the employer work insurance contribution on the gross salary. This is the employer's only mandatory social cost for standard employment conditions.
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Submit D112 and pay liabilities
File the monthly D112 declaration electronically with ANAF and transfer all withheld contributions and income tax to the relevant state accounts by the 25th of the following month.
Pension contributions in the Romanian payroll stack
Romania does not have a UK-style auto-enrolment pension with separate employer contributions. Pension is funded through the 25% CAS contribution paid by the employee.
Of that 25%, 6 percentage points go to the mandatory private pension (Pillar II). The rest goes to the state pension fund (Pillar I). The employer does not pay an additional pension contribution on top of the 2.25% CAM.
Three-pillar structure
| Pillar | Type | Who funds it | Notes |
|---|---|---|---|
| Pillar I | State pension (pay-as-you-go) | Employee CAS (part of 25%) | 19 percentage points of CAS go to Pillar I |
| Pillar II | Mandatory private pension | Employee CAS (6 percentage points redirected) | Employee chooses a private pension fund from an approved list |
| Pillar III | Voluntary private pension | Employee, optional | Tax-deductible contributions up to a defined annual limit |
Sick pay in the payroll stack
Romanian employers pay sick leave for the first days of an illness. For the period from 1 February 2026 to 31 December 2027, the employer pays days 2 through 5 of sick leave (day 1 is unpaid). The state health insurance fund (CNAS) takes over from day 6 onwards. The sick pay indemnity rate is tiered: 55% for up to 7 days, 65% for 8 to 14 days, and 75% from day 15. All rates are calculated on the employee average gross income over the preceding 6 months.
Maternity and parental leave in the payroll stack
Maternity leave runs for 126 days and is paid at 85% of average gross income, funded by the national health insurance fund (FUNASS). Parental leave can be taken by either parent for up to 24 months. The parental leave indemnity is paid at 85% of average income over the last 12 months, capped at a statutory monthly maximum, and is also state-funded. Employers do not pay these benefits directly. The employee claims them through the health insurance fund.
How does Teamed handle Romania payroll for you?
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Key sources: PwC Tax Summaries: Romania, L&E Global Romania employment overview, and Accace Romania labour law guide.
Frequently asked questions
What social contributions does a Romanian employer pay in 2026?
For standard employment conditions, the employer pays 2.25% CAM (work insurance contribution) on the employee gross salary. This is the only mandatory employer social charge. The employer does not separately pay CAS (pension) or CASS (health insurance) for normal employment. Higher employer CAS rates of 4% or 8% apply only to formally classified uncommon or special working conditions such as certain hazardous industrial roles.
What social contributions does a Romanian employee pay?
The employee pays 35% in total social contributions, deducted from gross salary before income tax. This is 25% CAS (pension) plus 10% CASS (health insurance). Of the 25% CAS, 6 percentage points are redirected to a mandatory private pension (Pillar II) and the remainder goes to the state pension fund (Pillar I). There is no earnings ceiling on either contribution for employment income.
What is the income tax rate in Romania in 2026?
Romania applies a flat 10% personal income tax on all employment income. There are no progressive brackets for wages. The rate applies to gross salary after the 35% social contributions are deducted. A 2026 fiscal reform raised the rate on dividends and capital gains to 16%, but employment income remains at 10%.
When must Romanian payroll be declared and paid?
Employers must pay employees monthly, on or before the last working day of each calendar month. All withheld income tax and social contributions must be declared via the D112 form and paid to ANAF by the 25th of the following month. Both the declaration and the payment must meet that deadline. Late payment attracts penalties and interest under the Fiscal Procedure Code.
What is the minimum wage in Romania in 2026?
The general gross minimum monthly wage is lei 4,050/month from January 2026 and rises to lei 4,325/month from 1 July 2026. The construction sector minimum is lei 4,582/month throughout 2026. Employers cannot apply the general minimum wage rate continuously for more than 24 consecutive months without a salary review.
The most common Romania payroll mistake for foreign employers is quoting salaries without clarifying gross versus net. The employee sees a gross offer and expects their take-home to be close to it. With a total employee contribution rate of 35% plus the flat income tax, the net is substantially lower than the gross. Always show both figures before the offer is signed.
Romania asks the employee to carry 35% in social contributions on their gross salary. The employer adds just 2.25% CAM. That split is the defining feature of Romanian employment cost.
Add the flat 10% income tax and structure the offer gross and net before it goes out.
Run the numbers first. Then make the hire.
