How to pay international contractors in Romania [2025]

Before onboarding independent contractors from Romania and expanding your global team, it’s crucial to understand Romanian labor laws for self-employed workers to pay them on time and prevent worker misclassification. 

The Fiscal Code sets strict regulations in this European country defining independent contractors and their activities. On top of that, only 29% of Romanians speak fluent English, so it’s important to have bilingual talent in your workforce.

Learn how to correctly classify independent contractors, manage them, and comply with Romania's employment laws in our step-by-step guide.

Step #1: Classify your workers in Romania

Misclassifying Romanian workers comes with serious consequences, including fines, back taxes, and other harsh penalties according to the Romanian Labor Code. 

In Romania, an independent contractor provides paid services to a company but does not comply with its internal rules and operates their own registered business. An employer must offer a civil contract for the provision of services and a collaboration contract to solidify the freelance agreement. 

To be classified as a contractor, workers must meet at least four of the seven independent activities defined by the Fiscal Code. These include:

• The freedom of where and how they do their work

• Use of their own resources

• The ability to work for more than one client/company at a time

• Use of their own intellectual or physical skills

• Assumption of all risks involved in the work

• Belonging to a professional organization that oversees and advocates for a particular profession

• The ability to engage in work by either hiring individuals or partnering with outside parties

If an employer misclassifies a worker and fails to provide the employment contract before the start of work, they may be fined RON 10,000 per Romanian employment law.

In the chart below, you'll find some of the characteristics that help differentiate Romanian contractors from employees.

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Step #2: Determine the best way to pay your contractors in Romania

When expanding your global team to include Romanian contractors, it's essential to carefully consider payment methods to ensure your international contractors get paid on time. Here are some options:

• Bank wires. Many local banks require you to be physically present in the country to open an account. But, you can send a global wire transfer from your bank to pay a Romanian contractor.

• International money orders. Employers must physically purchase money orders, and contractors must physically pick up and deposit them—which can be costly due to fees and bad exchange rates.

• Digital wallets or payment platforms. Employers often use Wise and PayPal to transfer money across borders. However, exchange rates fluctuate daily which can make it challenging to forecast your budget.

• Global payroll services. Usually, contractors need to invoice individually as they aren't included in the regular pay runs at most companies. With Rippling, you can pay contractors alongside the rest of your global workforce. 

If your company is US-based and you paid a foreign contractor for work, you may need to submit forms 1096 and W-8 BEN to the IRS as proof.

Step #3: Use global payroll software to process payments for Romanian contractors 

Skip time-consuming, manual payment processes. One of the simplest and fastest ways to pay contractors in Romania is through global payroll software. Pay contractors compliantly worldwide with Rippling's global payroll system. Here's how:

Step #4: Ensure your Romanian contractor has the right tax information 

Employers aren't required to withhold and pay income taxes for contractors in Romania.

A contractor in Romania must register as a sole proprietor with the National Trade Register Office (ONRC) and apply for value-added tax (VAT) registration within 10 days of receiving their first income from work. 

Romania has a flat rate tax of 10%, regardless of income earned. If you earn more than RON 36,000 per year, you must contribute 25% to social security and 10% to health insurance. Additionally, most goods, services, and sales are subject to a 19% VAT. Contractors must file annual tax returns and tax bills by May 25 each year.

Effortlessly manage contractors around the world

Expanding your global workforce has never been easier. With Rippling, you can pay international contractors in Romania and around the world in one system.

Frequently asked questions about running payroll for contractors in Romania