Spotlight on Romania – A guide to implementing employee benefits technology

Romania’s technology and professional services sectors face growing challenges in attracting and retaining younger talent. Competing with large tech firms and outsourcing giants, companies are raising the bar with competitive benefits packages designed to appeal to this demographic.

To thrive in this competitive landscape, businesses are focusing on flexibility, innovation, and personalised benefits that meet the expectations of a dynamic workforce.

This spotlight delves into Romania’s employee benefits landscape, covering mandatory provisions, popular perks, and emerging trends shaping the market.

Mandatory benefits

Romania has a well-structured system of mandatory employee benefits, designed to provide comprehensive social security and healthcare coverage.

Pensions

Romania’s retirement system is structured as part of a two-pillar system:

• Pillar 1: Public Pension System – Employees contribute 25% of their gross salary to the state pension system. Employers contribute 4% for special working conditions and 8% for extraordinary working conditions.
• Pillar 2: Mandatory Private Pension Funds – Employees under 35 are automatically enrolled, with 4.75% of their 25% contribution directed to private pension funds.

Individuals can access pension income starting at age 60, provided they have contributed for at least 15 years.

Healthcare

Healthcare benefits are covered by the National Health Insurance Fund (NHIH). Employees contribute 10% of their gross salary, while employers pay 2.25% toward employment insurance, with 30% of this amount directed to the health insurance fund.

Insurance

Accident and unemployment insurance are also mandatory. Employers contribute 2.25% of gross salaries to employment insurance, which includes accident and sickness benefits to support employees during unforeseen events.

Core benefits in Romania 

Beyond the mandatory benefits provided, many companies in Romania offer a small number of core benefits to enhance employee wellbeing and satisfaction.

Health insurance

Private health insurance is a popular benefit among employers, with 85% of international companies providing it. These plans often cover services excluded from the public healthcare system, such as dental care, private hospital access, and specialist consultations.

Employees can upgrade their coverage at their own additional cost, receiving higher reimbursements or access to additional services, like specific medical facilities or dental cover. Coverage for dependants is also common, often funded through a mix of employer and employee contributions. Flexible benefits funds allow employees without dependants to allocate their allowance toward alternative benefits, including leisure activities or wellbeing initiatives.

Wellness programmes, mental health support, and gym memberships are increasingly forming part of health insurance packages.

Medical insurance

Employers can offer medical insurance as a tax-free benefit up to the limit of €400 per year, per person, which is also tax-exempt for employees within the same limit.

When medical insurance is not provided, companies may provide direct subscriptions to private clinics. These focus on prevention services, but usually exclude hospital stays or surgical procedures. In contrast, medical insurance offers broader coverage, including complex investigations, hospitalisation, and maternity care. It also allows access to any medical facility in Romania, with options for direct settlement or reimbursement for out-of-network services.

Life and disability insurance 

Life insurance is another standard benefit, with most employers providing coverage equal to two to three times the employee’s annual salary. Personal accident insurance and disability insurance ensure financial protection in case of long-term incapacity, offering peace of mind to employees and their families.

Other benefits

Supplementary retirement plans 

Voluntary pensions (Pillar III) offer an attractive way for employers to promote long-term retention. Many companies contribute to these schemes, either fully or partially matching employee contributions, to encourage participation.

Employees can contribute up to 15% of their gross monthly income, with contributions exempt of taxes up to €400 per year (~RON 160/month). Employees have the freedom to select their pension provider or fund, although this can be administratively challenging. Platforms like OneHub simplify the process by streamlining fund selection and contributions, reducing the admin burden for both employers and employees.

Meal vouchers

Subsidised lunches or meal vouchers are a popular benefit for most employers in Romania. These vouches are distributed based on the number of days an employee works, making accurate tracking essential.

OneHub streamlines this process by allowing employees to report their worked days and automatically generate a report that aligns with HR records. Electronic meal vouchers comply with Romania’s Tax Code, exempting them from employer and employee contributions, with only a 10% income tax applied.

Many companies incorporate meal vouchers into flexible benefits funds, giving employees the freedom to allocate their allowance as they see fit.

Transport and commuting allowances 

Public transportation subsidies, fuel allowances, and parking benefits are commonly offered to support employees’ commuting needs, while senior employees or sales representatives often receive company cars.

Family and childcare benefits 

Childcare allowances are increasing in popularity, but remain less widespread. When offered, they are often included in a flexible benefits allowance, allowing employees to allocate funds for daycare and other childcare expenses.

Wellbeing allowances and gym memberships

Wellbeing is a growing focus for Romanian employers. Over half of companies now offer gym memberships or wellbeing allowances, which employees can use on health-focused activities.

Key considerations for implementing employee benefits in Romania 

With the retention of younger employees becoming a challenge, wellbeing benefits, leisure allowances, holiday buy schemes and shopping portals are increasingly popular. These are often funded through a flexible benefits programme.

1. Flexible benefits funds. Employers in Romania are increasingly offering flexible benefits funds to provide employees with greater control over their benefits. These funds allow employees to allocate resources toward core benefits and popular perks like shopping portals.

2. Discount portals. Discount portals are becoming very popular, offering employees access to exclusive deals on everyday purchases. Many companies integrate these portals into their flexible benefits programmes.

3. Supplemental pensions. Supplemental pensions are also on the rise, with employers encouraging voluntary contributions through flex funds. This approach not only supports long-term financial security, but also appeals to employees seeking greater flexibility in their retirement planning.

To discover how a global benefits platform can streamline your employee experience in Romania, and around the globe, download ‘Your guide to global benefits tech’, or speak to one of our benefits experts.