hiring my first employee

Practical details

I need to obtain a password from the Labour Inspectorate (=ro. ITM, Inspectoratul Teritorial de Muncă). Using the services of an accounting firm can greatly help: most accounting firms also offer payroll services, so an accounting firm will be able to help me with both:

• managing the labour contracts (=ro. administrare personal): official contract templates etc., and
• payroll (=ro. salarizare): the monthly documents which need to be prepared as supporting documents for the labour tax statements

⚠️ One important element about the Labour Inspectorate is that the changes in their system take place from the day after. This may leave the foreigner in a delicate position especially when navigating between tight deadlines, so the best is to ask Maria

Tax details

If my Business in Romania is a microenterprise company (that is, with revenue less than 1 million euro) and I don't have any employees, I will have to pay 3% revenue tax. If I do have at least one full-time employee, that 3% revenue tax transforms into just 1% revenue tax. Making the calculations, it is worthwile having an employee when the revenue is above ~ EUR 100 000

✅ Tax optimisation

If the annual revenue of my Business in Romania is between EUR 100 000 and EUR 1 000 000, the minimum salary costs for 1 full-time employee are covered from the tax difference between the 3% and 1% revenue tax described above, so it is recommended for me to hire an employee when my revenue gets around the EUR 100 000 threshold