Romania is a member of the European Union and among the countries with the lowest cost of living within the EU. This makes it the ideal destination for retirement and for those who want to live on a budget. The labour force participation rate in Romania is about 57.02%, while unemployment is currently at 3.9%. This data is a good sign for job seekers in Romania. Although it’s a member of the EU, it does not use the Euro as its national currency. The current national currency of Romania is the Romanian Leu (RON), which is equivalent to 0.23 US Dollars (USD) as of 6th December 2019.
So, what is the average gross salary in Romania? Currently, $1,577 per month or $18,920 a year, while the average hourly rate is $9.06/hour. Tax rates in this country are very high, resulting in a low average net salary of $588/month. Despite having some of the lowest salaries in the EU, the average salary has been increasing year after year and shows no signs of slowing down.
Romania has a free-market economy, which has continued to develop quickly over the years. However, there is a great development imbalance between urban centres and rural regions. The mean income for urban centres is about 50% more than that of rural regions. On the other hand, it is the leading country in electronics production and the leading destination for foreign investment in Central and Eastern Europe. In this article, I have discussed Romania’s labour market and economy to help you make informed choices about relocating to live and work in Romania. Let’s get right into it:
Average Salary in Romania
The best way to rate your income level is to check out salaries offered for the jobs you’re interested in, as opposed to looking at the average salary of the country as a whole. Here are the average monthly salaries of a few professions to get you started
- Accountant $1,010
- Architect $1,297
- Attorney $2,086
- Administrative Assistant $762
- Cashier $874
- Chef $1,186
- Chief Executive Officer $3,225
- Dentist $3,655
- Electrical Engineer $1,398
- General Manager $2,603
- Flight Attendant $1,298
- Journalist $1,427
- Nurse $1,209
- Pharmacist $1,700
- Photographer $1,035
- Pilot $1,770
- Receptionist $1,140
- Sales Manager $2,404
- Secretary $801
- Teacher $1,199
The average salary in Romania is relatively low due to the increasing inflation and high currency exchange rates. It has, however, increased by 3% since 2018 and predicts a slight increase in the years to come.
While the national and job title averages are great guides, it’s important to note that salaries also differ by location, industry, qualifications, working hours, and skills among other things. The average salary is higher in larger cities such as Bucharest, Cluj, Brasov, Constanta, and Timisoara. But, in the smaller cities, it’s closer to the minimum wage. Bucharest is the highest-paying city at an average of $1,709/month, followed by Sibiu at $1,654/month, Cluj at $1,572/month, Timisoara at $1,480/month, and lastly Brasov at $1,408/month. Vrancea has the lowest salary in Romania at $460 per month.
The highest paying industry is Information Technology with an average of $1,231 per month. It’s followed by the oil extraction industry at $1,113/month, the heavy industry at $1,026/month, the Insurance and Private Pension industry at $993/month, and the Financial or banking sector at $987/month.
Mandatory employee benefits
The Labour Law in Romania states that an employee has the right to sick leave of up to 183 days annually. Employers are required to pay for the first five days of the sick leave, while the rest is paid by insurance. Employees are also granted the right to 20 fully-paid vacation days in a year.
According to the law, social security payments are mandatory and are contributed by the employer and the employee. With your contributions, you’ll be entitled to several benefits, including pension funds, health insurance, unemployment funds, occupational risk benefits, and much more.
The minimum termination notice period is 20 days. Income tax is levied at a rate of 16%. The tax and labour laws are updated frequently through negotiations and agreements between the concerned parties.
Job opportunities for foreigners
It is quite difficult to get medium-skilled jobs in Romania, especially for expats who don’t speak the native language. It’s, however, quite easy for them to secure higher-end jobs in the IT sector and in large corporations, which fortunately pay the highest salaries in the country. Most expats are working in Bucharest, considering most of the large corporations are based there. Non-Governmental Organizations (NGOs) are the most suitable option for foreigners who work outside the corporate environment.
All foreigners are required to have a work permit. Those from EU nations are exempted from this requirement, but they must have a resident permit. EU nationals are also given priority during employment over other foreigners.
Romania Average Household Income
Survey reports on the household income in Romania were last updated in 2018. The figures had reached $4,966.06 per annum or $894.73 per month by December 2018. This was an increase from $3,283.06 per annum in 2017. The monthly average expenditure was $766.38 per household. This means that one household spent 85.6% of its monthly income on expenditure. Romania is among the few European Union countries whose expenditure is more than 60% of the income. Salary formed 64.5% of the household income, while agricultural income formed 1.5%, social benefits 20.4%, property and assets income 0.7%, and 1.8% were from other sources.
Minimum Wage in Romania
There are three categories of the minimum salary in Romania. The government declared them as mandatory and anyone who does not abide by this is charged a fine of 2,000 RON ($464). National minimum wage is categorised depending on workers’ field of work, level of education, and working experience. The categories are as follows:
General national minimum salary of 2,080 RON ($483)
A higher minimum salary of 2,350 RON ($546): This applies to employees who have one-year working experience in that field of work, as well as those who have completed college.
A much higher minimum salary of 3,000 RON ($697): This applies to the construction sector.
Given that these minimum wages are gross, the take-home pay is actually lower. The net salary after tax comes down to about $294 and $328 for the first and second category of employees. Things are, however, different for construction workers since they are exempted from paying income tax and social contributions until 2028.
Romania is rapidly developing which attracts more investors, expats, and companies into the country. One of the reasons for the development is the fact that the minimum wage has increased more than 10 times its nominal value in 20 years. However, some worry that the increased minimum wage may increase unemployment as small businesses may be unable to afford labour.
Average Salary Bucharest
The average gross salary in Bucharest is $1,706/month or $20,458 a year, while hourly jobs pay an average of $9.73 an hour. The average net salary after tax comes down to $730/month. As mentioned earlier, Bucharest has the highest salaries in the country; in fact, salaries in this city are 8% more than the country’s average. According to the salary reports submitted in 2018, the average salary has increased by 2% in 2019.
With that being said, keep in mind that salaries will also vary by profession, industry, employer, as well as an individual’s academic credits and skills. Some of the highest paying fields include:
- Engineering, $59,000
- Financial services, $50,000
- Consulting and accounting services, $47,000
- Finance control and strategy, $36,000
- IT and software development, $30,000
- Sales and business development, $20,000
On the other hand, the top-paid employee in this city is the C level executive at an average of $49,311 per annum, followed by a business developer at $35,976, a software engineer at $33,579, and IT manager at $33,579. The lowest-paid employee is a waiter at an average of $5,855 per year.
Generally, salaries in this city range from $229.75/month to a maximum of $7,517/month. The median salary is $1,646.1, meaning half of the working population in the capital city earn above $1,646.1 while the other half earns an amount lower than that.
Most of Romania’s wealth is concentrated in Bucharest, attracting a lot of foreign investors. The city is highly developed and has some of the largest multinational corporations, which work to enhance the economy and provide a wide variety of jobs.
The unemployment rate in Bucharest is 2% unlike the 7% for the entire country. Locally, there is a shortage of skills in the field of real estate, trade, and management, which are often filled by foreigners. Other than academic qualifications and technical skills, language skills are valued by employers. Therefore, fluency in Romanian and international languages such as English and French is a real asset in Bucharest.
Cost Of Living in Romania
The overall cost of living in Romania is pretty affordable as per European standards. Life in urban centres is a bit costly but wages are higher than in the rural regions. Here are a few common household expenses to help you budget:
Housing costs will vary depending on location, type of accommodation, and facilities offered. For starters, the average cost of renting a one-bedroom apartment is $323/month in one of the city centres and $231 within the outskirts. Renting a three-bedroom apartment is $552/month and $398/month in the same areas. Purchasing an apartment will cost you $1,556/square meter in the city centre and $1,096/square metre in the rural areas. If you choose to buy on credit, ensure you shop around for a mortgage to get the best deal possible.
One can save on costs by living like a native; buying food from the grocery and cooking at home. The costs of regularly used items are as follows
- $1.02 for a litre of milk
- $0.59 for a 500g loaf of bread
- $1.07 for a kilogram of rice
- $5.42 for a kilogram of local cheese
- $1.24 for a kilogram of tomatoes
- $0.58 for a kilogram of potatoes
- $2.26 for a dozen eggs
A one-course meal in an inexpensive restaurant costs about $5.81, while a combo meal in a fast-food restaurant will set you back $4.65.
When it comes to transport, Romania has numerous road networks connecting to various destinations in Europe. Public transport costs $0.58 for a one-way ticket. One can also buy a monthly pass at a regular price of $16.13. A litre of gasoline is $1.32. Public transport is supplemented by taxis, which start at $0.51 with an additional $0.49 per km.
These are just the basic household expenses as there are several more you’ll have to budget for depending on your needs. This includes, but not limited to, clothing, utilities, entertainment, childcare, and education. For an average family to lead a comfortable lifestyle in Romania, it will cost them around $1,604/month (excluding rent/mortgage payments).
About the author: Marta Kovachek is the author of this article. She graduated from the University of Chicago with a master’s degree in Economics. Marta enjoys writing about the current economic situation and loves helping our readers to find their next "destination". From places to live to complex social and economic topics, we always enjoy Marta's work. Please contact us in case of any questions.