If you invoice as a PFA in Romania, you need a planning system. Not because the math is “impossible”, but because:
- taxes are paid on a schedule that can differ from your invoice cashflow
- contribution thresholds and rules can change by year
- the declaration workflow (Declarația Unică) requires you to be organized
This is a practical overview so you understand what to estimate, what to track, and what to ask your accountant. It’s not legal/tax advice and it won’t replace an accountant for edge cases.
TL;DR
- Separate business revenue from “money you can spend”. Build a tax buffer.
- Track revenue and deductible expenses monthly; update projections when income changes.
- Run at least two scenarios: conservative vs optimistic.
- Use a versioned calculator (tax year matters):
Who this is for
- IT contractors who invoice as PFA and want to avoid “surprise taxes”.
- People moving from employment to B2B and trying to understand cashflow planning.
- Contractors considering PFA vs SRL and wanting a clearer picture:
The 3 moving parts you must plan for
1) Revenue (invoices) vs cash collected
A common mistake is planning taxes based on invoices issued while your client pays late (Net 30/60).
Practical habit:
- track both “invoiced” and “collected”
- keep a buffer so a late payment doesn’t force you into debt
2) Deductible expenses
Your taxable base depends on:
- what counts as deductible in your regime
- how well you document it (receipts, invoices, business purpose)
Don’t treat “expenses” as a single number. Track categories (accounting, software, equipment, travel, training) so you can audit your own assumptions.
3) Contributions and thresholds (year-specific)
Romanian PFA taxes often include multiple components (income tax and social contributions), and certain thresholds can change by tax year.
That’s why year-versioning matters. If you read advice from “last year”, you can end up over/under-estimating.
What you should track monthly (the minimum “finance dashboard”)
Create a simple spreadsheet (or use your accounting app) and track:
- revenue invoiced (RON and EUR/USD if relevant)
- revenue collected
- business expenses (with category and invoice/receipt)
- tax buffer (how much you set aside)
If you want a rule of thumb: always set aside a tax buffer immediately when you receive money, not “when the deadline comes”.
The “planning mindset” (why people get surprised)
Contractors overspend because they treat revenue like net salary.
A clean habit:
- keep a separate “tax buffer” account
- define a monthly transfer rule (e.g., move X% of collections to tax buffer)
- update projections whenever your income changes
This transforms taxes from a shock into a predictable cost.
How to estimate: the practical workflow
Step 1: Choose your scenario inputs
Run two scenarios:
- conservative revenue (assume some downtime and lower utilization)
- optimistic revenue (strong year, higher utilization)
For each scenario, estimate:
- annual revenue
- annual deductible expenses
- expected taxable base
Step 2: Run the calculators (as a first-pass model)
As a first approximation, start with the PFA tax calculator (2025), then double-check the scenario in the Declarația Unică calculator (2025).
The goal is not to get the “final cent”. The goal is to understand sensitivity:
- how much does net change if expenses increase?
- what happens if revenue crosses a threshold?
Step 3: Validate with your accountant (fast, targeted questions)
Instead of asking “how do taxes work?”, ask:
- “Given my revenue and expense profile, which regime applies and what assumptions should I use?”
- “Which expenses are safely deductible for my activity and which are risky?”
- “How should I handle multi-currency invoices (documentation, conversion)?”
Declarația Unică: what to understand at a high level
Declarația Unică is a yearly declaration process used to declare and settle certain obligations for individuals (including many PFA scenarios).
What matters for planning:
- you should maintain documentation throughout the year (don’t rebuild it last week)
- deadlines and exact requirements can change, so confirm official guidance for your year
- your declaration should match your accounting records
If your situation is complex (multiple income sources, mixed regimes, major deductions), rely on an accountant.
Common mistakes (IT contractor edition)
- Treating all revenue as spendable (no buffer).
- Underestimating downtime (selling your time is not 12 months billable).
- Mixing personal and business spending (harder documentation).
- Not documenting expenses (you lose deductions and credibility).
- Using outdated rules (not versioned by year).
Practical next steps
Once you’ve run your numbers, complete the picture with the pieces that usually change the decision: PFA vs SRL (2025), VAT for IT contractors (2025), and the Freelancer hourly rate formula (incl. downtime).
