Payroll & Employment Guide North Macedonia

In North Macedonia, employment contracts must be in written form and must clearly define job duties, salary, benefits, and termination terms. These contracts can be for a fixed or indefinite period and are regulated by the Labour Relations Law. Macedonian Denar (MKD) is the official currency used in Macedonia for all financial transactions, including salary payments. In this context, salary payments must be made in Macedonian Denar, ensuring consistency with local financial regulations and practices.

Notice periods: Up to 2 months, depending on role and tenure.

Termination of employment: Can be initiated by either party but must follow legally defined procedures, especially outside of the probation period.

Employers are legally required to offer mandatory employment benefits, and often add extra perks to stay competitive. Understanding both is key to attracting and retaining top talent in North Macedonia.

The mandatory allowances are transportation and meal allowance and they were incorporated into the gross salary with the adoption of the Law on Mandatory Social Security Contributions.

Some allowances:

Employees may receive additional allowances for overtime, night shifts, three-shift work, and work on Sundays. These allowances are fully taxable and included in the gross earnings when calculating tax and contribution obligations.

Non-taxable reimbursements:

Certain reimbursements are excluded from taxation up to statutory limits. These include:

• Business trip reimbursement on bank account - Both original receipts and a completed travel order are required. Reimbursement will also include applicable daily allowances, which vary based on factors such as trip duration and whether the trip was domestic (within Macedonia) or international.
• Business expense reimbursement on the bank account: Original receipts are required for reimbursement. Employees must provide the actual receipts, which can be sent by post.
• Use of personal vehicles for official purposes
• Compensation in the event of the death of an employee or a close family member
• Severance payments (up to legally prescribed amounts)

Amounts exceeding the legal thresholds for these reimbursements are treated as taxable income.

Deductions from salary:

In addition to taxes and contributions, deductions from an employee’s gross salary may include:

Personal income tax (PIT) – withheld at a flat rate of 10%.

Employee social security contributions – covering pension, health insurance, disability, and unemployment funds.

All statutory deductions are calculated on the full gross salary, as there is no ceiling for contributions in Macedonia.

Mandatory benefits: Social security (covers healthcare, pensions, unemployment benefits, and disability assistance).
Common perks: Performance bonuses, transportation and meal allowances, holiday pay, flexible working hours, professional development, health and wellness programs.

Leave policies: Annual leave, sick leave, maternity leave, paternity leave, parental leave, paid leave.

North Macedonia has a flat personal income tax system, with additional mandatory social contributions shared between the employee and employer.

• Personal income tax: A flat rate of 10% on gross salary.
• Corporate tax: A flat rate of 10% on company profits.
• Value Added Tax (VAT): 18%
• Social security contributions: Both employees and employers contribute, covering health, pension, and unemployment insurance.

Payroll processing in North Macedonia must adhere to timelines and legal reporting standards. Employers are responsible for calculating, withholding, and paying taxes and social contributions on behalf of their employees. Per the Macedonian Labour code, the deadline for paying salaries is the 15th of the following month. Per Native Teams policy, the salary payment deadline is the 5th of the following month.

38% of the total gross will be the total contribution (covers for the pension, disability, health insurance, income tax, and contribution to unemployment)

There is no ceiling on contributions; contributions are calculated on the entire gross salary, with no upper limit.

Salary is calculated based on working days; it means only the days an employee actually works (excluding weekends and public holidays) are considered. The number of months for salary payment is 12 monthly instalments throughout the year.

The 13th salary that is paid in Macedonia is for the holiday pay (К-15). The employee has the right to holiday pay, provided he has worked for at least 6 months in the calendar year with the same employer. It can be paid in July or December, but in most cases it is paid in December. By the end of December, it must be paid.

In Macedonia, performance bonuses are treated like regular salary payments for tax purposes. This means that the category of the bonus does not affect payroll calculations; it is taxed at the same rate as salaries. As a result, employers must ensure that performance bonuses are accurately reported and included in the overall payroll processing to comply with local tax regulations.

Salary payment deadline: Legally by the 15th of the next month; Native Teams processes by the 5th to enhance employee satisfaction

Taxes and contributions payment deadline: Monthly, submitted to the Public Revenue Office

Payroll declarations deadline: Monthly, in alignment with salary payments

Payroll currency: MKD (with EUR sometimes used for reporting)

Employment in North Macedonia is governed by the Labour Relations Law, which covers contracts, minimum wages, working conditions, termination procedures, and worker protections.

Total employment cost:

• Employer’s social security contributions: 28%
• Employer’s health insurance costs: 7.50%

Minimum wage: 36,037 MKD per month

Probation period: Maximum 4 months

Termination pay: In Macedonia, terminated employees are paid on the regular salary payment date. There is no mandatory additional termination pay, and unused leave days are not compensated since employees can transfer them to a new job. Payments to terminated employees must be made in accordance with the standard salary schedule.

Using EOR services in North Macedonia allows you to legally employ individuals in the country without opening legal entities there. The EOR takes over all the legal responsibilities as an official employer, including:

• Legal employment and contracts
• Payroll processing
• Tax withholding
• Benefits administration
• Onboarding/offboarding employees

Using PEO services in North Macedonia provides HR and administrative support, while you remain the legal employer. PEO services are ideal for employers who already have legal entities in North Macedonia but need support to manage their workforce operations, including:

• HR support and workforce administration
• Payroll and benefits management
• Compliance and local labour law guidance
• Employment contracts assistance

Native Teams provides a payroll calculator adjusted per North Macedonia’s labour laws. Estimate gross-to-net salaries, tax withholdings, and employer costs in North Macedonia with our localised calculator. Designed to meet all payroll and compliance requirements.