Payroll & Employment Guide Serbia

In Serbia, employment contracts must be concluded in writing and typically follow the Labour Law framework. Contracts can be indefinite or fixed-term, and must include job duties, salary, working hours, and other conditions.

Notice periods: Vary by length of service, usually between 15 and 30 days
Termination of employment: Can happen through resignation, mutual agreement, dismissal for cause, or redundancy

Employers must provide statutory benefits, but many also offer extra perks to attract top talent.

Mandatory benefits: Health insurance, pension, and unemployment insurance
Common perks: Private health packages, meal allowances, remote work options
Leave policies: Paid annual leave (20+ days), sick leave, maternity/paternity leave

Mandatory allowances: Meal allowance, holiday allowance, and seniority payment after 1 year of employment.

Private insurance: There is no private pension system, but private health insurance is available through providers such as Generali and DDOR Novi Sad.

Employees must submit reimbursement forms for any expenses, and employers provide the Potvrda o Placenim Porezima i Doprinosima Po Odbitku (PPP PO) form summarising income and contributions for the year. This must be submitted by January 31. Additional private health insurance may incur extra costs affecting total compensation.

Bonus and incentives: Performance bonuses are treated like regular salaries for payroll purposes and taxed in the same manner. There are no separate bonus calculation rules in Serbia; all payroll rules applicable to salaries apply to bonuses as well.

Serbia offers a relatively simple tax system, with a flat income tax rate and clearly defined contribution obligations. Employers are responsible for withholding and remitting taxes and social security contributions on behalf of employees.

Individuals are considered tax residents of Serbia if they have a permanent home or a centre of vital interests in the country. Additionally, an individual is a resident if they are physically present in Serbia for more than 183 days in any 12-month period beginning or ending in the relevant tax year.

Residents are liable to tax on their worldwide income, while non-residents are taxed only on income generated in Serbia.

Personal income tax: Serbia applies a flat personal income tax rate of 10%. In addition to the monthly salary tax, a supplementary annual income tax applies to high earners:

• 10% on income between 3x and 6x the average annual salary.
• 15% on income exceeding 6x the average annual salary.

Withholding and contributions:

• Dividends: Generally taxed at a 15% rate, withheld at the time of payment.
• Interest: Interest earned (e.g., foreign-currency savings) is generally taxed at 15% for Serbian residents.
• Capital gains: Taxed at 15% for Serbian residents.

Tax allowances and non-taxable benefits:

• Voluntary insurance premiums: RSD 8,677.
• Daily commute (public transport): RSD 5,782 per month.
• Domestic business trip per diem: RSD 3,471 per day.
• Foreign business trip per diem: €90 per day.
• Private car for business use: RSD 10,121 per month.
• Birth of a child: Up to one average net salary. For payments in early 2026, the limit is RSD 110,670.
• Solidarity relief (illness or injury): RSD 57,827.
• Death benefit (employee or family member): RSD 101,194.
• Holiday gifts for children (under 15): RSD 14,457 per child, per year.
• Jubilee awards: RSD 28,912.
• Scholarships and student credits: RSD 44,325 per month.

Deductions and tax reliefs:

• Monthly salary tax threshold: RSD 34,221 - the amount subtracted from your monthly gross before calculating the 10% tax.
• Taxpayer: 40% of the average annual salary.
• Dependent: 15% per member.

Total deductions cannot exceed 50% of taxable income.

Serbian payroll must comply with monthly salary, benefits, and tax obligations. Payments are typically made in RSD, with reports submitted to the tax authorities.

Salary payment deadline: By the last working day of the following month
Taxes and contributions payment deadline: Same day as the salary payment
Payroll declarations deadline: Must be done before net salary payment, but can be done on the same day.
Payroll currency: RSD

The Serbian Labour Law governs all employment matters. Employers must stay compliant with local laws covering contract types, working conditions, and benefits.

Total employment cost:

• Employer’s social security contributions: 16.65%
• Employer’s health insurance costs: 5.15%
• Employees’ social security contributions: 19.9%
• Employees’ health insurance costs: 5.15%

Minimum wage (Effective January 1, 2026):

• Hourly rate: 371 RSD (+10.1%)
• Monthly minimum wage: 64,554 RSD / 551 EUR

Probation period: Maximum up to six months

Foreign nationals must hold valid work and residence permits to work and stay in Serbia. The exact requirements depend on the nationality of the applicant, job type, and length of stay.

Types of permits: Work permit and residence permit
Process length: 2-3 months
Process cost: Starts at 1500 EUR

Using EOR services in Serbia 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 Serbia provides HR and administrative support, while you remain the legal employer. PEO services are ideal for employers who already have legal entities in Serbia 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 offers a country-adjusted payroll calculator for 85+ countries, including Serbia. Easily estimate gross-to-net salaries, taxes, and mandatory contributions in a few clicks.

Here is a list of public holidays in Serbia: