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What should I know about hiring in Montenegro?
For businesses wishing to expand into Southeastern Europe, Montenegro is an ideal place. International companies are also drawn to the Balkan state due to its competitive tax structure, robust economic development, and business-friendly policies of the government.
The nation, which has always placed a strong emphasis on the service industry, is currently making significant efforts to grow its ICT sector. English is widely spoken and the local labor is highly competent.
In Montenegro, employment agreements are normally made for an indeterminate period of time, while fixed-term agreements are allowed under specific circumstances. Fixed-term agreements, however, are limited to 36 months in length.
Identification of the parties, place of employment, job title, description, and required qualifications; type of employment (i.e., fixed-term or permanent); date of commencement (and employment duration for temporary contracts); base salary as well as other compensation or benefits; payment modalities; working hours and schedule; the number of holidays; and terms of termination.
Why is Montenegro a good choice for finding remote employees?
The location of choice for distant talent is now Montenegro. It’s a fantastic location with expansive Adriatic views, historic strongholds, and accommodating regulations for remote employees.
The principal sectors are grouped into three categories: agriculture, manufacturing, and services. Steel and aluminium are the most vulnerable industrial industries. Consumer products, health hotels, and tourism are the three primary areas in the service industry. The employment rate in the agriculture sector is predicted to be 7.8% in 2021, 19.2% in the manufacturing industry, and 73% in the service sector, while the industry is expected to rise by 6.9% by 2021.
How can Native Teams help you hire in Montenegro
If you want to start hiring people from Montenegro, you can employ Montenegrins using an employment contract written in the employee’s native language. The contract must identify the location of employment, duties, working hours, and holidays, as required by law. Employees must get their contract within three months after starting their new job. Native Teams can help you employ your new team members through our employer of record services and as well as handle payroll, taxes, benefits and overall compliance of your Montenegro team.
Hire your first Montenegrian employee with Native Teams.
Legal requirements for hiring in Montenegro
Minimum wage
In 2022, Montenegro’s national minimum wage will stay fixed at EUR 532.5 per month, or EUR 6,390 per year, based on 12 payments per year.
As a result, the national minimum wage has increased by EUR 201.2 per month, or 60.73%, in the last year.
Contributions & taxes
Social security – Employers are obligated to contribute to social security at a rate of 10.3% of an employee’s pay. Pensions (5.5%), health (4.3%), and unemployment (0.5%) make up the contribution. The maximum donation basis for the calendar year is EUR 50,000.
Employer tax
Payroll tax – The local authorities charge a surtax of up to 15% on an employee’s wage. Furthermore, labor fund payments are required at a rate of 0.2% on gross wage. Real property tax – Property tax is charged at rates ranging from 0.25% to 1% on the ownership/use of property.
Corporate tax
The standard rate of corporate tax is 35% for unlisted public and private limited corporations and 25% for listed firms. The corporate tax rate for banks, insurance companies, and other financial institutions is 40% if they are not listed and 37.5% if they are.
Employee tax
Rates – Salary is subject to 9% and 11% progressive taxation. The part of monthly gross compensation over this level is subject to 11% tax. Gross monthly salary up to the amount comparable to the average salary in the preceding year (EUR 765) is subject to 9% tax.
Income tax
The general personal income tax rate is 9% and is payable on income that is less than the preceding year’s national gross average income (EUR 766 for 2018). In 2019, a monthly tax rate of 11% is payable on personal income above EUR 766. The tax rate on interest paid to non-residents is 5%.
To calculate the salary and taxes in Montenegro please click here.
Payroll cycle
Payroll is done monthly in Montenegro, and payments are usually made on the final working day of the month.
Is there a 13th salary in Montenegro?
A 13th-month salary is not legally mandated.
Labor rules
Notice period
Unless the contract or collective agreement indicates otherwise, a written notice must be delivered at least 30 days before the date of termination of employment.
Probation period
The probationary term is specified in the collective agreement or employment contract and cannot be more than six months. In Montenegro, probation periods of three months are normal practise.
Working hours
In Montenegro, a typical full-time workday is 40 hours per week or 8 hours per day.
Leave and benefits
Public holidays
Montenegro celebrates 8 national holidays, many of which are multi-day events:
- New Year’s Day
- Orthodox Christmas Eve
- Orthodox Christmas
- Orthodox Good Friday
- May Day
- Orthodox Easter Monday
- Independence Day
- Statehood Day
Annual leave
An employee has the right to 20 working days of annual leave each calendar year, as stipulated in the collective agreement or labor contract. Employees who work six days a week are entitled to 24 days of yearly leave.
Sick leave
Employees have the right to at least five paid sick days each year.
Maternity leave & paternity leave
Women are entitled to 140 days of maternity leave which must start between 30 and 70 days before the due date.
Fathers are eligible for up to 30 working days of paternity leave, which can begin 30 days before the due date and conclude when the child reaches three. Paternity leave is paid for by the state based on income.
The state pays for parental leave up until the kid is three and it is permitted. Together, the paid maternity and parental leave benefits are limited to 575 days.
Other leave (marriage, bereavement, exam leave)
Depending on the conditions of the collective agreement or employment contract, an employee may be granted additional leave kinds agreed upon between the employer and employee. Employees are entitled to up to seven days of paid leave each year for the following reasons:
- Matrimony
- Professional birth exams
- The death of a close relative
Insurance
Health security & private insurance
The mandated universal healthcare system in Montenegro is financed through payroll taxes and the general budget.
*Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices.*
Visa
Relocation and work permits
Native Teams can be your Employer of Record and apply for your work permit in the country. You will be able to upload all the needed documents in our app. Native Teams will support you by giving you regular updates on the progress until you get your work and residence permit.
How long is the visa/work permit process?
Usually, it takes 2 to 4 weeks to get a work permit, depending on the authorities and provided documents.
Which documents do you need?
To apply for a visa/work permit in Montenegro, please upload the documents from our onboarding list (relocation to log in/pricing).
Why use Native Teams for hiring in Montenegro?
Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:
- No paperwork: We will handle all the necessary paperwork for you.
- Save on taxes: We help you handle your taxes.
- No company set up: You can expand your business using our company entitles.
- Online onboarding: We’re here to ensure your onboarding process is trouble-free.
- No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
- Increase your profit: We assist you in growing your business and maximizing your profits.
- Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
- Local support: We can assist you in understanding and complying with the relevant local laws.
