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What are the minimum wage requirements?
In 2022, the national minimum wage in Montenegro remained fixed at €532.5 per month, that is 6,390 euros per year, taking into account 12 payments per year.
Accordingly the national minimum wage has been raised 201.2 Euros per month from the previous year, 60.73%. in the last year.
Contributions & Taxes
How much are the contributions & taxes?
Social security – The employer is required to make social security contributions at a rate of 10.3% of an employee’s salary. The contribution comprises pensions (5.5%), health (4.3%) and unemployment (0.5%). The maximum base for contributions in the calendar year is EUR 50,000.
Capital duty – No Payroll tax – The municipal authorities levy a surtax of up to 15% on an employee’s salary. In addition, labor fund contributions are levied on the gross salary at a rate of 0.2%. Real property tax – Property tax is levied on the ownership/use of property at rates ranging from 0.25% to 1%.
In general, the corporation tax rate is 25% for listed companies and is 35% for unlisted public and private limited companies. For Banks, insurance and other financial institutions, the corporation tax rate is 37.5% if listed and 40% if not listed.
Rates – Salary is subject to progressive tax at rates of 9% and 11%. Gross monthly salary up to the amount equivalent to the average salary in the previous year (EUR 765) is subject to the 9% tax rate; the portion of monthly gross salary exceeding this amount is subject to 11% tax.
General personal income tax rate is 9% and is levied on income which is not higher than national gross average income in the previous year (EUR 766 for 2018). For personal income in 2019 higher than EUR 766 monthly tax rate of 11% is levied. Tax rate on revenues from interest paid to non-residents is 5%.
What is the payroll cycle?
In Montenegro, the payroll frequency is monthly, and payment is generally made by the last working day of the month.
Is there 13th salary in Montenegro?
There are no provisions in the law.
What are the main Labor Rules?
A written notice must be given at least 30 days before the date of termination of employment unless the contract or collective agreement states otherwise.
The probationary period is defined in the collective agreement or employment contract and must not exceed six months. It is common to practice in Montenegro for probation periods to be three months.
Severance for Employees
The severance pay is given as the sum of one third of the employee’s average gross salaries paid over the previous six months, for each year of work with that employer, or 1/3 of the average monthly salary without taxes and contributions in Montenegro, if this is more favorable for the employee.
Leave and Benefits
Leave and Benefits rules
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
Employees are eligible for at least 5 paid sick days per year.
Maternity leave & Paternity leave
Female employees are entitled to up to 365 days of maternity leave, which can start up to 45 days before the birth and not later than 28 days before the birth. She may not return to work until at least 45 days after the birth. Maternity leave pay is outlined in the labor law. If the mother returns to work before she has used all of her leave, the father may use the balance.
After maternity leave, either parent can work half time until the child turns three years old.
A parent can also take unpaid leave until the child turns 3 and receive job protection.
Other leave (marriage, bereavement, exam leave)
Depending on the collective agreement or employment contract terms, an employee may be allowed additional leave types approved between the employer and employee. Employees are entitled to up to 7 days of paid leave for:
- Professional examinations
- Death of an immediate family member
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