Definitive Guide to Hiring in Albania

Hiring In Albania

Labor Laws in Albania

Employee Probation Period

• Unless otherwise agreed in writing, the first 3 (three) months of the employment will be deemed to represent a probationary period, regardless of whether the contract is for a fixed or indefinite term.

Annual Leave in Albania

• Annual vacations are governed by the Albanian Labor Code.
• The Labor Code provides for minimum paid annual leave of no less than four calendar weeks in one year (pro-rata for those who have worked less than one year).

Maternity Leave Albania

• Employees are entitled to 365 days of paid maternity leave.
• 35 days should be taken before the expected due date and a minimum of 63 days must be taken after. 
• After 63 days the employee can remain on leave or return to work.
• In case the pregnant woman decides to start work after the period of 63 days after child birth, until the child reaches the age of one, she may choose between the two options: 
• a paid leave of two hours during the normal work duration; or 
• reduced work duration, for two hours, with the same salary as if she had worked full time.

Paternity Leave Albania

• Labor law provides 03 days of paid holiday to the father on birth of a child

Sick Leave in Albania

• In the event of illness, the employer pays the employee 80% salary for a period of 14 (fourteen) days, a period which is not covered by Social Insurance.

Work Hours in Albania

• The Albanian work week is 40 hours, with a standard workday of 8 hours.
• Duration of work is reduced for jobs that pose difficulties or that are harmful to health, as determined by the Council of Ministers. 
• For employees under 18, the daily duration of work is not more than 06 hours a day. 

Overtime in Albania

• Overtime and extra working hours are also regulated by the Labor Code (Article 91), which provides that the employer shall compensate the employee for any overtime with 25 percent of normal payment if time-off in lieu is not given; or, if agreed, to compensate with time-off in lieu plus 25 percent of the hours of the normal working day, unless otherwise provided for in the collective contract.
• Extra work performed at weekends or on public holidays will give rise to higher extra payments of 50 percent of the normal payment, unless otherwise defined by the collective contract.
• Under no circumstances shall the maximum of overtime hours exceed 200 hours per year.
• The Employer cannot ask the Employee to perform overtime work if the Employee has performed 48 working hours during a week.

Notice Period in Albania

• The notice period for the termination of the employment contract is defined in the individual employment contract.
• In the event that the parties have not defined the notice term in the employment contract, reference shall be made to the Labor Code.
• During the probationary period either party may terminate relations with five days' notice.
• The Labor Code provides for mandatory minimum notice periods to be applied in the case of termination of an indefinite (open) term contract by either the employer or the employee, as follows:
• during the first six months: two weeks;
• between six months and one year: one month;
• between one and five years of employment: two months;
• for more than five years of employment: three months.

Severance in Albania

• Employees are generally eligible for a severance payment of at least 15 days if they have worked for three or more years.

Albania Salary and Wages

Accurately estimate your costs when employing in Albania in 2023. Includes base salary, dependents, benefits, taxes, social contributions, and payroll costs. Monthly or yearly calculation period.

13th / 14th Month Pay

• No
• There is no statutory requirement to pay the 13th or 14th month.
• Employers may however decide to add a 13th month payment if as part of the contract. Recently the government has approved an end-of year bonus for medical staff and police.

Income Tax in Albania

• Individual taxpayers, both residents and non-residents, are subject to personal income tax (PIT).
• Albanian law applies the principle of worldwide taxation. 
• Resident individuals are taxed on all sources of income in and outside the territory of Albania, while non-resident individuals are taxed on income generated only in the territory of Albania.
• The following tax rates apply to income generated from employment:

Immigration Albania

• Foreigners must apply for either a work permit or a work registration certificate.
• Citizens of the EU and Schengen area are exempt from the obligation to apply for a work permit or a work registration certificate.
• In addition, citizens of North Macedonia and Montenegro of Albanian ethnicity are exempt from the obligation to apply for a work permit or a work registration certificate.

Termination

• A fixed-term employment contract is terminated upon the expiry of its term without the need for any prior notice.
• An open-term employment contract is terminated when one party decides to do so and the prior notice period has been observed.
• The Labor Code provides that an employment contract can be terminated with or without cause and although in normal circumstances a notice period must be provided, there are circumstances where the law justifies immediate termination for reasonable cause.
• The notice period for the termination of the employment contract is defined in the individual employment contract.
• In the event that the parties have not defined the notice term in the employment contract, reference shall be made to the Labor Code.
• During the probationary period either party may terminate relations with five days' notice.
• The Labor Code provides for mandatory minimum notice periods to be applied in the case of termination of an indefinite (open) term contract by either the employer or the employee, as follows:
  • during the first six months: two weeks;
  • between six months and one year: one month;
  • between one and five years of employment: two months;
  • for more than five years of employment: three months.
• Employees are generally eligible for a severance payment of at least 15 days if they have worked for three or more years.

Payments And Invoicing

• The tax year in Albania is the calendar year.
• Employers must withhold personal income tax from wages and compensation paid, and they must pay the withholding tax to the tax administration by the 20th day of the following month.
• Employers must maintain records of payments in accordance with instructions issued by the Ministry of Finance.
• Individuals earning income of ALL 2 million or more must file a personal income tax return for the preceding year by 30 April.
• Income taxed at source must also be declared, but no personal income tax is calculated on such income.

Accrued Benefits in Albania

Payroll Accruals Additional information

Why use Global Expansion to hire in Albania

Establishing a branch office or subsidiary in Albania can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Albanian labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Albanian law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Albania. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Albanian Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.