
Definitive Guide to Hiring in Albania
Find everything you need to confidently hire in Albania - labor law, tax law, compliance, payroll, benefits and more.
Capital
Tirana
Population
2.812 MM
Monetary Unit
Albanian lek
- 1 Hiring In Albania
- 02 Labor Laws in Albania
- 01 Albania Salary and Wages
- 05 Income Tax in Albania
- 06 Social Security in Albania
- 08 Immigration Albania
- 09 Value Added Tax (VAT) in Albania
- 13 Termination
- 14 Mandatory Benefits in Albania
- 15 Payments And Invoicing
- 01 Accrued Benefits in Albania
- 01 Payroll Accruals in Albania
- 01 Why use Global Expansion to hire in Albania

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Hiring employees compliantly in Albania means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Albania so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:
(a) Establish your own new legal entity, banking, accounting and payroll service in Albania; or
(b) use an Employer of Record like Global Expansion who can handle all of the details for you.
Labor Laws in Albania
Employee Probation Period in Albania
- 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).
New Year’s Day | 1st January |
Dita e Verës | 16th March |
Nowruz | 23rd March |
Easter Monday | 13th April |
Orthodox Easter Monday | 20th April |
Labor Day | 1st May |
Eid al-Fitr | |
Eid al-Adha | |
Mother Teresa Beatification Day | 19th October |
Flag Day | 28th November |
Liberation Day | 30th November |
National Youth Day | 8th December |
Christmas Day | 25th December |
Maternity Leave in 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 in 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.
Working 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.
Albania Average Salary and Wages
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:
Salary income in ALL/month |
Taxable income in ALL/month |
Tax rate in percentage/month |
||
From |
Until |
From |
Until |
|
0 |
40,000 |
0 |
40,000 |
0% |
40,001 |
50,000 |
0 |
30,000 |
0% |
30,001 |
50,000 |
50% * 13% of the amount over ALL 30,000 |
||
50,001 and more |
0 |
30,000 |
0% |
|
30,001 |
200,000 |
13% of the amount over ALL 30,000 |
||
200,001 |
And more |
22,100 ALL + 23% of the amount over 200,000 ALL |
Social Security in Albania
- Employers and employees contribute to a social security fund a percentage of the calculated monthly salary.
- The total contribution is 27.9%, of which 16.7% is borne by the employer, and 11.2% is borne by the employee.
- The contribution consists of a social security contribution of 24.5% (out of which 15% is borne by the employer and 9.5% is borne by the employee) and a health security contribution of 3.4% (out of which 1.7% is borne by the employer and 1.7% is borne by the employee).
- The monthly minimum and maximum salaries for social contributions are ALL 34,000 and ALL 149,953 respectively.
- The self-employed, the self-employed in a partnership, and the self-employed that hire third parties (excluding self-employed in agriculture) are liable to pay for themselves a mandatory SHC made up of social insurance contribution of no less than 23% of the monthly minimum salary of ALL 34,000 and health insurance contribution of 3.4% on no less than the double minimum salary, i.e. ALL 68,000.
Contribution |
|
Social Security Contributions |
Health Security Contribution |
Employer |
|
15% |
1.7% |
Employee |
9.5% | 1.7% |
Immigration Requirement in 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.
Work certificate
- The work registration certificate is issued for a period of 60 days to 90 days within one year for the following categories:
- Consultants and audit service providers
- Artists and technical staff in cultural activities
- Technical staff provided by foreign companies for technical services
- Lecturers
- Personnel of international transport in Albania and certain other persons
- To obtain a work certificate, the following documents must be submitted:
- Application form
- Copy of the passport
- Individual employment contract or secondment contract between the foreign entity, the local entity and the individual employee
- If the above documents are filed by proxy, the relevant power of attorney
- Five passport-size pictures
- Receipt for fee payment
Work permit
- The work permit can vary depending on the type of economic activity that the foreigners will perform in Albania.
- Type A/P work permits are issued to employees who have legally entered Albania, fall in the list eligible for this type of permit and have regular employment contracts.
- Type A/P work permits are issued for the following terms:
- One-year term for the first application
- Two-year term, renewable two consecutive times
- Permanent term, after the expiration of the second two-year term for the work permit
- To obtain a Type A/P work permit, the following documents must be submitted:
- Application form
- Passport (expiration date at least three months after the visa expiration date)
- Copy of passport information regarding generalities and other important information
- Individual employment contract or secondment contract between the foreign entity, the local entity and the individual employee
- Registration certificate (court decision or company extract from National Business Center) of the employer
- If the above documents are filed by proxy, the relevant power of attorney
- University degree certificate
- Five passport-size pictures
- Receipt for fee payment
Residence Permit
- Foreign citizens who plan to stay in Albania for more than 90 days within a 180-day period and who have entered Albania with a Type D visa or without a visa can apply for a residence permit.
- The duration of a residence permit may be three months, six months, one year, two years or five years, or the permit may be permanent.
- Residence permits with the first three periods of duration can be renewed up to five consecutive times.
- The two-year residence permit may be renewed only one time.
- Foreigners may apply for a permanent residence permit if they have had a legal residence in Albania for five consecutive years and have a permanent activity.
- To obtain a residence permit, the following documentation must be submitted:
- Application form
- Passport (valid for at least three months after the expiration date of the visa)
- Copy of passport information regarding generalities and other important information
- Criminal Records Clearance of the individual extracted in the last six months
- Rent or purchase contract for an apartment or house in Albania
- Personal/Family Certificate translated in Albanian, released in the last six months
- Three passport-size pictures
- Declaration from the host or employer about the purpose of stay
- Photocopy of the work permit or the professional license
- Health insurance certificate for Albania
- Medical report (for citizens of and coming from countries affected by epidemics)
- Fee payment receipt
Type of Visa/Permit |
Documentation |
Validity |
Eligibility |
Work Certificate |
|
|
|
A/P Work Permit |
|
|
|
Residence Permit |
|
3 month to indefinite |
|
Value Added Tax (VAT) in Albania
- The standard VAT rate is 20%, and the standard VAT period is the calendar month.
- Taxable transactions include goods and services supplied domestically as well as goods imported into Albania by a taxable person.
- A reduced 10% rate applies to the supply of agricultural inputs, including fertilizers, pesticides, seeds, and seedlings
- A reduce rate of 6% applies to the supply of accommodation services
VAT
Standard Rate | 20% | |
Reduced Rate | 10% | |
Reduced Rate | 6% |
Termination of Employment Albania
- 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.
Mandatory Benefits in Albania
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, sick leave, maternity leave, overtime pay, and severance pay.
- Statutory benefits also include social security benefits
Mandatory Benefits Overview
-
Probationary Period
-
Annual Leave
-
Public Holidays
-
Maternity Leave
-
Sick Leave
-
Overtime Pay
-
Severance Pay
-
Social Security Benefits
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 in albania 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
Christmas Bonus% | 0% |
Christmas Bonus Over | 0% |
Severance per Year %
Employees are generally eligible for a severance payment of at least 15 days if they have worked for three or more years (4.11% of annual salary) |
4.11% of annual salary |
Vacations %
Employees are enitled to 20 days of annual leave per year |
5.49% |
Notice %
Notice period is as follows:
|
0.25% to 16.66% |
Christmas Bonus Over | 0% |
Vacations Plus%
A part may be added to cover compensation in kind - the criteria is determined by the Council of Ministers. |
- |
Total percentage of Salary (yearly) The total employment accruals as a percentage of salary per anum are equal to 17.94% |
17.94% |
Payroll Accruals in Albania
Albania Accruals Additional Information
Vacation | 8.77% |
Social Insurance Institute | 15.000% |
Health insurance | 5.48% |
Maximum contribution for social insurance | 132,312 lek |
Description | 7.30% |
long term care insurance | Employers are liable to pay social security contributions for their employees at the rate of 16.7%. The employer contribution is made up of 15% social insurance contribution and 1.7% health insurance contribution. The monthly minimum and maximum salaries for social contributions are ALL 30,000 and ALL 132,312, respectively |
Payroll Accruals Additional information
|
Employment Accruals |
|
Annual Leave | The Labor Code provides for minimum paid annual leave of no less than four calendar weeks in one year | This equals 8.21% of annual salary (30/365 days) |
Maternity Leave | Employees are entitled to 365 days of paid maternity leave.35 days should be taken before the expected due date and a minimum of 42 days must be taken after. Women are paid 80% of their average daily wage for leave prior to the birth and up to 150 days after the birth. For the remaining leave, pay is given at 50% of her average wage. | This equals 80% of average daily wage of the 35 days prior to birth. Moreover, it equals 50% of the average daily wage of the 150 days after birth. |
Sick Leave | In the event of illness, the employer pays the employee 80% salary for a period of 14 (fourteen) days | This equals 80% of 3.835% of the annual salary (14/365 days)) |
Overtime Pay | Overtime is paid at 25% more than the hourly wage on normal working days. Overtime is paid at 50% more than the hourly wage on weekends or public holidays. 200 hours per year is the maximum overtime hours allowed. | This equals 25% of hourly wage on normal days and 50% of hourly wage on weekends. |
Severance Pay | Employees are generally eligible for a severance payment of at least 15 days if they have worked for three or more years. | This equals 4.109% of annual salary (15/365 days) |
Social Security Contribution | Employers must make social security contributions (15% of annual salary) and health security contributions (1.7% of annual salary) | This equals 16.7% of annual salary. |
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.