Definitive Guide to Hiring in Montenegro

Hiring in Montenegro

Hiring employees compliantly in Montenegro means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Montenegro 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 Montenegro; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Montenegro

Employee Probation Period

Annual Leave in Montenegro

• Minimum statutory annual leave is 20 working days for regular jobs and 24 working days for employees under 18 years of age

Holidays in Montenegro

Maternity Leave Montenegro

Paternity Leave Montenegro

• There is no paternity leave

Sick Leave in Montenegro

Working Hours in Montenegro

Overtime in Montenegro

• Overtime can not exceed 10 hours a week.
• Overtime is paid at a premium of 140% of wages

Notice Period in Montenegro

• Employees may be terminated for just cause and must provide written notice of at least 30 days.
• The employee has 5 days to respond.

Severance in Montenegro

• Employees are generally eligible for severance pay of at least 1/3 of their monthly pay in the last six months for each year of employment, with a minimum of the equivalent 3 months’ of the employee’s pay or average Montenegrin pay, whichever is more favorable to the employee.
• In case of an employed person with disability, the employer is to pay him/her a severance pay of at least 24 average salaries, if the disability was caused by an injury outside work or an illness or at least 36 average salaries, if the disability was caused by an injury at work or a professional disease.

Montenegro Salary and Wages

13th / 14th Month Salary in Montenegro

• No
• There is no statutory requirement to pay the 13th or the 14th month salary.
• Employees may agree on bonuses with their employers or through collective bargaining.

• An employee who pays Montenegrin social security contributions is entitled to various benefits, including health insurance for the employee and dependent family members, disability and professional illness insurance, unemployment allowances, pension payments and other benefits.
• Social security contributions for pension and disability insurance, health insurance, and unemployment insurance are calculated and withheld by an employer from the salary paid to an employee. 
• Unlike the other two types of social security contributions, pension and disability insurance contributions are subject to a specific annual cap (53,302 euros [EUR] for 2018).
• Social security contributions are payable by the employer and employee at different rates. 
• The amount borne by the employer is treated as an operating cost while the portion payable by the employee is taken from the gross salary.
• The rates paid by the employer are as follows:
  • Pension and disability insurance 5.5%.
  • Health insurance 2.3%.
  • Unemployment insurance 0.5%.
• The rates paid by the employee are as follows:
  • Pension and disability insurance 15%.
  • Health insurance 8.5%.
  • Unemployment insurance 0.5%.

Immigration Montenegro

• Work permit is a permit with the pre-determined duration of work, according to which an employer makes a labor contract with a foreigner, i.e. foreigner with a legal entity with headquarters in Montenegro or organizational unit of a foreign company, registered in Montenegro, delivering services or other form of work, on the basis of civil law contracts.
• This permit could be for:
  • Seasonal work of foreigners
  •  Work with the addressed foreigners (cross-border services, further training and education, movement of persons within a foreign company)
  • Training and education of foreigners and
  • The provision of contractual services
• Permits are issued for a limited time, for a period of three months to one year, extendable to two more years, depending on the type of permit.
• The Employment Bureau shall be obliged to decide on the request within 30 days from the day of submitting the request. 
• The Government of Montenegro, upon the proposal of the ministry in charge of the work, having previously obtained the opinion of the ministries in charge for some activities for which quotas are determined and opinion of the Social Council, in accordance with the migration policy and consideration of the labor market, establish an annual quota of work permits.
• Temporary residence permit (privremeni boravak):
  • To stay longer than 90 days you need one of these permits.
  • Generally, they last a year or as long as you meet the underlying condition (e.g., employment or studying.) 
  • They can be renewed for subsequent one-year terms.
• Permanent residence permission (stalni boravak):
  • These last for five years and can be renewed.
  • This grants all the privileges of Montenegrin citizenship, except voting and carrying a Montenegrin passport.

Value Added Tax (VAT) in Montenegro

• The main principles of the Montenegrin VAT are in line with the European Union (EU) Sixth Directive guidelines. 
• Taxable supplies are subject to a general 21% VAT rate
• However, certain supplies are taxed at a reduced 7% rate (e.g. bread, milk, books, medicines) and 0% rate (e.g. export of goods, supply of gasoline for vessels in international traffic).

Mandatory Benefits in Montenegro

• 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

Payroll Accrual in Montenegro

Country Accruals Additional Information

Description

Social security contributions for pension and disability insurance, health insurance, and unemployment insurance are calculated and withheld by an employer from the salary paid to an employee. Unlike the other two types of social security contributions, pension and disability insurance contributions are subject to a specific annual cap (53,371 euros [EUR] for 2019).

Social security contributions are payable by the employer and employee at different rates. The amount borne by the employer is treated as an operating cost while the portion payable by the employee is taken from the gross salary.

The rates paid by the employer are as follows:

Pension and disability insurance 5.5%.
Health insurance 2.3%.
Unemployment insurance 0.5%.

The rates paid by the employee are as follows:

Pension and disability insurance 15%.
Health insurance 8.5%.
Unemployment insurance 0.5%

Social security contributions for pension and disability insurance, health insurance, and unemployment insurance are calculated and withheld by an employer from the salary paid to an employee. Unlike the other two types of social security contributions, pension and disability insurance contributions are subject to a specific annual cap (53,371 euros [EUR] for 2019).

Social security contributions are payable by the employer and employee at different rates. The amount borne by the employer is treated as an operating cost while the portion payable by the employee is taken from the gross salary.

The rates paid by the employer are as follows:

Pension and disability insurance 5.5%.
Health insurance 2.3%.
Unemployment insurance 0.5%.

The rates paid by the employee are as follows:

Pension and disability insurance 15%.
Health insurance 8.5%.
Unemployment insurance 0.5%

Social security contributions for pension and disability insurance, health insurance, and unemployment insurance are calculated and withheld by an employer from the salary paid to an employee. Unlike the other two types of social security contributions, pension and disability insurance contributions are subject to a specific annual cap (53,371 euros [EUR] for 2019).

Social security contributions are payable by the employer and employee at different rates. The amount borne by the employer is treated as an operating cost while the portion payable by the employee is taken from the gross salary.

The rates paid by the employer are as follows:

Pension and disability insurance 5.5%.
Health insurance 2.3%.
Unemployment insurance 0.5%.

The rates paid by the employee are as follows:

Pension and disability insurance 15%.
Health insurance 8.5%.
Unemployment insurance 0.5%

Social security contributions for pension and disability insurance, health insurance, and unemployment insurance are calculated and withheld by an employer from the salary paid to an employee. Unlike the other two types of social security contributions, pension and disability insurance contributions are subject to a specific annual cap (53,371 euros [EUR] for 2019).

Social security contributions are payable by the employer and employee at different rates. The amount borne by the employer is treated as an operating cost while the portion payable by the employee is taken from the gross salary.

The rates paid by the employer are as follows:

Pension and disability insurance 5.5%.
Health insurance 2.3%.
Unemployment insurance 0.5%.

The rates paid by the employee are as follows:

Pension and disability insurance 15%.
Health insurance 8.5%.
Unemployment insurance 0.5%

Payroll Accruals Additional Information

Accrued Benefits in Montenegro

Why use Global Expansion to hire in Montenegro

Establishing a branch office or subsidiary in Montenegro 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 Montenegro labor laws are complex.

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

Global Expansion makes it easy for you to expand into Montenegro. 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 Montenegro 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.