Hire Employees in Serbia

Your own entity is normally a d.o.o. Registration is quick and inexpensive, and Serbia has become a significant nearshore engineering market with a deep and cost-competitive talent pool.

An Employer of Record inverts the sequence: the Serbian entity signs the Serbian-language contract, registers the employee with the Central Registry before they start, pays 15.15% in contributions and withholds the employee’s 19.9%, while you direct the day-to-day work.

The first thing to establish is which gross figure is under discussion, because Serbia uses two and they differ by 15.15%.

Serbia distinguishes between Gross 1 and Gross 2, and budgeting on the wrong one understates cost by 15.15%. Gross 1 is the employee's gross salary before their own contributions and tax. Gross 2 adds the employer's 15.15% on top and is the real cost to the business. Serbian salary discussions default to Gross 1, so a foreign employer quoting from a local conversation will consistently under-budget.

Employer contributions are pension at 10% and health at 5.15%. There has been no employer unemployment contribution since 2014, which sources written before that still show. The employee bears 19.9%.

Both sides are capped at RSD 732,820 a month, five times the average salary, with a floor at RSD 51,297, so contributions apply even where actual pay falls below the floor.

The other figure to get right is the non-taxable allowance, RSD 34,221 a month from January 2026. It reduces the salary tax base rather than the contribution base, and several sources including an official government page still quote RSD 25,000. Serbia has become a significant nearshore engineering market, and these are the two numbers most often carried forward incorrectly.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a small Serbian entity somewhere between 15 and 20 employees. Model both before committing, see EOR vs Entity for the full comparison, and plan any later migration so employees keep seniority.

Serbia distinguishes between Gross 1 and Gross 2, and budgeting on the wrong one understates cost by 15.15%. Gross 1 is the employee’s gross salary before their own contributions and tax. Gross 2 adds the employer’s contributions on top and is the real cost to the business.

Serbian salary discussions default to Gross 1, so a foreign employer quoting from a local conversation will consistently under-budget. It is the single most common Serbian costing error and it is entirely avoidable by asking which figure is meant.

Employer contributions are pension at 10% and health at 5.15%. There has been no employer unemployment contribution since 2014, which sources written before that still show. Both sides are capped at RSD 732,820 a month with a floor at RSD 51,297.

Serbia applies a single ceiling to everything, which sets it apart from its neighbours. Article 41 of the Contributions Act caps all three social contributions, pension, health and unemployment, at the same monthly base of RSD 732,820 for 2026, five times the reference average wage. There is no uncapped health component, unlike Slovakia, Czechia or Croatia where health runs on the full salary. The floor is the more consequential number for most hiring. The minimum monthly base is RSD 51,297, and where actual pay falls below it contributions are still calculated on that figure with the employer funding the difference. Hiring part-time or at low pay is therefore not proportionally cheaper. Note also that the employer unemployment contribution was abolished outright and no longer exists.

Four representative profiles, costed with the 2026 contribution rates above. Salaries are illustrative market midpoints, not GX operating data, use them to see how the on-cost percentage behaves as pay rises, not as a salary benchmark for a specific role. For real market data on your roles, ask for a costing.

Because the main charges are capped, the on-cost percentage falls sharply above the ceiling. Model a senior hire explicitly rather than scaling the junior figure, the error runs in your favour but it distorts the comparison against uncapped markets.

Four representative profiles costed on 2026 statutory rates. Salaries are illustrative market midpoints, not GX operating data.

Payroll runs monthly in dinars. Contributions and withheld salary tax are declared and paid together through the tax authority’s electronic system.

The non-taxable allowance is RSD 34,221 a month from January 2026, and it reduces the salary tax base rather than the contribution base. Several sources including an official government page still quote RSD 25,000, so this is one to configure from the current figure rather than an inherited one.

Salary tax is a flat 10% on the amount above the non-taxable allowance, which makes the calculation simple once the allowance is right.

Thresholds and ceilings are uprated periodically, so a figure correct in January may not hold later in the year. Where a row below is flagged, published sources disagreed and the conflict is recorded rather than resolved.

Thresholds move on a local cycle that does not always fall in January, so a figure correct at the start of the year may not hold through it. Where a row below carries a flag, published sources disagreed and the conflict is recorded rather than resolved, none apply on this page.

The sections that follow set out contracts and probation, working time, leave, termination and immigration in that order. Where an entitlement comes from a collective agreement rather than statute it is marked as such, because that distinction determines whether it is negotiable.

A written contract in Serbian is required and the employee must be registered with the Central Registry of Compulsory Social Insurance before starting work.

Probation may run up to six months and must be agreed in the contract. During it either party may terminate on at least five working days’ notice.

Fixed-term contracts are limited to twenty-four months in total, with exceptions for replacing an absent employee or for project work with a defined end. Exceeding the limit converts the relationship to indefinite.

Forty hours a week. Overtime is capped at eight hours a week and may not exceed twelve hours a day including regular hours, with a premium of at least 26% of the hourly rate. Night work and public holiday work carry their own premiums.

Overtime is where payroll disputes usually start. Record hours from day one even where the role is salaried and the expectation is that overtime will not arise, reconstructing records after a complaint is far harder than keeping them.

Overtime is where payroll disputes usually begin, and the burden of proving hours worked generally sits with the employer. Record hours from the first day even for salaried roles where overtime is not expected, reconstructing a record after a complaint is considerably harder than keeping one.

Public holidays sit on top of the annual leave entitlement. Where a holiday falls at a weekend, practice varies, some markets move it, some grant a substitute day and some do neither, so check the position before assuming a day in lieu.

The 12 dates below are the statutory position. Employers in many markets grant more by policy or collective agreement, and sector agreements sometimes add local or patronal days that do not appear in a national list.

Serbia observes 12 paid public holidays in 2026. Dates that fall at a weekend and any substitution rules are set out below; entitlement is separate from annual leave.

Maternity and child care leave: 365 days from the start of maternity leave. 100% of average earnings for the first year, paid by the state and reimbursed to the employer. Extended child care: A further year for a third or subsequent child. Two years in total from the start of maternity leave. Paternity: 5 working days. Paid by the employer. Sick leave: From day 1. The employer pays 65% of average earnings for the first 30 days; the health fund pays thereafter.

Paid absence: Up to 5 working days a year. For marriage, birth of a child, serious illness of a close family member or bereavement.

Termination requires a ground in the Labour Law. Where the ground relates to performance or conduct, the employer must first issue a written warning giving the employee at least eight days to respond before dismissal. Omitting the warning makes the dismissal unlawful regardless of the underlying conduct.

Severance on redundancy is at least one third of the employee's average monthly salary for each year of service with that employer.

Severance must be paid before the termination takes effect, not after. A dismissal where severance has not been settled first is invalid, and this sequencing catches out employers used to settling everything in a final payroll run.

Notice is a minimum of eight days where the employee resigns and is set by the contract or collective agreement for employer termination, within statutory limits.

A foreign national needs a unified residence and work permit, which Serbia consolidated into a single application in recent reforms, a meaningful simplification over the previous two-stage process.

Allow one to three months. The employer must generally demonstrate that the role could not be filled from the domestic labour market, though exemptions apply for intra-corporate transfers and certain categories.

Serbia is not in the EU, so EU nationals require the same permit as anyone else, a point worth confirming with candidates who assume otherwise.

Severance must be paid before the termination takes effect, not after. A dismissal where severance has not been settled first is invalid, and this sequencing catches out employers used to settling everything in a final payroll run.

Where the ground relates to performance or conduct, the employer must first issue a written warning giving the employee at least eight days to respond. Omitting the warning makes the dismissal unlawful regardless of the underlying conduct.

Practical controls: establish whether a figure is Gross 1 or Gross 2 before quoting, configure the non-taxable allowance at RSD 34,221, apply no employer unemployment contribution, register with the Central Registry before the start date, and pay severance ahead of the termination date.

Work backwards from the start date. For a Serbian national through an EOR, one to two weeks is realistic. A foreign national needs a unified residence and work permit, adding one to three months.

Confirm before making an offer: whether the figure under discussion is Gross 1 or Gross 2, because the difference is 15.15% and the ambiguity is the single most common Serbian costing error; that the non-taxable allowance is set at RSD 34,221 rather than the stale RSD 25,000; and that no employer unemployment contribution is applied.

Registration with the Central Registry of Compulsory Social Insurance must be completed before the employee starts. The contract must be in Serbian, and a foreign national needs a unified permit before beginning work rather than during onboarding.