Definitive Guide to Hiring in Serbia

Hiring in Serbia

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

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

Labor Laws in Serbia

Employee Probation Period

• According to Article 36, para. 2 and 3, the probation period can last for 6 months at most.

Annual Leave in Serbia

• The minimum duration of annual vacation is 20 days per calendar year. This minimum can be increased based on various criteria determined in the individual collective agreement, the work rules or the employment agreement (as applicable).

Holidays in Serbia

Maternity Leave Serbia

• Maternity leave includes:
  • Pregnancy leave, which starts between 45 and 28 days before the due date and lasts for three months after the birth.
  • Childcare leave, which starts on the expiry of pregnancy leave.
• Pregnancy leave and childcare leave jointly last 365 days and are fully compensated by the state

Paternity Leave Serbia

• As an exception, the father can use the mother's maternity leave in certain specific cases, for example, if the mother abandons the child, dies or cannot use her maternity leave for a justified reason (such as illness, serving a prison sentence and so on).

Sick Leave in Serbia

• An employee is generally entitled to sick leave any time he/she is sick or injured, without limitation. During the first 30 days of sick leave, the employee receives compensation amounting to either:
  • 65% of his/her average salary in the preceding 12 months, in the case of non-work related sickness or injury.
  • 100% of his/her average salary in the preceding 12 months, in the case of work-related sickness or injury.

Working Hours in Serbia

• The full working hours’ amount to 40 hours per week.
• A general employer's act may stipulate that full working hours are less than 40 hours per week, but in any case they cannot be less than 36 hours per week.

Overtime in Serbia

• Overtime cannot last for more than 8 hours per week, or four hours a day per employee.
• Any employee working overtime shall be entitled to a premium of 26% of the basic salary.

Termination of Employment in Serbia

• The procedural requirements for dismissal depend on the legal ground for dismissal. For example, if the employer terminates the employee due to an intentional breach of the work duty or the work discipline, the employer must issue a formal written warning letter stating:
  • The grounds for termination.
  • The relevant facts and evidence.
  • A deadline for response within which the employee can respond to allegations, which cannot be less than eight days.
• If the employee is a member of a trade union, this warning letter must also be delivered to the relevant trade union.
• On the employee's response or on expiry of the deadline for response, the employer can issue the decision on unilateral termination of employment.
• The decision must be delivered to the employee in person.
• The notice period in the case of unilateral termination by an employee cannot be shorter than 15 days, and not longer than 30 days.

Notice Period in Serbia

• The notice period in the case of unilateral termination by an employee cannot be shorter than 15 days, and no longer than 30 days.
• There is one exception regarding termination during probationary work.
• Employee whose labor contract has been terminated for lack of performance is as follows:
  • one month if he/she has up to 10 years of insurance (period for which contributions for the retirement insurance have been paid);
  • two months if he/she has 10-20 years of insurance period;
  • three months, if he/she has over 20 years of the insurance period

Severance in Serbia

• The severance pay shall not be lower than the sum of one-third of the salary of the employee for each full year of service (employment) for the first 10 years and one-fourth of the salary of the employee for each year of service after ten years and fourth of the salary of the employee for each year of service after 10 years of employment.
• The salary shall be the average monthly salary of the employee paid in the three months preceding the month in which the severance is paid.

Serbia Salary and Wages

13th / 14th Month Salary in Serbia

• No
• There is no statutory requirement to pay the 13th or the 14th month salary.
• Employees receive annual leave of 20 days at the standard rate.
• Bonuses are given to employees at employer level and they vary in form.

• An employee who pays Serbian social security contributions is entitled to benefits, including health insurance for the employee and dependent family members, disability and professional illness insurance, unemployment allowances, retirement and other benefits.
• Social security tax is imposed on salaries received by individual employees.
• Contributions to the Pension and Disability Fund at a rate of 24% and contributions to the Health Care Fund at a rate of 10.3% (for individuals without any other insurance) are payable by individuals on income received under contracts relating to royalties, services, additional work, agency and sports, as well as under similar contracts involving the payment of remuneration for services performed.
• For expatriate employees, social security contributions may also be payable on salaries received outside Serbia.
• Under certain bilateral conventions, expatriates may pay social security contributions in their country of residence only.
• The minimum and maximum monthly social security basis amounts for 2023 are RSD 32,025 and RSD 500,360.

Immigration Serbia

• Before applying for a work permit, a foreign national must have a temporary residence permit.
• The procedure for obtaining a work permit takes up to 15 days.
• To obtain a temporary residence permit, a foreign national applies to the local Republic Police Department by stating the reasons for the temporary stay and, if requested, providing documents justifying the reasons.
• The applicant must also prove that he or she has health insurance and sufficient financial means for his or her support during the stay in Serbia.
• A temporary residence permit is issued for of a period of up to one year (initially for six months) and may be extended for similar periods if sufficient reasons exist.

Value Added Tax (VAT) in Serbia

• The standard VAT rate in Serbia is 20%.
• There are reduced rates of 10% and 0%.
• VAT is charged on sale of goods and services, as well as on imports (with exception of exports of goods that are usually taxed with 0%) to Serbia.
• Exports from Serbia are not subject to Value Added Tax.
• Income from financial services, such as insurance and banking services, investment income is exempt from VAT.

Mandatory Benefits in Serbia

• These are mandatory benefits as postulated by law
• Statutory benefits include probationary period, maternity leave, sick leave, annual leave, public holidays, notice period, severance pay (in specific cases)
• Statutory benefits also include social security benefits such as pensions and disability fund, health care fund and unemployment fund.

Payroll Accrual in Serbia

Country Accruals Additional Information

Description Coverage

The minimum tax base for social security contributions defined by the Law on Mandatory Social Insurance Contributions is fixed at 35% of the average monthly salary published in Serbia, while the maximum tax base for social security contributions is capped at five times the average monthly salary published by official statistics in Serbia at the moment of salary payment.

Payroll Accruals Additional Information

Accrued Benefits in Serbia

Why use Global Expansion to hire in Serbia

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

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

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