Your guide to payroll in Serbia

Payroll management in Serbia requires a clear understanding of the country’s employment laws, tax regulations, and social contributions framework. 

When you are trying to streamline your business processes in the country, navigating payroll compliance in Serbia can be complicated. 

Serbia works under a structured system governed by the Labor Law, the Tax Administration, and the Central Registry of Compulsory Social Insurance (CROSO). Each plays an important role in how to pay employees in Serbia, and how various obligations are met. 

This guide delves deep into Serbia payroll processing and how Payoneer Workforce Management helps streamline Serbia payroll management, onboarding, benefits, and more. 

Serbia payroll: Wages and other payments

Employers in Serbia must comply with certain regulations for payroll in the country. This includes salary payments, bonuses, working hours, and other entitlements. 

This section covers such important details. 

Payroll cycle in Serbia 

• In Serbia, the payroll cycle is monthly. 
• The pay date for employees is M+7 (next month). This means that the employee will get a salary on the 7th of the next month for working the previous month. 
• The salary is paid out in Serbian Dinar exclusively.

Minimum wage

• From 1st January, 2026, the government has announced the minimum wage in Serbia to be RSD 371 per hour. 

Overtime pay

According to the Labor Act in Serbia, employees have working hours of 40 hours a week. 

• Employees might need to work overtime in Serbia at the request of the employer. There might be work volume that needs to be finished within a deadline, and other reasons. 
• Maximum overtime is 8 hours a week and 4 hours a day. An employee cannot work more than 12 hours a day. 

Sick pay

Employees in Serbia are entitled to 30 days of paid sick leave in the country. The employer pays 65% of the average salary in the previous 12 months if the employee is unable to work due to illness or injury outside work. 

From Day 31, the sick leave pay is covered by the state health fund (RFZO). 

Maternity pay

Female employees in Serbia are entitled to 12 months of paid maternity leave. The employee is entitled to 100% of the average earnings. 

Paternity pay

Male employees in Serbia are entitled to 5 working days of paternity leave in the country. However, there is no statutory pay entitlement for paternity leave. 

Severance pay

In Serbia, severance pay must be at least one-third of the employee’s salary for every completed year of service.

Payroll in Serbia: Contributions and deductions

Serbia payroll deductions include public health insurance and social security contributions, split between the employee and employer. This is in accordance with national regulations when employers pay employees in Serbia. 

Income tax

The individual income tax in Serbia is as follows:

Social security contributions in Serbia

• Social security contributions (Socijalno Osiguranje) in Serbia cover pension, healthcare, unemployment, family support, and other social benefits. 
• The contributions are paid both by the employer and the employee. The portion paid by the employee is taken from the gross salary amount, while the part payable by the employer is on top of the employee’s gross salary. 
• For the employee:
  • Pension and disability insurance
  • Health insurance – 4%
  • Unemployment insurance
• For the employer:
  • Pension and disability insurance
  • Health insurance – 6%

Other employee benefits

Though employees have to pay salary tax in Serbia, they are entitled to certain statutory benefits in the country. These benefits ensure that employees maintain a good work-life balance. 

Public health insurance

Public health insurance is mandatory in Serbia for the majority of residents. This insurance is overseen by the National Health Insurance Fund (NHIF).

Earned/Annual leave

Employees in Serbia are entitled to an annual leave of 20 working days. This can be increased by 5 days depending on the employer.

Annual bonus

Annual bonus or 13th-month pay is not mandatory in Serbia. These are discretionary and based on performance. The bonus amount is determined by the employer’s collective agreements, individual policy, or employment contract. 

Serbia payroll compliance best practices

With payroll compliance in Serbia, employers will stay compliant with labor and tax regulations in the country. Here are some of the best practices that employers can follow when they pay employees in Serbia. 

• Before the employee’s first working day, the employer must register them with the Central Registry of Compulsory Social Insurance (CROSO). This covers health insurance, pension, and disability. 
• All the payroll records must be maintained accurately. This includes duly signed employment contracts by the employer and the employee, tax filings (both employee and employer taxes in Serbia), and proper payslips. Serbian authorities often demand documentation during audits. 
• Salary taxes and social security contributions in Serbia must be submitted with the salary payments, simultaneously. 
•  Payslip requirements in Serbia are strong. All employees must get pay slips consistently, clearly outlining gross salary, deductions, and net pay in each pay period. 

Your options for payroll services in Serbia

Employers can choose from the following ways to engage and pay employees for better visibility into the employment costs in Serbia. 

• Setting up a local entity: When you set up a local entity in Serbia, you have a legal business presence. This helps take care of payroll compliance in Serbia. This process is typically expensive and time-consuming. 
• Hiring contractors: Employers can hire contractors or self-employed professionals for jobs and pay them via contractor management tools. However, they must be aware of the risks of misclassification or non-compliance with labor laws in the country, as it can lead to penalties. 
• Workforce management platforms: These platforms help employers in streamlining onboarding and Serbian payroll processing while navigating the local requirements. With compliance and support, employers can pay employees in Serbia on time and accurately. 

Payoneer Workforce Management offers accurate payroll management in Serbia, along with taking care of employee onboarding, leave entitlements and policies, benefits, taxes, and more. The workforce management platform also simplifies operations and reduces the burden of administrative work for the employer. 

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FAQs

1. What are the mandatory social security contributions in Serbia?

The social security contributions in Serbia cover pension, healthcare, unemployment, family support, and other social benefits. The portion paid by the employee is taken from the gross salary amount, while the part payable by the employer is on top of the employee’s gross salary.

2. What records must employers maintain for Serbian payroll?

For effective Serbia payroll, employers must retain all payroll-related documentation, including employment contracts, payslips, tax filings, and contribution receipts.

3. What is the minimum wage in Serbia?

From 1st January, 2026, the government has announced the minimum wage in Serbia to be RSD 371 per hour.

4. Do employees get any end-of-service benefits in Serbia?

Yes, employees in Serbia get an end-of-service benefit or gratuity in the country. The calculation of the amount of the gratuity depends on the length of service and the salary of the employee. The minimum gratuity is one month’s salary for each year of service, up to five years. The maximum gratuity is six months’ salary for each year of service, up to 30 years.

5. What is the pay date in Serbia?

Employees get paid monthly in Serbia. The pay date is typically the 7th of the following month.