Planning to hire employees in Serbia? Here’s a quick guide

Serbia has become a coveted destination for businesses looking to expand their workforce in Southeast Europe. Because of its highly educated talent pool, a strategic location at the crossroads of Eastern and Western Europe, and competitive labor costs, Serbia offers compelling advantages for employers. 

Whether you are a growing business scaling your team and looking to hire employees in Serbia, or a foreign company establishing a local presence, you must navigate Serbia’s employment landscape. This will provide a deep understanding of the country’s hiring procedures, labor laws, tax obligations, and other requirements. 

Explore this guide to know more about the hiring process in Serbia. Walk through things like registration, payroll, employment contracts, compliance, and benefits, and everything necessary to hire in Serbia. 

We will also discuss how Payoneer Workforce Management can help navigate compliance with employment regulations in Serbia and payroll management. 

How to hire employees in Serbia

You can choose from the following options to engage talent in Serbia:

1. Set up a legal entity in Serbia

To set up a legal entity in Serbia, you have to incorporate a company or a branch. This typically includes registering with the Serbian Business Registers Agency. 

After the registration, you obtain the Tax Identification Number (PIB) from the Tax Administration of the Republic of Serbia and a company registration number. After you hire in Serbia, you have to register the employee with the Central Registry of Compulsory Social Insurance (CROSO). The employee has to open a bank account. 

The whole process of setting up a legal entity in Serbia is time-consuming. There are various additional expenses involved in the process, too. The only advantage of this setup is that businesses have complete control over the operations. 

2. Hire independent contractors

Employers can hire independent contractors in Serbia. The contractor has to register as a ‘self-employed’ person with the Serbian Business Registers Agency to obtain the PIB and a unique identification number (MBR. 

Independent contractors are mainly hired for short-term projects or temporary work. They do not have the rights of employees in the country. 

However, when engaging contractors, employers must be aware of misclassification risks as they can lead to hefty fines and penalties.

You may use contractor management tools for support to seamlessly engage and pay contractors.

3. Partnering with a workforce management platform

If you want to engage and manage full-time talent in Serbia, you can partner with a workforce management platform, such as Payoneer Workforce Management. The platform offers support in navigating employee onboarding, payroll management, localized benefits, employee and employer contributions, taxation, compliance, employee offboarding, and more. 

Where to find employees in Serbia

When you are planning to hire employees in Serbia, you have to look up trusted sources and platforms for finding the right talent. 

Here are some of the most popular options to find employees in Serbia:

1. Job boards and job sites

• Various job boards and job sites are excellent destinations for finding the right employee in Serbia. Some of the most popular options include:
  • Poslovi Infostud
  • Poslovi.rs
  • HelloWorld.rs
  • lakodoposla.com

2. Recruitment agencies

• Recruitment agencies offer employees for both professional and blue-collar staff. 
• These agencies are connected to the local job market in Serbia, with resumes of screened professionals in different profiles. 

3. University relations

• Partnering with various universities in Serbia, in Belgrade, Nis, and Novi Sad, may prove to be quite effective for finding recent graduates. 

4. Recruitment support via a workforce management platform

• Onboarding and engaging employees via a workforce management platform like Payoneer Workforce Management offers a seamless experience. 
• You can focus on finding suitable candidates, and get expert assistance for employment contracts, payroll & benefits setup, timesheets, and more with Payoneer Workforce Management.

Onboarding employees in Serbia

Before engaging an employee, it is essential to have a clear onboarding process in place.

Here is a step-by-step guide to the onboarding process in the country:

1. The first step to onboarding employees in Serbia is signing the employment contract. The contract should set out the terms of employment clearly. This is a legal requirement under Serbian Labor Law. 
2. Before the employee’s first working day, you must register them with the Central Registry of Compulsory Social Insurance (CROSO). This covers health insurance, pension, and disability. 
3. The next step is setting up the payroll for the employee. The payroll must account for the income tax and social contributions for both employee and employer. 
4. There is an orientation session so that the new employee is familiarized with the onboarding steps, responsibilities, and company policies. 
5. This is followed by the introduction with team members, colleagues, and seniors for networking and communication. 
6. There might be a provision for employee training in Serbia. 

Key employment laws in Serbia

Employment in Serbia requires compliance with the country’s employment regulations. 

Employees in the country have to follow the legal framework of the country for a smooth experience. Here are some of the notable employment laws and regulations in Serbia:

• Labor Act (Zakon o radu) – This is the primary legislation in Serbia, acting as the fundamental regulatory document for all employment relationships in the country. 

• Law on Prevention of Harassment at Work (Zakon o sprečavanju zlostavljanja na radu) – This law forbids any repetitive active and passive behavior directed towards an employee that constitutes harassment at the workplace. 

• Law on Peaceful Resolution of Labor Disputes (Zakon o mirnom rešavanju radnih sporova) – The law governs dispute resolution and arbitration procedures between the employer and employee. 

• Law on Pension and Disability Insurance (Zakon o penzijskom i invalidskom osiguranju) – It governs social security contributions and benefits. Including mandatory pension and disability insurance obligations for employees and employers. 

Along with knowledge of the various employment regulations in Serbia, here are some things that you need to know while engaging employees in the country. 

Employment contracts

Employment contracts in Serbia are governed by the Labor Act and are primarily of two types:

• Indefinite period of time – The indefinite period of time employment contract is where the period of time of its validity is not determined. This is the standard contract offering maximum job security. 
• Definite period of time – If the employment contract is for a definite period of time, it means that the contract has a set end date. However, there are provisions for renewal. 

The employment contract in Serbia must be in writing, typically in Serbian and English, and signed by the employer and employee. It must be concluded before the employee starts to work. 

The employment contract in the country must contain the following details:

• Name and designation of the employer
• Name and address of the employee
• Educational qualification of the employee
• Job description of the employee
• Place of work
• Employment contract type and date of commencement of work 
• Working hours
• Wages/salary 
• Leaves and benefits
• Notice period
• Termination 

Employee benefits

In Serbia, employees are entitled to various benefits. Some of the most important ones are as follows:

Working hours in Serbia

As per the Labor Act in Serbia, the working hours in the country are 40 hours a week. 

Overtime in Serbia

Employees in Serbia might need to work overtime at the request of the employer for various reasons. 

Maximum overtime is 8 hours a week and 4 hours a day. An employee cannot work more than 12 hours a day. 

Employer’s tax obligations

According to employment regulations in Serbia, employers have to pay various taxes and social security obligations in the country. 

• The individual income tax in the country is as follows:
  • Employees with an annual income of RSD 3,268,224 are in the tax-free threshold. There is no income tax payable in this range. 
  • The income range exceeding the tax-free threshold and up to RSD 7,438,752  is taxed at a rate of 10%.
  • Any income exceeding RSD 7,438,752 is taxed at a rate of 15%. 

Termination and severance pay in Serbia

Employers in Serbia can terminate employees on valid grounds. Termination on invalid grounds may be considered unfair dismissal and lead to legal consequences for the employer. The process of termination is a complicated one and includes various procedures. 

Here are some common termination grounds in Serbia:

• Mutual agreement between the employer and the employee
• Employee resignation
• Termination during the probationary period
• Termination by the employer due to performance issues, misconduct, absence without leave, etc. 

Notice period 

Notice period varies in Serbia. 

• There is no notice period for an employee’s termination during the probation period.
• However, after the probation period, there is a minimum notice period of 15 days and a maximum notice period of 30 days. 
• The notice period often depends on the employee’s seniority. 

Severance pay

The amount of severance pay in Serbia cannot be lower than the sum of a third of the employee’s salary for each completed year of work. 

Explore Payoneer Workforce Management in Serbia

Payoneer Workforce Management helps streamline and integrate the hiring process in Serbia. 

Offering services in more than 160+ countries globally, it supports seamless workforce management in Serbia. It also offers assistance with onboarding, payroll, benefits, compliance with local regulations, and employment laws in the country. 

Book a demo today!

FAQs

1. What is the standard probation period in Serbia?

The probation period in Serbia varies from 15 to 90 days. The general norm of the probation period is 90 days. 

2. Is there an end-of-service benefit in Serbia?

Yes, in Serbia, employees get an end-of-service or gratuity benefit in the country. It is known as ‘otpremnina’. The gratuity calculation is done 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 6 months’ salary for each year of service, up to 30 years. 

3. Do employment contracts have to be in writing in Serbia?

Yes, employment contracts in Serbia have to be in writing and must be signed by the employee and the employer before commencing work. The contract must be written in the Serbian language. Bilingual versions might be required if necessary. 

4. What is the minimum wage and payout currency in Serbia?

The payout currency in Serbia is the Serbian Dinar (RSD).

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