Serbia: A Guideline to Payroll and Employer of Record

Establish your presence globally with Neeyamo Payroll Solutions as we help you go beyond borders to manage your global payroll services and hire new talent in Serbia. 

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Overview

Cheese immediately conjures images of Switzerland or Italy. But what if we tell you that the world's rarest and most expensive cheese is produced in one country seldom associated with cheese? Serbia produces "pule" cheese, considered the rarest cheese in the world, which fetches a staggering $1300 per kilogram. Made from the milk of the Balkan Donkey, over 25 liters of donkey milk is required to produce just 1kg of Pule cheese.

The splendor of pule cheese is a mere reflection of Serbia's hidden depths. Just as the Balkan Donkey's milk weaves an unparalleled tale of taste, the country's reservoir of talent and potential adds brushstrokes to a canvas that the world is only beginning to discover.

Are your company's expansion strategies leading you to hire employees in Serbia? If you lack a physical presence in the country, an essential requirement for recruiting local talent, Neeyamo can assist. Neeyamo – Global Payroll Providers assist organizations worldwide with onboarding and managing employees in Serbia - processing international payroll accounting, managing local compliance requirements, benefits, and more.

Tools And Instances

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Global Payroll

Neeyamo’s global payroll solution covering 180+ countries

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Global Work

A tech-based EOR solution to manage your extended workforce

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Optimize hiring process with a technology-first approach to solving the background screening problems

Facts And Stats

Capital

Belgrade

Currency

Serbian Dinar(RSD) 

Official Language

Serbian  

Fiscal Year

1 January - 31 December

Date Format

DD/MM/YYYY

Country Calling Code

+381

Time Zone

UTC+02:00(CEST) 

Global Payroll

Overview

What is Global Payroll?

Global payroll is the management of the entire payroll function of an organization across all countries of operation. Organizations use automated payroll services capable of doing this from one central location.

Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity. The solution to this problem is - Payroll Outsourcing for businesses using payroll processing providers.

Over the years, Neeyamo – Global payroll vendors, has observed these complexities and strived to provide a global payroll system through a single technology platform - Neeyamo Payroll.

Payroll Taxes

Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.

Employee Taxes

The employee taxes in Serbia are computed as follows: 

Health insurance

5.15% 

Pension and disability insurance

14%

Unemployment insurance

0.75%

Employee personal income tax:

Net annual income between 2,470,644.00 RSD and 4,941,288.00 RSD : 10.00%

Employer Taxes

The employer taxes in Serbia are computed as follows: 

  • Pension and disability insurance: 11% 
  • Health insurance: 5.15%

Non taxable amounts for payments 
With effect from February 1, 2023, to January 1, 2024, review the nontaxable amounts from the Law on Personal Income Tax for payments


Non taxable amount for earning and reduction of pension contribution rate 

  • With effect from January 1, 2023, Instead  of  the  current  19,300  dinars,  the  non-taxable  salary  amount  should  be changed to 21,712 dinars.
  • A   1%   reduction   in   the   employer-funded   pension   contribution   rate    reduced  the overall percentage down from 25% to 24% (from 11% to 10%).
  • Self-assessment taxation is used  to  collect  tax,  and  there  are  two  models available for calculating taxable income.
  • Service fee payments for health, disability, and pension  insurance  should  be  made every three months.

Payroll Cycle

Overview

Undoubtedly, payroll is a critical process for any organization. The pay cycle in Serbia refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

Frequency

In Serbia, the payroll frequency is typically a month. The employer must make salary payments at least once a month.  

13th Month Cycle

There is no legal requirement for 13-month payments. Employers may issue bonuses at their discretion.  

Global Work

Overview

An Employer of Record (EOR) service provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a local registered entity and a local bank account, prior to making a job offer to an international hire.

An EOR service provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits ensuring compliance with local tax laws and regulations.

This allows organizations to focus on collaborating with the employee in Serbia for operational tasks, with the knowledge that they have a cost-effective solution to support their global business payroll & HR requirements, as they continue their global expansion.

A company that provides EOR for Serbia would be the best fit for companies looking to expand their global workforce. Neeyamos International payroll services has your go-to solution with our Global Payroll Technology stack, providing both managed payroll services as well as EOR services under one umbrella.

HR Mandates and Practices

Minimum Wage

The minimum wage is 201.22 RSD net per hour, with an average monthly minimum of 47,767.08 RSD

Overtime

An employee’s overtime work hours cannot exceed 8 hours per week. An employee cannot work more than 12 hours a day, including overtime (i.e., 4 hours of overtime per day).  
Any employee working overtime shall be entitled to a premium of 26% of the basic salary. 

Data Retention Policy

Records can be kept in digital, physical or both forms. One of the basic principles of the Law is storage limitation. Personal data has to be kept in a form that permits the identification of data subjects for no longer than is necessary for the purposes for which the personal data is processed. There are no specific retention periods (i.e., specific time limits) for different types of personal data set under the Law.

Hiring and Onboarding Requirements

Hiring

The new Employee should register with all respective authorities while joining the organization.

Onboarding

The following data is required during onboarding:  

  • Visa/work permit  
  • Personal Details  
  • Social security number 
  • Tax identification number 

Probation

In Serbia, the probation work may last for a maximum of six months.  

During the probation period, the employer or the employee may terminate the employment contract with a notice period that may not be shorter than five working days. The employer shall be obliged to give reasons for termination of the employment contract. 

Leave

Public Holidays

Employees are entitled to the following public holidays:

  • Jan. 1 to Jan. 3: New Year
  • Jan. 7: Christmas
  • Feb. 15 and Feb. 16: Day of the Statehood of Serbia
  • Apr. 7: Good Friday
  • Apr. 8: Holy Saturday
  • Apr. 9: Easter Sunday
  • Apr. 10: Easter Monday
  • May 1 and May 2: Labor Day
  • Nov. 11: Armistice Day in the First World War

Annual Leave

Employees are entitled to paid annual leave of 20 days following completing one year of service with an employer. If the employee has not yet worked for six months within an organization, the employee accrues annual leave at the rate of 1/12 per month.

Sick Leave

An employee is entitled to paid leave from work due to temporary inability to work for up to 30 days in the below manner:

  • 65% of the average salary in the 12 months preceding if illness or injury was not sustained at work
  • 100% if inability is caused by an occupational illness or injury sustained at work.

Employers must submit a medical certificate for the sickness within the first three days of sickness. 

Maternity Leave

Employees may receive a maternity entitlement in conjunction with childcare leave that equates to 365 days of leave which begins 28 to 45 days before the estimated date of birth.

During this time, an employee receives compensation of the average of their salary over the past 12 months and up to a maximum of five times the national average wage.

Other Leave

Unpaid Leave:

The employer may also grant leave without compensation of salary to the employee for the following purposes:

  1. Leaving to serve in the military to complete the period of military service;
  2. Being assigned to work abroad by the employer or within the framework of international technical or educational and cultural cooperation to diplomatic, consular, and other missions;
  3. Being temporarily assigned to work with another employer;
  4. Appointed to the office within a state agency, trade union, political organization, or to another public office, the exercising of which requires temporary cessation of work for the employer;
  5. Serving a prison sentence, i.e., imposed safety, correctional or protective measures, lasting up to 3 months.
  6. Responding to the summons of a State Agency.

Bereavement Leave  

Employees are entitled to paid leave for five working days in case of the death of a member of the immediate family.  

Blood Donation Leave  

An employee is entitled to 2 consecutive days of paid leave for every instance of voluntary blood donation, counting also the day of donating blood. 

Termination

Termination Process

An employment relationship can terminate:

  • By expiry of the period it was concluded for
  • When an employee reaches 65 years of age and a minimum of 15 years of social insurance coverage, unless otherwise agreed between the employer and the employee
  • By agreement between the employee and the employer
  • By cancellation of employment contract by the employer or the employee
  • At the request of a parent or guardian of an employee younger than 18 years of age
  • In the event of the death of the employee
  • In other cases specified by the law.

The termination process varies according to the employment agreement and collective agreement in place and is based on the type of contract and reason for termination.

Employers must provide an explanation of the reasoning for the dismissal and must do so in writing at least eight days before the termination initiation. An employee must be allowed to respond to an employer’s termination notice; failure to provide this opportunity may result in a court invalidating the dismissal.

Notice Period

Employers must give an employee eight days of notice before the dismissal. An employee terminating the employment contract must provide 15 days’ notice.

In the event of layoffs, a notice period of 30 days is required.

Severance Pay

In Serbia, severance pay is only paid in the case of layoffs. The severance payment is equal to at least 1/3 of the employee's regular salary for each year of service.

Visa

Overview

Here are all the required documents to submit when applying for a Serbian visa.   

  1. Valid passport - Your passport must be valid three months before the return date, have at least two blank pages, and be in good condition.   
  2. Two photos - The photos must be recently taken within the last six months, be in color, and be passport-sized.   
  3. Application form - Complete the application form sincerely and with all the current information. Do not leave blank spaces, and do not fill the application with false information because it can lead to your visa refusal.   
  4. Fee payment - When submitting the documents, you can finish the visa fee payment at the consulate or embassy. Make sure you attach the recipe of the payment to other requested documents.   
  5. Travel medical insurance - Proof that you have valid health insurance with a coverage of €20,000 within the Serbia area if you face any medical problem while being in Serbia.  
  6. Bank statements - You need a document issued from your bank that includes your bank statements for the last six months. This document must prove that you are financially stable and can finance yourself in Serbia.   
  7. Proof of booked flight itinerary - This document includes the date and flight time, airplane name, and time and day of your return flight.   
  8. Accommodation proof in Serbia - This document must prove that you have a place to stay in Serbia. This document can be a letter of invitation from a friend or a family member, a rental agreement, a hotel reservation, etc.   
  9. Letter of invitation - Depending on the purpose of your visit to Serbia, you need an invitation letter from a:
  • Friend or a family member if you are visiting family members or friends in Serbia.  
  • Business company in Serbia if you are visiting Serbia for work purposes.  

Types of Serbian Visas

Short-Stay (C visa): A short-stay visa allows you to stay in Serbia for three months within 180 days. The short-stay visa is issued for:  

  • Tourism purposes.   
  • Business meeting purposes.   
  • Traveling with school for school trip purposes.   
  • Official meetings for political purposes.

Long-Stay (D Visa): A long-stay (D visa) allows you to stay in Serbia for one year. The long-stay visa is issued for:  

  • Study purposes.  
  • Family reunion purposes.  
  • Work purposes.  
  • Humanitarian or religious activity's purpose. 

Employee Background Checks

Legal and Background Checks

Serbian law does not regulate what checks an employer is allowed to carry out during the hiring process, but rather imposes certain limitations with respect to what type of information may be requested from candidates.  

Generally, candidates must provide the employer with documents and other evidence that they meet the requirements for the job role. However, the law explicitly prohibits employers from requesting information in relation to the candidate’s family, marital status and family planning. Employers also may not request documents and other evidence that has no direct relation to the performance of the job.  

Health checks are permitted only if the prospective job involves an increased health risk, in which case a prior medical check and confirmation by a competent health institution that the employee is capable of performing the job are necessary.  

Under that law, employers are not permitted to ask candidates to provide a certificate of criminal history. The employer can generally check publicly available information on candidates, including public social media profiles. However, the employer must inform the candidate before collecting and processing any information, including public information.

The prior notice is usually included in a privacy policy. It should contain all relevant details regarding the data processing, including the legal basis for the processing, the purpose of the processing, a list of the data subject’s rights, and information on any data transfer. Any accessing of information (including publicly available information) must be related to the candidate’s qualifications for the prospective job; employers are not allowed to collect information pertaining to the candidate’s private life, such as private photos on social media. 

Last updated on August 31, 2023

If you have any queries or suggestions, reach out to us at irene.jones@neeyamo.com

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