Employer of Record in Serbia: A Complete Guide for 2026

Introduction

Serbia is one of the more attractive nearshore hiring markets in Southeast Europe, with a deep pool of English-fluent tech talent in Belgrade and Novi Sad. Serbia's talent market is particularly strong in IT and software development, gaming, BPO and nearshore services, and AI.

Hiring in Serbia means navigating the Labour Law (Zakon o radu) for employment relationships, the National Employment Service (NSZ) for foreign-hire work permits, and the Tax Administration of Serbia for payroll, each with its own filing cadence. An Employer of Record (EOR) in Serbia is an alternative to working with each of these authorities directly.

This guide covers Serbia's employment laws, work permits, payroll and taxes, incorporation, and how an EOR compares to a subsidiary, and shows how Skuad supports each step.

Serbia at a glance

Population: 6.64 million

Currency: Serbian Dinar (RSD)

Capital: Belgrade

Languages: Serbian

GDP: 90.1 billion

Employment in Serbia

Hiring in Serbia means working with one of two employment contract types defined under the Labour Law (Zakon o radu)

Definite contracts (fixed term): Used for seasonal work, project-based engagements, temporary increases in workload, or substitution for a temporarily absent employee.

The total duration of one or more consecutive fixed-term contracts with the same employee cannot exceed 24 months, and interruptions of less than 30 days do not break the chain.

Exceptions allow for longer terms up to 36 months for newly-established employers (incorporated less than one year ago), until project completion for project-based work, and for the full remaining period for unemployed persons within five years of retirement.

If an employee continues working five days past the contract's expiry, the relationship automatically converts to an indefinite contract.

Indefinite contracts: It’s the default form of employment in Serbia. Any contract that does not specify a fixed end date is treated as indefinite. If an employer fails to issue a written contract before the employee's first day, the relationship is automatically deemed indefinite from day one.

Both contract types must be in writing and signed before the employee starts work. While the Labour Law itself does not specify a language, in practice, contracts are drafted in Serbian (a bilingual version is acceptable) because any official proceeding in Serbia requires a Serbian text.

Employment law framework in Serbia

Serbia's employment relationships are governed primarily by the Labour Law, alongside the Constitution and several specialised statutes, including the Law on Safety and Health at Work, the Law on Employment of Foreigners, the Law on Prevention of Harassment at Work, the Law on Pension and Disability Insurance, the Law on Personal Income Tax, and the Law on Mandatory Social Insurance Contributions.

Together, these cover contracts, working time, wages, leave, social security, termination, workplace safety, and tax and contribution obligations.

The Ministry of Labour, Employment, Veterans, and Social Affairs is responsible for enforcement, with the Labour Inspectorate conducting day-to-day audits. The National Employment Service (NSZ) administers vacancy registration and work permits for foreign hires.

As part of Serbia's EU (European Commission) accession process, the Labour Law continues to be amended toward EU directives on working time, parental leave, and platform work. The proposed Law on Flexible Forms of Work, which will formally recognize freelancers, is the next significant change on the horizon.

Key statutory entitlements in Serbia:

Serbia's employment compliance covers Labour Law obligations on working hours, overtime, annual leave, sick leave, maternity protection, public holidays, minimum wage, and anti-discrimination, each of which carries real penalty exposure for foreign employers.

Skuad helps with employment compliance in Serbia as the legal employer, so your team can hire and pay your Serbian employees without setting up an entity or building in-country HR infrastructure.

Book a demo to see how Skuad supports Serbia employment compliance.

Contractors vs. full-time employees

Employment and contractor relationships in Serbia are subject to different legal and compliance requirements. Employment relationships are governed by the Labour Law, while contractor engagements are typically governed by the Obligations Act and other applicable tax and registration regulations.

An employment contract is generally used when an individual performs work within an employer's business operations under an employment relationship. Service agreements are commonly used for contractor engagements and are intended for activities that fall outside the employer's core business operations.

While parties have greater flexibility in defining the terms of a service agreement, the statutory protections and minimum guarantees available to employees do not apply.

The independent contractor test

Since 2020, the Serbian Tax Administration (STA) has applied an Independent Contractor Test that looks at the substance of the engagement.

The test has 9 criteria, and failing 5 or more means the contractor is reclassified and income is taxed at employment rates, with retroactive contributions and limited deductions.

The criteria foreign employers commonly fail:

• Setting the contractor's working hours or requiring leave approval
• Providing the contractor with office space, equipment, or training
• Engaging the contractor through job ads or for activities within the company's main business
• The contractor earns more than 70% of their income from a single client
• A non-compete clause restricting the contractor from working for others
• The same contractor engaged for 130 or more working days within 12 months

Taxation and social security requirements vary significantly between full-time employment and contractor arrangements.

Employee vs. contractor

Serbia's Independent Contractor Test means a contractor engagement can be reclassified as employment by the Tax Administration if 5 or more of 9 criteria fail, with retroactive income tax, pension and disability contributions, health insurance, and unemployment insurance contributions all coming due.

Skuad supports both hiring models from a single platform:

EOR for full-time employees

• Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
• Facilitates employment contract generation aligned with local labor laws and statutory requirements
• Supports payroll processing in 70+ currencies with tax withholding and statutory deductions
• Helps administer statutory benefits, paid leave, and termination entitlements in line with local requirements
• Assists with offboarding, including notice periods and severance calculations as required locally

Contractor management

• Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
• Flag worker classification risk before it turns into a compliance issue
• Supports invoice generation, approval workflows, and payment processing in local currency
• Facilitates multi-currency payouts across 70+ currencies with no manual reconciliation
• Enables contractor records, contracts, and payment history to be tracked from a single dashboard alongside full-time employees

Full-time or contractor? Skuad supports both. See pricing

Hiring in Serbia

Hiring in Serbia involves drafting a compliant employment contract, registering the employee with social insurance before the first working day, and arranging work authorisation for any foreign-national hires.

For Serbian nationals, hiring follows the general framework under the Labour Law with no work permit requirement. Foreign nationals need a work permit and a temporary residence permit before starting, and the employer is responsible for initiating both. Work permits are tied to a specific role and a specific employer.

Online recruitment in Serbia is mature, with both general-purpose and IT-specific platforms. The main portals used by employers:

• Poslovi Infostud
• Hello World
• Joberty
• National Employment Service (NSZ)
• LinkedIn
• Recruitment agencies work from a separate employer-candidate database and can speed up sourcing for senior or specialist hires.
• Hiring in Serbia means drafting a written employment contract in Serbian that covers the statutory floor on working hours, leave, and termination, executing three copies (one for the employee, two for the employer), confirming foreign hires have a work permit and residence permit in place before starting.
• It is also important to register the employee with the Central Registry of Compulsory Social Insurance (CROSO) before the first working day.

Skuad helps with hiring in Serbia as the legal employer, so you can onboard talent on RSD-denominated compliant contracts without setting up an entity.

Book a demo to see how Skuad supports hiring in Serbia.

Probation & termination

Probation

Probation is optional in Serbia and must be set out in the employment contract if used. The probationary period is valid for a maximum period of six months. During probation, either party can terminate the contract with at least five working days' notice, without a justifying reason.

Case law has been moving toward stricter scrutiny of probation dismissals, requiring employers to show a documented assessment of the employee's performance during the period. Probation is not a no-questions-asked window.

Termination

Serbia is not an at-will employment jurisdiction. Every employer-initiated dismissal must fall under a statutory ground, be substantiated by concrete facts and evidence, and follow the prescribed procedure.

The reasons for termination of an employer-employee relationship can be based on the following:

• The expiry of the contract term
• When the employee reaches 65 years of age and has at least 15 years of pensionable service, unless the employer and employee agree otherwise
• On mutual agreement between the employer and the employee
• On the cancellation of the contract by the employer or the employee
• When a parent or a guardian has requested the same for an employee below the age of 18 years
• Upon the death of the employee, or in any other case provided by law

The Labour Law sets out four categories of grounds on which an employer can initiate dismissal:

Employers can define additional grounds within these categories in their internal Rulebook on Work, within the limits of the Labour Law.

Mandatory written warning

For dismissals on grounds of breach of work duty or breach of workplace discipline, the employer is required to issue a written warning describing the alleged breach and the supporting evidence, and to allow the employee at least eight days to respond before issuing the dismissal decision.

The warning must be served in a way that proves receipt, by signed acknowledgement in person or by registered mail. Omitting the written warning step makes the dismissal unlawful regardless of how well-founded the underlying grounds may be. A court will annul the dismissal decision.

Notice periods

An employee who resigns must give written notice at least 15 working days before the intended last working day. The employer's Rulebook on Work can extend this to a maximum of 30 days. If the employee fails to observe the notice period and the employer suffers loss as a result, the employer can claim compensation.

Notice periods on the employer side depend on the ground for dismissal and the employee's length of service, and are set in the Labour Law and the employer's internal acts.

Severance pay

Statutory severance pay applies in two cases under the Labour Law:

• Retirement: Equivalent of two average salaries, in accordance with the employer's Rulebook on Work
• Redundancy dismissal: Minimum one-third of the monthly salary for each completed year of service with that employer, paid before the dismissal decision is issued
• The salary base for severance calculation is the employee's average monthly salary over the preceding three months. More favourable terms may be set in internal rules or the employment contract. An employee cannot waive the right to severance in advance.

Consequences of unlawful dismissal

• An employee has 60 days from the date of delivery of the dismissal decision to challenge it in court. If the court finds the dismissal unlawful, the employer faces:
• Reinstatement of the employee, where requested, or damages of up to 36 monthly salaries where reinstatement is not possible
• Payment of lost wages for the entire period from dismissal to enforcement of the judgment, including taxes and contributions
• Statutory default interest on each awarded amount

The opposing party's legal fees

• Regulatory fines of RSD 800,000 to RSD 2,000,000 are imposed when regulatory proceedings are initiated

Labour disputes in Serbia run two to three years at first instance, with interest accruing across the period. Serbian courts treat the employee as the weaker contracting party, and an employer entering litigation with procedural shortcomings has little prospect of success.

Termination in Serbia is heavily procedural. Foreign employers who miscalculate the written warning step, the notice period, or the redundancy severance calculation end up paying 36-month damages awards in the Labour Court on top of two to three years of lost wages and interest.

EOR solution

An Employer of Record (EOR) lets you hire in Serbia without setting up a local entity. The EOR is the legal employer for tax, payroll, and statutory compliance purposes, while your team directs the work day-to-day.

An EOR registered in Serbia acts as the legal employer for both Serbian nationals and foreign national hires. For non-Serbians, it sponsors the Single Permit (combined work and residence permit) through the National Employment Service (NSZ), including the labour market test via the Vacancy Registration Form (PPZ).

It also takes on RSD payroll and Personal Income Tax withholding through the Tax Administration of Serbia, and files the single application for compulsory social insurance via the CROSO.

Covering pension and disability insurance through the Pension and Disability Insurance fund (PIO - Penzijsko i invalidsko osiguranje), health insurance through the Republic Fund for Health Insurance (RFZO), and unemployment insurance.

When employment ends, it carries out Labour Law notice administration, written warning procedures, dismissal documentation, and severance calculation within the 60-day employee challenge window.

Hiring in Serbia comes with several compliance obligations on the employer. NSZ Single Permit filings for any foreign-national hires, including the labour market test. Monthly social insurance contributions across the PIO Fund, RFZO, and unemployment fund are filed through CROSO.

RSD payroll with Personal Income Tax withholding through the Tax Administration of Serbia, plus Labour Law notice, severance, and procedural requirements for any termination.

Each has its own filing authority and penalty exposure. Skuad acts as the legal employer in Serbia, so you can hire and pay your Serbian and foreign-national employees without registering with the Serbian Business Registers Agency or opening accounts with NSZ, CROSO, PIO Fund, RFZO, and the Tax Administration of Serbia separately.

For country-specific hiring data on Serbia, including employer tax rates, payroll frequency, and statutory benefits, download Skuad's Serbia hiring guide.

Here's what Skuad supports as your EOR in Serbia:

• Acts as the legal employer across 160+ countries, so you can hire in Serbia without setting up an entity or registering with each statutory authority
• Facilitates employment contract generation in Serbian, aligned with the Labour Law and statutory requirements
• Supports local payroll processing in 70+ currencies with accurate Personal Income Tax withholding, pension and disability contributions, health insurance, and unemployment contributions
• Helps administer statutory benefits, paid leave, and termination entitlements in line with Labour Law requirements
• Assists with NSZ Single Permit documentation and Ministry of Internal Affairs residence permit (MUP - Ministarstvo unutrašnjih poslova) coordination for foreign-national hires
• Helps with offboarding administration, including notice periods, written warning documentation, severance calculation, and final settlement as required under the Labour Law

Types of visas in Serbia

Serbia's visa policy is administered by the Ministry of Foreign Affairs (MFA) under the Law on Foreigners. The right visa depends on nationality, purpose of visit, and length of stay.

Standard documentation for a D visa (employment grounds)

• Valid passport, with at least 90 days of validity beyond the intended date of departure, at least two consecutive blank pages, and issued within the past 10 years
• Completed visa application form
• Recent photograph
• Proof of paid visa application fee
• Proof of medical insurance
• Proof of sufficient funds for the stay
• An invitation letter from a Serbian employer, plus the employment contract or other documentation of the employment relationship
• Supporting documents specific to the employment ground, including the NSZ assessment for the Single Permit

The D visa application fee is 50 EUR (paid in RSD at the National Bank of Serbia NBS middle exchange rate). The C visa application fee is 90 EUR. Holders of passports of China, Armenia, Mali, and Syria are exempt from visa fees per bilateral agreements.

Foreign hires in Serbia need an MFA-issued entry visa (typically a D visa), the NSZ assessment for the Single Permit, and a Ministry of Interior temporary residence permit, each with separate filings, processing times, and fee schedules across three different authorities.

Skuad assists with work authorisation documentation as the legal employer in Serbia, so your foreign hires can be onboarded without your team coordinating MFA, NSZ, and the Ministry of Interior independently.

See how Skuad supports work visa documentation for your foreign hires in Serbia.

Work permits

To work in Serbia, it is essential to have a work permit. Since February 2024, Serbia has merged the work permit and residence permit into a single document, the Single Permit (Jedinstvena dozvola), issued by the Ministry of Interior (MUP) after an assessment by the National Employment Service (NSZ).

It is practically impossible to get a Serbian work permit without a job offer. The Single Permit is issued on grounds of employment (employment contract or similar agreement granting Labour Law rights), self-employment, movement within a company (intra-company transfer), referred person, independent professional, or training and development.

Application process

Before submitting the required application form to the National Employment Service, employers must declare a lack of Serbian employees working on the said posts. Once it is proved that the local workforce is not available for work, employers can hire foreigners and apply for Serbian work permits for foreigners.

• Vacancy Registration Form (PPZ): The employer files the PPZ form with NSZ to initiate the labour market test. The PPZ form can be filed via euprava.gov.rs or via the Welcome to Serbia portal when submitting the Single Permit application
• NSZ assessment: NSZ confirms whether a qualified Serbian or domestic worker is available for the role. For occupations on the shortage list, this step is skipped
• Single Permit application: Submitted exclusively electronically through the Welcome to Serbia portal. Either the foreign national or the employer can submit. If the employer submits, the employer must be registered on the eGovernment portal with the "Working with Foreign Citizens" role assigned
• Biometrics: Fingerprints and digital photograph at MUP
• Single Permit issued: As a biometric card, valid for up to 3 years and extendable for the same period

Documentation

Documentation requirements are set in the Rulebook on Single Permit Issuance for Foreign Nationals' Temporary Residence and Work (Official Gazette of the Republic of Serbia No. 6/2024). The Welcome to Serbia portal lists the exact documents required for each ground of stay. For employment grounds applications, the standard set includes:

• Valid passport
• Employment contract or other contract granting Labour Law rights
• Proof of paid Single Permit fee and submission fee
• NSZ assessment of the labour market test (where required)
• Proof of accommodation in Serbia
• Proof of medical insurance
• Other documents specific to the grounds and the foreign national's situation

Fees

The Single Permit fees are:

The cost of the Single Permit can be borne by the employer or the foreign worker, depending on their agreement, per Serbian law firm guidance.

Validity, renewal, and changing employers

Single Permits are valid for up to 3 years and can be extended for the same period through the Welcome to Serbia portal before expiry.

Foreign nationals who want to change employer, work for two or more employers, or change the grounds on which the Single Permit was issued require NSZ approval, with NSZ deciding within 10 days of a complete application.

The employment contract automatically ends when the Single Permit expires. The foreign national then has a 30-day grace period to sign a new contract or risk violating immigration laws.

Special cases

• Shortage occupations: NSZ labour market test skipped entirely. Direct entry into the Single Permit phase at MUP
• Seasonal work: A separate regime under the 2023 amendments covers seasonal work in agriculture (1 March to 30 November) and hospitality (coastal facilities, spa centres, mountain destinations). The seasonal Single Permit is issued for up to 6 months per calendar year
• Family reunification, clergy, religious workers, humanitarian activities: Reduced or exempt fees, per Serbian law firm guidance

Hiring foreign nationals in Serbia layers the NSZ labour market test via the PPZ form, the Single Permit application via the Welcome to Serbia portal, MUP biometrics, and ongoing renewal and employer-change notifications. Each filing sits with a different authority, and the procedural cadence has tightened under the February 2024 reform

Payroll and taxes in Serbia

Serbia's tax administration runs through the Tax Administration of Serbia (Poreska uprava). Foreign employers running payroll in Serbia need to handle Personal Income Tax withholding, mandatory social contributions across three insurance funds, the annual supplementary tax for high earners, and corporate filings where applicable, each with its own rate, cap, and filing schedule.

Personal Income Tax (PIT)

Personal income tax on employment is a flat 10%. The tax is calculated on gross salary minus mandatory employee social contributions and minus the non-taxable monthly amount. For 2026, the non-taxable monthly amount is RSD 34,221 (approximately EUR 290). The non-taxable amount is updated each year by the Tax Administration ordinance.

PIT is withheld at source by the employer and remitted to the Tax Administration by the 15th of the month following the salary payment.

Resident-tax basis: Serbian tax residents are taxed on their worldwide income. Non-residents are taxed only on Serbia-sourced income. A person is a tax resident if they have a permanent home or centre of personal and economic interests in Serbia, or spend 183 or more days in Serbia in any 12 months.

Annual supplementary tax for high earners

On top of the flat 10% PIT, individuals whose total annual income exceeds three times the average annual salary pay an annual supplementary tax:

For the 2025 tax year, the entry threshold was RSD 5,439,096 (~EUR 46,500). The 2026 figure adjusts with the updated average annual salary published by Serbian statistics. The annual return is filed electronically using form PP-GPDG via the ePorezi portal by 15 May for the prior tax year.

Taxpayers under 40 receive an additional deduction equal to three average annual salaries on wages, self-employment, and royalty income.

Social security contributions

Mandatory social contributions in Serbia cover pension and disability insurance, health insurance, and unemployment insurance. The breakdown for 2026 per the Tax Administration framework:

Contributions are calculated on gross salary, capped at five times the average monthly salary published by Serbian statistics. For 2026, the maximum monthly contribution base is RSD 732,820 (~EUR 6,250), and the minimum monthly contribution base is RSD 51,297. The cap and floor are updated annually. The annual maximum contribution base for 2026 is RSD 8,793,840.

Newly-settled taxpayer incentive

Foreign hires under 40 who have not resided in Serbia for the 24 months before signing a Serbian employment contract may qualify as a "newly-settled taxpayer," which allows a 70% reduction on the tax base and mandatory social contributions for up to five years. The incentive requires a minimum gross monthly salary.

For 2026, the minimum salary threshold is RSD 439,692 (~EUR 3,730) for newly-settled taxpayers, or RSD 293,128 (~EUR 2,485) for those under 40 who lived abroad for further education or professional training in the 12 months before signing the contract.

Past service increment (minuli rad)

Serbian Labour Law requires a minimum 0.4% salary increase per full year of service, counted from years worked with the current employer only (not previous employers, per the 2014 Labour Law amendments). There are no statutory entitlements to a 13th salary, Christmas bonus, or similar mandatory annual pay.

Estimate the cost of a Serbian hire

Estimate is between PIT withholding at 10% (or progressive supplementary rates for high earners), employer social contributions at 15.15% capped at five times the average monthly salary, the past service increment of at least 0.4% per year, and the Newly-Settled Taxpayer Incentive, where it applies, the true employer cost of a Serbian hire is meaningfully different from the gross salary alone.

Setting up Serbia payroll in-house means opening a Tax Administration of Serbia (Poreska uprava) account, registering for compulsory social insurance via the Central Registry of Compulsory Social Insurance (CROSO) covering PIO Fund, RFZO, and the unemployment fund.

Setting up monthly PIT withholding due by the 15th of the following month, plus the annual PP-GPDG filing by 15 May for any employees triggering the annual supplementary tax.

Each filing sits with a different statutory authority, and missing one carries direct penalty exposure under the relevant Act. Skuad acts as the legal employer in Serbia, so your team can pay your Serbian and foreign-national employees without opening a Tax Administration account or registering separately with each authority.

Book a demo to see how Skuad supports Serbia payroll and statutory compliance.

Incorporation: How to set up a subsidiary in Serbia

When you start your business in Serbia, you are required to incorporate a company here. Companies in Serbia are registered with the Serbian Business Registers Agency (SBRA / APR Agencija za privredne registre), which functions as a centralised electronic window for incorporation. The framework operates under the Companies Act, with key amendments adopted in 2024.

Foreign investors in Serbia can choose from several legal forms:

• Limited Liability Company (D.O.O. Društvo s ograničenom odgovornošću): The overwhelming choice for foreign investors. Limited liability for shareholders, minimum share capital of RSD 100 (~EUR 1), and a maximum of 50 shareholders per company
• Joint Stock Company (A.D. Akcionarsko društvo): Used for larger entities planning capital markets activity. Minimum registered capital of RSD 3,000,000. Can be open (publicly traded) or closed
• Sole Proprietorship (Preduzetnik): Simpler structure for individual entrepreneurs, but the entrepreneur is personally liable for all business debts
• General Partnership (O.D. Ortačko društvo) and Limited Partnership (K.D. Komanditno društvo): Used less commonly, mainly for professional services
• Branch Office and Representative Office: Available to foreign companies that prefer not to set up a separate Serbian legal entity. A branch can carry out commercial activities, whereas a representative office cannot.

For most foreign employers setting up a subsidiary in Serbia, the D.O.O. is the default choice.

Incorporation process

The D.O.O. incorporation process runs:

• Name check and reservation: Verify availability through the Serbian business registers agency (APR Agencija za privredne registre) company name database. Name reservations are valid for 60 days.
• Founding act and documentation: Draft the Memorandum of Association, founding decision, director appointment documents, and registered office confirmation
• APR registration: Submit the integrated electronic application through the APR portal, along with all required documents. Certified Serbian translations are required for foreign-language documents
• APR decision: The APR issues the incorporation decision and assigns the company its registration number (matični broj) and tax identification number (PIB)
• Bank account: Open a corporate bank account with a Serbian bank using the APR registration decision
• VAT registration, if required: Register for VAT (Value-Added Tax) with the Tax Administration where annual turnover exceeds the statutory threshold or where voluntary registration is beneficial
• Social insurance and Tax Administration registration: Register the company and any initial employees through the Central Registry of Compulsory Social Insurance (CROSO)

Fees and timeline

The APR administrative fee is RSD 5,900 (~EUR 50) for online registration or RSD 6,500 (~EUR 55) for the classic in-person procedure. Total realistic incorporation costs, including notary certification, certified translations, and legal assistance, range from EUR 500 to EUR 1,500.

The APR issues the incorporation decision within 3 to 5 business days of a complete submission. The full process, including documentation preparation and bank account opening, typically takes 10 to 15 business days.

Foreign ownership and remote incorporation

There are no restrictions on foreign ownership of Serbian companies. A foreign founder can hold 100% of a D.O.O.'s shares. The entire incorporation process can be completed remotely by an authorised representative on the basis of a special power of attorney, with no requirement for the founder to be physically present in Serbia.

For founders intending to apply for a temporary residence permit based on their position in the company, a minimum capital contribution of EUR 250 is recommended, even though the statutory minimum is RSD 100.

Setting up a Serbian subsidiary involves APR registration, founding documentation, certified translations, Memorandum of Association notarisation, corporate bank account opening, VAT registration where applicable, and CROSO registration for any first hires.

The mechanical cost is modest at EUR 500 to EUR 1,500, but the calendar runs 10 to 15 business days at a minimum, and the ongoing administrative burden (annual accounts filings, statutory audits where applicable, board governance) sits on the foreign parent for the life of the entity.

Skuad acts as the legal employer in Serbia, so foreign employers can hire and pay Serbian and foreign-national employees without setting up a D.O.O. with APR or carrying any of the ongoing entity maintenance.

Book a demo to see how Skuad supports your first Serbia hire without entity setup.

Professional Employer Organization (PEO) vs. EOR

A Professional Employer Organization (PEO) is a US-origin model under which the PEO provider acts as a co-employer alongside the client company. The client retains legal-employer status, the PEO administers payroll, benefits, and HR compliance, and the two share employment responsibilities under a co-employment arrangement.

To use a PEO model, the client must already have a registered business entity in the country where the workers sit.

An Employer of Record (EOR), by contrast, is the sole legal employer for tax, payroll, and statutory compliance purposes. The client directs day-to-day work, but the EOR holds the employment contract, runs payroll, files contributions, and handles termination paperwork. The foreign client does not need to set up a local entity.

EOR vs PEO

For most foreign employers entering Serbia, the choice is between setting up a local D.O.O. (and then potentially using staff leasing on top) or running everything through an EOR that already operates in Serbia.

The EOR route removes Serbian Business Registers Agency incorporation, corporate bank account opening, ongoing accounting and tax filings, and Labour Law termination exposure from the foreign parent.

EOR services in Serbia simplified

Serbia's employment framework layers Labour Law obligations on contracts, working time, leave, and termination, monthly social insurance filings across the PIO Fund, RFZO, and the unemployment fund via CROSO, Personal Income Tax withholding with the Tax Administration of Serbia, NSZ Single Permit filings for foreign hires under the February 2024 reform, and Labour Law procedural requirements for any dismissal.

Getting any of these wrong triggers Tax Administration penalties and exposure to damages of up to 36 monthly salaries at the Labour Court. Skuad helps support that operational complexity from a single platform across 160+ countries, with employment contracts in Serbian aligned with the Labour Law, payroll in 70+ currencies.

Helps in RSD processing and statutory contribution workflows, immigration support for NSZ-MUP coordination, and termination assistance under Labour Law procedural requirements, so your team can focus on building the Serbia operation.

Companies across IT and software development, gaming, BPO, and nearshore services, and AI use Skuad to access Serbia's English-fluent tech talent market in Belgrade and Novi Sad without local entity registration or ongoing corporate compliance overhead.

Start hiring in Serbia without setting up a local entity. Book a demo

FAQs

1. What is an employer of record in Serbia?

An Employer of Record (EOR) in Serbia is a third-party organisation that acts as the legal employer for tax, payroll, and statutory compliance. The EOR holds the employment contract, files PIT with the Tax Administration of Serbia, and registers social insurance through CROSO under the Labour Law.

2. How much does an EOR in Serbia cost?

EOR pricing in Serbia typically falls between EUR 400 and EUR 700 per employee per month, on top of gross salary. Employers also pay social contributions of 15.15% (pension 10%, health 5.15%, unemployment 0%), capped at five times the average monthly salary.

3. Can a foreign company hire in Serbia without setting up a local entity?

A foreign company can hire Serbian and foreign-national employees through an EOR like Skuad, without registering a D.O.O. with the Serbian Business Registers Agency (APR). The EOR acts as a legal employer and carries the Labour Law obligations.

4. What happens if a contractor is misclassified in Serbia?

The Serbian Tax Administration applies a 9-criterion Independent Contractor Test introduced in 2020. Failing 5 or more reclassifies the engagement as employment, with retroactive PIT at 10%, employer contributions of 15.15%, employee contributions of 19.9%, plus interest and penalties.

5. EOR vs setting up a D.O.O. in Serbia: which is better?

For foreign employers hiring fewer than 15 employees, an EOR is usually the faster route. A D.O.O. setup costs EUR 500 to EUR 1,500 and takes 10 to 15 business days with APR, plus ongoing annual accounts and audit obligations. An EOR onboards a hire in days with no entity overhead.

6. How long does it take to onboard a Serbian employee through an EOR?

A Serbian national can be onboarded in a few business days once the contract is signed and CROSO registration is filed. Foreign-national hires add two to six weeks for the NSZ labour market test, the Single Permit application via the Welcome to Serbia portal, and MUP biometrics.