Employer of Record (EOR) in Serbia

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Employer of Record in Serbia

Skuad’s Employer of Record Serbia (EOR) solutions make business expansion to Serbia easy and hassle-free. Our unique HR platform allows companies to hire exceptionally talented employees in Serbia, without having to set up a separate legal entity. It streamlines the process of hiring and onboarding a remote team by handling payroll management, taxation, and other legal compliances. Learn more

Serbia At A Glance

The Republic of Serbia is a European nation, landlocked from all sides by Central and South-eastern European countries. The key highlight of the Serbian economy is that it is developing, characterized by upper-middle income range. Services, industry, and agriculture are the three main pillars of the economy here. Interestingly, the country is ranked 52 on the Social Progress Index, 51 on the Global Peace Index, and 64 on the Human Development Index. Over the past two decades, the country has attracted commendable FDI – to the tune of $40 billion.

Estimated population: 8,704,436 (2021)

Currency: Serbia Dinar (RSD)

Capital: Belgrade

Languages frequently spoken: Serbian

GDP: $41,431,648,801 (2017)

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Employment In Serbia

When hiring in Serbia, foreign companies need to be well-versed with the labor laws of the land with clear knowledge of various statutory obligations expected from employers. When you work with an EOR in Serbia, it allows you to remain focused on your core expertise to achieve business results. Since human resources are integral to a foreign business's success in the country, an optimized EOR Solution is what you need for cost-effective expansion.

Here are some facets of the Serbian labor laws:

Main statutes and regulations of employment in Serbia

  • The Ministry of Labor, Employment, Veteran and Social Affairs is responsible for the Labor Law.
  • The Serbian Constitution and the Labor Act are the main sources of employment law in Serbia.
  • The Central Ministry is also responsible for regulations related to minimum wage, average salary, safety at work, healthy working conditions, working hours, rest period, paid annual holidays, termination, fair remuneration, and special protection for women, disabled individuals, and young people.
  • The Vojvodina Labor and Employment ensures proper implementation of strategies and action plans and is regulated by the Provincial Secretariat for Economy and Tourism.
  • Local municipalities ensure proper implementation of the action plans by promoting a conducive working environment. The Local Employment Councils or LECs also have the responsibility of evaluating the local labor market and play a dynamically active role in implementing the National Employment Strategy, human resource development, and more.

The Employment Act – Articles

Items Explanation
Article 1 This regulates all the rights, including the responsibilities and duties of employment in Serbia.
The employee and the employer must have a collective agreement and employment contract, which, in turn, regulates all terms of the employment.
Article 2 This Article applies to local and foreign employees working in Serbia, employees working in government agencies, local governments, public services, and the transport sector.
Article 3 An employee handbook or an employment contract regulates all terms.
Article 5 to Article 7 This article describes the meaning of terms such as the employer, Trade Union, and association of employers.
Article 8 to Article 11 These Articles describe the Mutual Relations between the Act, Collective Agreement, Employee Handbook, and Employment Contract.
Article 12 – Article 14 This Article describes the Rights of Employees. For example, when a woman employee is pregnant, she has special protection. Additionally, employees under 18 years of age and disabled employees have special protection and entitlements.
  • Article 13 categorically mentions negotiating collective agreements and resolving labor disputes.
  • Article 14 mentions employee participation in profits earned by the business entity.
Article 15 This Article mentions the duties expected of employees. These include the following.
  • Performing the job in good faith
  • Always being respectful at the place of work
  • Sending a notification to the employee in exceptional circumstances
  • Informing the employee in case of any danger at the workplace
Article 16 This article lists the obligations of employers. Some of the obligations include the following.
  • Paying a salary to employees, as agreed and in compliance with the existing laws
  • Ensuring safety at work, protecting the health and life of employees
  • Keeping employees informed about the conditions of work
  • Involving the trade union, wherever required
  • Making sure that employees work and perform as per the employment contract
Article 17 The duties of employees and employers have been mentioned in this article.
Article 18 to Article 23 This Article talks about the ban on discrimination. In Serbia, employers cannot discriminate based on their sex, race, skin color, age, health conditions, language, family obligations, marital status, sexual orientation, social background, political beliefs, and financial status.
Article 23 specifically talks about legal recourse that employees can take in case of any discrimination.
Article 24 – 29
  • These articles establish the conditions for an employment relationship.
  • As per these Articles, employees in Serbia need to be at least 15 years of age. When employees are under 18 years of age, it is mandatory to seek written permission from the parent or guardian. Also, the work should not be of such nature that it puts the individual's health, education, or morality at risk.
  • Employers employing 10 or more employees need to have a Rule Book that mentions the employee names, job descriptions, required qualifications, and level of qualifications.
Article 30 – Article 33 These Articles stipulate the employment contract details. The contract is concluded only when signed by either party. Three copies of the contract need to be executed – the employer keeps one and the employee keeps the other two.
The employment contract is of two types, for a definite period or an indefinite period. Details in the employment contract include the following.
  • Employer name and seat
  • Employee name with contact details
  • Level of qualification
  • Description of job activities
  • Location of work
  • Relationship status – definite or indefinite
  • Start date of work
  • Working hours
  • Salary determinants
  • Salary payment deadlines
Article 34 – 35 These two articles mention the duties and the rights of the employees.
Article 35 also specifies that the employer must mandatorily file for a joint application for social insurance.

Other terms and details are mentioned in the Serbian labor laws.

Entitlements Explanation
Working hours
  • Article 51 mentions that the full-time working hours in Serbia are 40 hours a week and cannot be less than 36 hours a week in special cases.
  • As per Article 55, a working week consists of five working days consisting of eight hours a day.
  • As per Article 56, all changes in work schedule and timing need to be informed to employees at least five days before the intended change.
Overtime Eligibility Article 53 mentions that employers can ask employees to work overtime in a force majeure or in cases where it is essential to complete unplanned work.
However, overtime cannot be more than eight hours weekly. In addition, employees cannot work more than 12 hours daily.
Night-time work Article 62 mentions that all work performed between 2200 hours to 0600 hours is termed as night-time work.
Employers need to consult with Trade Unions about safety measures during night-time work.
Rest periods and leaves
  • Articles 64 to 78 cover leave and rest periods.
  • Employees working for six consecutive hours get a rest period of 30 minutes. For employees working for more than 10 hours, 45 minutes of rest are entitled.
  • Employees working between four to six hours are entitled to 15 minutes of rest.
  • All employees get 12 hours of rest in a day.
  • A weekly rest of 24 straight hours is mandatory for all employees. It is usually marked for a Sunday.
  • Employees are entitled to 20 workdays of annual leave every year.
  • Annual leave can be taken in one or two parts.
  • Paid leaves: A total of five days are granted as paid leave during a calendar year. The conditions when the employee gets paid leave include the death of a family member, childbirth, marriage, and the severe illness of an immediate family member.
Article 79 – Stay of employment The terms of employment remain operational even when an employee is absent from work to join the military, is assigned to work abroad, is elected, or is sentenced to imprisonment.
Protection of employees General Protection clauses are mentioned in Articles 80, 81, and 82.
  • The basic entitlement of employees is to work in a safe and healthy work environment.
  • Personal Data Protection is mentioned in Article 83. Employers need to let their employees inspect papers containing personal data.
  • Also, employers are not allowed to make employee data available to third parties.
  • The protection of youth is mentioned in Article 84. Employees under the age of 18 years cannot be involved in physical labor, at sites exposed to harmful radiation, in underground work, in underwater work, or work at a greater height and altitude.
  • Article 87 mentions that such employees cannot work for more than 35 hours every week.
Protection of Motherhood and Maternity Leave The provisions for these benefits are mentioned in Articles 89 to 95.
  • Pregnant women employees or those breastfeeding a child cannot work in harmful conditions for the mother and child.
  • Such employees will not work overtime or night shifts.
  • Such employees are entitled to paid leaves for medical examinations.
  • Leave of absence of 365 days is granted to women who are pregnant, after childbirth, or while nursing a child.
  • Maternity leave can be availed 28 to 45 days before childbirth and ends three months after the child's birth.
Caring for a child or another person One of the parents of a child who is less than five years of age and with psycho-physical impairment is entitled to be absent from work or work half-days.
Salary Articles 111 to 117 contain provisions relating to the salary and wages of an employee.
  • The Social and Economic Council decides the minimum labor price.
  • The decision is then published in the Official Herald of the Republic of Serbia.
  • Employers need to give their employees a pay statement every month mandatorily.
Other Earnings Besides their salary, employees are entitled to retirement gratuity, funeral expenses in the event of the death of a family member, and damage compensation in case of an injury at the workplace.

The Serbian labor law has many more Articles that lay down rules about employers' and employees' relationships. For ensuring that your hiring process is compliant with the obligatory laws, speak to Skuad experts today.

Contractors vs. Full-time Employees

As per the labor laws, an employment contract in Serbia is the key to differentiating between a contractor or an employee. The employment agreement in Serbia is prepared in compliance with the Labor Act and should include details about the salary, benefits, compensation, leaves, etc.

The labor law also mentions contractual relationships, of which the service agreement is the most commonly used. The employer can hire contractors under a service agreement only for activities that do not fall under the purview of their business activity. The contractors are free to stipulate the agreement terms; however, the minimum guarantees for employees do not apply to contractors. The Obligations Act predominates the terms of a service agreement.

There are also several differences in taxation and social security obligations in both the types of agreement – employment and service.

Hiring In Serbia

To hire employees in Serbia, your business needs to be incorporated in Serbia, or you can hire through an Employer of Record in Serbia. Since you are new to the country, you can use the services of hiring companies in Serbia to ensure that you get the right talent for your organization. you can use online resources like job portals to spearhead your hiring process. Some of the popular and top online job sites in Serbia are Balkan Job Finder, Nadji Posao, National Employment Service, Ogledalo, Firme, Glassdoor, Hello World, and Startit Poslovi.

The process can be long-drawn when you go the incorporation way, not to forget the legal hassles, bureaucratic, and administrative processes involved. An EOR or PEO like Skuad can make a crucial difference to your hiring and talent recruitment process in Serbia.

Probation & Termination

Probationary Period in Serbia

  • Article 36 of the Labor Law deals with probation. 
  • The employment contract should mention the standard probation period in Serbia. 
  • The probationary period is valid for a maximum period of six months.

Termination of employment Serbia

Articles 175 to 177 talk about termination of employment.

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

  • The expiry of the contract term
  • When the employee is 65 years of age
  • On mutual agreement between employer and employee
  • On the cancellation of the contract
  • 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 any other case

EOR Solution

Skuad’s EOR solution helps new businesses traverse the difficult and complex HR landscape in Serbia with incomparable agility and swiftness. An Employer of RecordEOR is a business entity that works on your behalf and handles all HR functions end-to-end. It includes hiring, onboarding, payroll, taxation, compensation, benefits, and compliance with local employment laws. Thus, if you plan to hire local or foreign workers, the best solution is to go ahead with an employer of record service in Serbia.

Skuad is one of the top Employer of Record companies in Serbia, covering all aspects of HR services including, but not limited to, work visas and work permits, hiring, payroll, salaries, benefits, payroll compliances, preparing employment contracts, termination, severance pay, and more. The platform acts as a single central tool for accomplishing your hire-to-retire services.

Types Of Visas In Serbia

There are two distinct types of work visas in Serbia.

Serbia Work Visa

  • C Visas that cover staying less than 90 days in Serbia.
  • D Visas that are for stays for more than 90 days in Serbia.

Serbia work visa requirements

To apply for a work visa in Serbia, it is mandatory to have the following.

  • Application form
  • Valid passport
  • Photos
  • Proof of medical insurance
  • Documents to prove funds in a bank

Along with this, the applicant needs to have an invitation letter from a company based in Serbia.

Work Permits

To work in Serbia, it is essential to have a work permit in Serbia. It is practically impossible to get a Serbian work permit without a job offer. 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.

Payroll & Taxes In Serbia

Setting up payroll and taxes in Serbia requires in-depth knowledge of the local policies and regulations, which comes with several risks and liabilities. Choosing Skuad for payroll outsourcing in Serbia can ease your resources and make the entire process straightforward and legally compliant. Learn more about our payroll services here.

Employer Taxation

Payroll taxes

There are three categories of Serbia payroll tax rates.

Head Employer % Employee %
Health Insurance 5.15% 5.15%
Unemployment Insurance 0 0.75%
Pension & Disability 11.5% 14%

Employee Taxation

Employee Income Tax

Employers deduct the employee’s income tax from the payroll. Natives of Serbia are taxed on incomes earned by them across the world, while foreigners are taxed for their earnings in Serbia. The Personal Income Tax starts from 10% for employees earning RSD 457,012,800. All employees earning more than this amount are taxed at 25%.

Bonuses

The legislation does not require bonuses, but every year that Serbians work, they are entitled to a 0.4 percent salary boost.

Incorporation

When you start your business in Serbia, you are required to incorporate a company here. There are different entities that you can choose from

  • Limited Liability Company, Private or Public; and,
  • a Partnership – General or Limited.

The business opportunities in Siberia are growing as Siberia is a developing economy. However, incorporating a holding company in Serbia means that you need to thoroughly understand the incorporation process nitty-gritty and the Company Act in Serbia. For example, to start a Private Limited Liability Company here, the share capital is RSD 100, while the number of shareholders needs to be 50 or less. Similarly, there are other rules and regulations to keep in mind.

The best way is to work with Skuad’s EOR solution to avoid incorporating a holding company in Siberia and yet hire the best local talent here for your Siberian business.

Professional Employer Organization (PEO)

If you have chosen to expand your business in Siberia, you can consider choosing between an EOR or a professional employer organization in Serbia. While the former is an independent organization taking care of all your HR needs, the latter is a co-employer or a collaborator where you are at the helm of affairs. So, to use PEO services, you will need to register your business entity in Siberia.

Both cases are beneficial to you because all HR-related responsibilities are taken care of by another party so that you can focus on your core business. Skuad offers both types of services to our clients. It would be great to talk to you to know your exact requirements before we help you choose between our EOR solution and PEO services.

Conclusion

If you have shortlisted Serbia as a potential investment destination and are still deciding the best way to start your business there, you could do it on your own, or better still, take the help of an Employer of Record in Siberia. Speak to Skuad’s experts for more details and information.

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