Introduction to Payroll in Serbia
Serbia is one of the rapidly growing countries in the Balkans that has much to offer talent-wise. Enriched with a well-educated workforce with good English skills, Serbia makes an excellent destination for companies looking to expand their global reach. However, most foreign recruiters still need expert help to find the top talent in the country and navigate the complexities of local laws, payroll regulations, and taxes.
Fortunately, Skuad has the knowledge you need to understand and navigate the Serbia payroll taxes, compensation requirements, and labor laws. We combine legal expertise and cutting-edge payroll management software to aid you in onboarding new hires, running global payroll securely, and staying compliant with ease.
All you need to do is reach out to our legal compliance experts at Skuad, and we'll help you unlock payroll in Serbia.
Payroll Process in Serbia
With a possible few exceptions, the payroll process is straightforward and similar in most countries in the world. It includes three main phases:
- Payroll calculation
No matter where you plan to do business, you need to go through the pre-payroll phase to set up basic processes and activities. It will allow you to manage your payroll and operate your entire business successfully. Here's how you can set up your organization within the pre-payroll phase:
Every business needs a registered number so regulatory authorities can use it for different tax compliance, auditing, and communication purposes. Before starting any business operation, ensure your company is officially and formally registered and has a unique business number or code.
Similarly, a business location is essential for your registration process. If you have one or multiple business addresses, make sure any one of them you use for business purposes is officially and formally registered according to local registration laws and regulations.
Calculating payroll requires accurate and timely information about all pay structures and leaves (such as sick and parental leaves). To stay compliant and manage staff performance, develop a clear and formalized company-wide leave policy.
Your business also needs an attendance policy to stay compliant and manage staff performance. The policy should calculate attendance according to regular work hours, shift hours, absences, and more. Biometric devices can help with gathering the required data.
Understanding statutory components is fundamental to staying compliant anywhere, including Serbia. As an international employer, you need to fully embrace payroll laws in Serbia and all mandatory regulations providing for basic statutory rights.
In Serbia, international employers should be familiar with the Labor Law of 2005, minimum wage, working hours, overtime, and more, so you stay compliant.
Another step in the process includes adjusting pay structures, allowances, and benefits according to local laws but based on your corporate requirements, capabilities, and needs. The right salary design will help you stay compliant and attract and retain the right talent for your growing business.
Paying employees and independent contractors on time is a standard statutory requirement anywhere. Labor laws, regulations, and policies usually specify whether salaries or wages should be paid monthly, weekly, or hourly.
The payroll process is data-intensive and requires collecting various employee information (full name, role, department, subsidiary, etc.) to process diverse payroll requirements. Moreover, employee information is essential for internal record-keeping, auditing, compliance, and reporting purposes.
Payroll Calculation Phase
Once you go through the pre-payroll phase, the time will come to start calculating payroll. The process involves taking into account a variety of payroll components to process payments and stay compliant, such as compensation, withholdings, social benefits, deductibles, and more.
Companies are increasingly shifting from paper-based to automated payroll calculations. Whatever option you choose, only make sure you perform payroll calculations correctly and timely. A payroll provider in Serbia can help you with the entire process.
Having laid the ground for payroll compliance, you can move on to finalizing the payroll process. Here's what this stage involves:
First and foremost, you should align your payments with the previously performed payroll calculations and schedules. There are several ways you can do so.
You can use a conventional corporate bank account or an automated deposit process. Alternatively, you can use payroll services in Serbia to process salary payments. Serbia payroll providers usually offer a full scope of payment services to give you more options and simplify the process.
As part of record-keeping and compliance management procedures, you need to account for salary or wage payments and all payroll-related expenses.
Depending on your budget and internal corporate policies, you may perform accounting in-house or opt for payroll outsourcing in Serbia.
Payroll Reporting and Compliance
Finally, you fill in tax forms and report all required payroll details such as compensation, withholdings, social benefits, allowances, and deductibles. As an international employer operating in Serbia or using an employer of record such as Skuad, you must consider important tax administration matters such as deadlines, reductions, social security contributions, and salary tax returns.
One thing to consider here is that payroll compliance requirements and forms are usually excessive and tend to change over time. Fortunately, Skuad can help you stay informed and compliant in all situations.
Payroll Processing in Serbia
To process payroll in Serbia, you need to perform a wide range of activities, including but not limited to adding up salaries or wages, withholding deductions and social insurance, filling and returning suitable tax forms, and more. This is a complex group of tasks you may need help with in the long term. Partnering with a global HR company with relevant legal expertise and experience can be invaluable in these situations.
Payroll Processing Company in Serbia
Skuad is your go-to employer of record to process and manage your payroll needs in Serbia. We simplify international hiring and payments, so you don't have to bother with complex regulations and can focus on growth and revenue. Schedule a demo today to experience first-hand how we can help you with payroll in Serbia.
Payroll Components in Serbia
The Labor Law of 2005 establishes all labor relations in Serbia. Here's a summary of payroll components you must know to hire and pay employees in Serbia:
- Set at a minimum of RSD 143.00 (USD 1.30) per hour
- 40 hours per week — 18+ years old employees
- 35 hours per week — employees under 18 years old
- 12 hours — minimum daily rest
- 24 hours — minimum weekly breaks
- 6-9 months — minimum-to-maximum annual redistribution of working hours based on the collective agreement
- 26% of base salary or wage — for any overtime work
- 24 hours additional weekly rest — in case an employee works during their weekly rest
- 110% — for work on public holidays
- RSD 60,000 (USD 545.16) to RSD 1,500,000 (USD 13,628.88) — per-offense penalty on legal entities in case of non-compliance with overtime regulations and rules
- RSD 200,000 (USD 1,815.61) to RSD 400,000 (USD 3,631.23) — per-offense penalty on entrepreneurs in case of non-compliance with overtime regulations and rules
The social security contributions in Serbia are specified for employers and employees as of January 1st, 2021:
- 11.5% — pension and disability insurance
- 5.15% — health insurance
- 14% — pension and disability insurance
- 5.15% — health insurance
- 0.75% — unemployment insurance
Paid as an average salary or wage:
- 100% — for a period of up to 30 days annually
- 65% — for 12 months due to the injury or incapacity incident caused outside work
- 100% — for 12 months due to the injury or incapacity incident caused at work or for work-related reasons
Parents in Serbia are entitled to paid annual leaves as follows:
- 365 days — for pregnant women and childcare purposes
- 28-45 days — for pregnant women before childbirth
- 90 days — for women after childbirth
- 7 days — for men per year for childcare purposes
The public and non-working holidays in Serbia include:
- January 1st and 2nd — New Year's Day
- January 7th — Julian Orthodox Christmas
- February 15th and 16th — Statehood Day of the Republic of Serbia
- May 1st and 2nd — Labor Day
- November 11th — Armistice Day
Serbia also celebrates Orthodox Easter Holiday for three days (Good Friday, Holy Saturday, Easter Day, and Easter Monday). The date for this holiday changes each year according to the Julian calendar but is usually in April.
The Serbia employer payroll taxes can vary but are usually set at a flat rate of 10%-20%, depending on profession classification.
- Peaceful Settlement of Labor Disputes Act of November 15th, 2004 — provides for requisites of settlement of collective and individual labor-related disputes, rights, and commitments of arbitrators.
- Law on Conditions for Sending Workers Abroad for Temporary Work and Their Protection of November 3rd, 2015— specifies rights to workers on temporary work abroad and relevant stipulations, commitments, and procedures required from employers.
Employee Benefits in Serbia
No additional benefits or perks are provided to employees in Serbia in addition to mentioned statutory benefits. Therefore, you have a chance to include attractive payroll and benefits in employment contracts when hiring from Serbia. It will help you attract and retain the best talent from the country.
Payroll in Serbia Made Easy
Payroll in Serbia may sound daunting at first glance, especially if you don't know much about the country, let alone local labor laws and currency rates (RSD against USD is 0.0091). Getting to know the entire labor and tax law system of another country is neither simple nor exciting. But you don't have to go through it alone.
At Skuad, we do all the hard work for you, so you don't need to worry about compliance and penalties risks. We help you stay accurate and compliant, all while designing the most attractive packages to attract talent in Serbia.
Reach out to Skuad today and discover all the details about our highly effective and affordable services.