Hire in Serbia: A Comprehensive Guide for 2026

Introduction

Employment in Serbia is governed by the Labor Law, with occupational safety, social insurance, dispute resolution, and employee data covered by separate statutes. The employer calculates, withholds, and remits both the employee's tax and contributions and its own. Serbia is not an employment-at-will jurisdiction, so companies that hire in Serbia need a legal ground to end any contract.

The numbers that decide the budget do not appear in the offer. Contributions on a reduced-hours role are calculated on a minimum base of RSD 51,297 (RSD-Serbian Dinar), even when the salary falls below it.

Redundancy severance accrues from day one at one third of a month's pay per completed year. Enforcement does not wait for a complaint, since a Labor Inspectorate finding alone carries a fine.

An Employer of Record (EOR) for employees, or an Agent of Record (AOR) for contractors, takes on the statutory filings and employer-side liability without a local entity. This guide covers entity setup, both routes, contract types, payroll and tax rates, leave, and full hiring cost.

How to hire remote employees in Serbia?

Hiring in Serbia runs through three routes: registering your own entity, engaging an Employer of Record (EOR), or working with contractors through an Agent of Record (AOR). The choice decides who signs the employment contract, who files payroll taxes, and who carries the compliance obligation.

How to hire in Serbia by setting up a local entity?

Setting up a local entity in Serbia refers to establishing a legal business presence. This allows you to operate independently, hire employees directly, and own property under your company's name.

Serbian law registers four company forms, and the limited liability company (DOO) is the practical one for a company hiring a team, with minimum capital of RSD 100. Once a complete application is filed, the registrar works to a deadline of 5 working days for a decision.

You may also open up a branch office in Serbia if your company already has a presence elsewhere.

A branch does not have the status of a legal entity, and in terms of tax liabilities it has the status of a resident. Registering one requires a signed statement from your company assuming responsibility for all liabilities arising in connection with the activity of the branch, so the exposure stays at parent level.

Either way, the Serbian entity signs the employment contracts, and payroll filing, tax remittance, and labor law compliance stay in-house from the first hire.

How to hire employees through EOR in Serbia?

Hiring employees through an EOR in Serbia is a way to employ workers without setting up a local legal entity.

An EOR acts as the legal employer on your behalf and assumes responsibility for onboarding, payroll and local tax filings, statutory benefits administration, and compliance with Serbian labor law. Day-to-day direction of the work stays with you, along with the calls on pay, scope, and headcount.

Registration in Serbia moves quickly, but the obligations that follow do not stop. From the first hire, the entity calculates and remits both employee and employer contributions, tracks the minimum contribution base, files through the E-Sick Leave portal that became mandatory on 1 January 2026, and carries an annual leave accrual that expires on 30 June. Each of those recurs every month.

Skuad helps remove that dependency. Skuad acts as the legal employer across 160+ countries, so your company can hire, onboard, and pay employees without registering a local entity or building in-house payroll infrastructure.

Here is what Skuad helps with:

• Employment contract generation across 160+ countries, aligned with local labor laws and statutory requirements
• Statutory contribution workflows across supported markets, covering applicable social insurance and pension obligations
• Payroll processing in 70+ currencies, with tax withholding and statutory deductions applied at the point of payment
• Statutory leave and benefits administration in line with local requirements across supported markets
• Termination and offboarding support, including notice periods and severance calculations as required locally
• Background verification covering identity, employment history, and criminal records before onboarding

For a small team in a single market, this usually weakens the case for standing up an entity purely to make the hires.

See Skuad's Serbia hiring guide for the full breakdown of local rules before you hire.

How to hire contractors through AOR in Serbia?

An AOR lets you engage contractors in Serbia without setting up a local legal entity. It acts as a third-party intermediary and assumes legal responsibility for your independent contractor workforce, covering worker classification, contract administration, payments and taxes, and labor law compliance.

Worker classification is the risk to watch here. Contractor work in Serbia is usually done under a service contract, and Serbian law permits it only for activities that are not part of the employer's core business, covering your main registered activity and anything else you actually do. Anyone engaged this way does not enjoy the rights granted to employees under an employment contract.

A service contract covering work inside your registered activity has an impermissible subject and is void, which leaves no valid basis for the engagement and a clean argument that the person was an employee throughout. That judgment gets made contract by contract, usually by whoever is closest to the hiring manager.

Skuad supports contractor engagement across supported markets.

Here is what Skuad helps with:

• Contractor onboarding with locally compliant agreements that help reduce misclassification exposure
• Worker classification checks that help flag engagement risk before an agreement is signed
• Invoice generation, approval workflows, and payment processing across supported markets
• Contractor payouts in 70+ currencies without manual reconciliation
• Contractor records, agreements, and payment history in one dashboard alongside full-time employees
• Conversion from contractor to full-time employee through EOR across 160+ countries

Compare EOR and contractor pricing for your Serbian hires.

What type of employment contract do you need?

Serbia recognizes several arrangements outside the employment relationship, including service contracts and supplementary employment. For someone you are actually employing, the choice is between two contract types.

An indefinite-term contract is the default form of employment, and a contract that does not specify the duration for which it is concluded is deemed to be an indefinite-term employment contract. No time limit applies, though Serbia is not an employment-at-will jurisdiction, so ending one requires a legal ground.

A fixed-term contract carries the rules that catch employers out. It is permitted only when justified by objective reasons, such as a temporary increase in workload, replacement of an absent employee, or work on a specific project, and it may generally not exceed 24 months.

That ceiling applies to the total duration of successive contracts with the same employee, with or without interruptions, and an interruption shorter than 30 days is not considered a break, so re-papering the arrangement does not reset the clock.

Breach the rules, or let someone continue working for at least five working days after the expiry of the contract, and the employment becomes indefinite by operation of law.

What are the employment laws in Serbia?

Serbia's employment law goes beyond a single labor law. Occupational safety, social insurance, dispute resolution, and personal data are each covered by separate statutes. Whatever route you hire through, you are required to inform employees about working conditions, organisational structure, and their rights and duties in the field of occupational health and safety.

What are the working hour rules in Serbia?

Overtime counts only when you ask for it. Self-initiated overtime work of an employee cannot be considered overtime work, which means no increased salary is owed. This matters for distributed teams, where someone working late at home creates no pay obligation unless you requested the hours.

What are the probation and termination rules in Serbia?

Probation gives you the widest room: it may not exceed six months, and either side can end the contract on notice no shorter than five working days, though the employer still has to give written reasons.

After probation, an employer may only terminate the employment contract for one of the four groups of reasons: the employee's work ability and performance, a breach of work duty, non-compliance with work discipline, or a valid reason relating to the employer's needs such as redundancy.

An employee resigning works to a different rule and can leave at any time on at least 15 days' prior notice, which a contract can extend but not exceeding 30 days.

Non-compete, discrimination, and data protection rules

A non-compete clause may be valid during employment and even up to two years after the end of employment, and only if you undertake to pay the employee compensation once the employment ends. Budget for it or leave it out.

Discrimination rules apply for your hiring process as well. They cover persons seeking employment as well as employees and apply to conditions for employment and selection of candidates, and any discriminatory provision in an employment contract is null and void.

Serbia's Personal Data Protection Law strictly regulates employee data collection, processing, and storage. You must have procedures to comply with these regulations. An employee who believes the rules were breached can complain to the Commissioner for Information of Public Importance and Personal Data Protection or go to court.

What are the payroll and tax rules in Serbia?

The official currency of Serbia is the Serbian Dinar (RSD). Salaries are negotiated in net terms and calculated in gross terms, and the employer carries the full obligation to calculate, withhold, and remit both the employee's tax and contributions and its own.

What is the minimum wage in Serbia?

Serbia sets the floor per hour, and for 2026, the minimum cost of labour is RSD 371 net per working hour, so the monthly minimum moves with the number of working hours in that month.

Every Serbian payroll run carries income tax, employee contributions, and employer contributions, at the rates below.

The number to budget against is what Serbian payroll calls Gross 2, the employer's total cost of employment, meaning the gross salary plus your own contributions. Budgeting from the net figure an employee negotiated will understate the cost every time.

The minimum contribution base is the other thing to watch. If gross salary is lower than the minimum base, contributions are calculated on the minimum base, which makes part-time and reduced-hours roles cost more than the salary alone suggests.

When do salaries and payroll taxes have to be paid?

Salary must be paid at least once a month, no later than the end of the current month for the preceding month. Income tax is withheld at the moment of salary payment, so the tax and the payroll run happen together rather than on separate cycles.

Candidates negotiate in net terms, and each layer between that figure and Gross 2 is one you calculate yourself, every month, per employee.

The Skuad employee cost calculator helps you estimate total employment cost before you make an offer, based on the market and salary figure you enter.

Estimate the total cost of a Serbia hire before you make the offer.

What are the statutory leave entitlements in Serbia?

Serbia's leave rules split cleanly into what you fund and what the state funds. Annual leave, public holidays, the first month of sick leave, and the short statutory absences all come out of your payroll. Longer illness and parental leave move to the state, which takes a meaningful cost off the table for anyone budgeting a Serbian team.

The table below covers what you need before you write a contract or plan capacity.

Two things worth planning around: the 30 June expiry, which means you carry an annual leave accrual on the balance sheet, and the E-Sick Leave portal, which every employer had to register for by 1 January 2026.

What are the Serbian public holidays in 2026?

Serbia has twelve national non-working holidays in 2026. Asking someone to work one costs at least 110% of the base salary.

What are the challenges of hiring in Serbia?

Serbia is easy to hire into. The friction shows up in three places: what a bad dismissal costs, how contractor work is papered, and whether a collective agreement already covers your industry. Each has a number attached, so each can be controlled for before the first contract is signed.

• Termination exposure: A dismissal is unlawful when no legal grounds existed, and equally when grounds existed, but the procedure was not followed. Courts award up to 6 salaries for a procedural error, up to 18 salaries where the employee does not want the job back, and up to 36 monthly salaries where reinstatement is not possible, with fines of RSD 800,000 to RSD 2,000,000 available separately on a Labor Inspectorate finding, without any lawsuit from the employee.
• Contractor misclassification: A service agreement concluded for the performance of jobs within the employer's business activity would have an impermissible subject and would therefore be void, leaving no valid basis for the engagement and a clean argument that the person was an employee throughout.
• Collective agreements: A trade union becomes representative at your company once it holds at least 15% of the total number of the employer's employees as members, and an applicable collective agreement is implemented directly, binds every employment contract, and cannot grant employees fewer rights than the Labor Law sets. Check whether a branch-level agreement already covers your activity before you set contract terms.

Two of these three carry a number that lands without a lawsuit. Legally valid grounds still fail if the procedure was not followed, so the exposure is as much about process as it is about the decision itself.

Skuad helps with that process layer. Skuad Shield supports compliance monitoring across supported markets, so your team is not tracking regulatory change on its own.

Here is what Skuad helps with:

• Compliance monitoring across supported markets, with updates as local employment requirements change
• Employment contract generation across 160+ countries, aligned with local labor laws and statutory requirements
• Termination and offboarding support, including notice periods, documentation, and severance calculations as required locally
• Statutory benefit and leave administration in line with local requirements across supported markets
• Worker classification checks that help flag engagement risk before an agreement is signed

What is the cost of hiring remote employees in Serbia?

Gross salary is only one part of the total cost. Employer contributions, mandatory expense reimbursements, and severance costs are additional to the amount agreed with the candidate.

What does an employee cost on top of gross salary?

Employer contributions add pension and disability at 10% and health at 5.15%, payable on top of gross salary rather than deducted from it.

Two things move that number. For 2026, the minimum monthly contribution base is RSD 51,297, and if gross salary is lower than the minimum base, contributions are calculated on the minimum base, so part-time roles cost more than their salary suggests.

Salary itself also creeps up, since every employee earns an increase of at least 0.4% of the salary base for each full year of work with you. Overtime, night work, and work on non-working holidays carry separate statutory premiums, but these apply only when employees perform such work.

Employee reimbursement expenses in Serbia

Reimbursements are separate from both salary and employer contributions. The mandatory list covers commuting at the amount of the public transportation ticket, business trip expenses, daily allowances for fieldwork, meal allowances, annual leave allowance, and work-from-home expenses.

The last one is the line to size for a distributed team. It covers the use of the equipment owned by the employee, as well as reimbursement of other costs, most commonly for utilities, such as electricity and internet bills. Since the law does not specify a minimum or maximum amount, you set the figures and document them.

One exit cost accrues from the first day. Redundancy severance cannot be lower than the sum of one-third of the employee's salary for each completed year of employment with you.

Hire in Serbia without setting up an entity

Serbia is one of the easier markets in the region to enter, and that is what catches employers out. Registration clears in days. The exposure arrives months later, in a fixed-term contract that turned indefinite by operation of law, a service agreement that was void from the day it was signed, or a dismissal that failed on procedure alone.

Each traces back to one decision made before anyone was hired: which route you hire through. That decision fixes who signs the contract, who files the taxes, and who answers when something is challenged.

An entity keeps all three in-house from your first hire. An EOR or AOR moves the legal employer relationship to a third party while your team keeps direction of the work, scope, and pay.

Skuad acts as the legal employer across 160+ countries and supports contract generation, payroll in 70+ currencies, and statutory filings from a single platform.

Book a demo to see how quickly Skuad can onboard your first Serbia hire.

FAQs

1. What does it mean to hire in Serbia through an EOR?

To hire in Serbia through an Employer of Record means the provider becomes the legal employer under Serbia's Labor Law, without you registering a local entity. It signs the employment contract, calculates and remits both employee and employer contributions, and carries labor law compliance while you direct the work.

2. How much does it cost to hire in Serbia beyond gross salary?

Employer contributions add pension and disability at 10% and health at 5.15% on top of gross salary. Two things push the figure up: contributions are calculated on a minimum base of RSD 51,297 even for lower-paid roles, and redundancy severance accrues from day one at one third of monthly pay per year.

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

A foreign company can hire in Serbia through an EOR for employees or an AOR for contractors, since both hold the legal employer relationship. Direct hiring requires registering a company such as a DOO, which clears in around five working days but brings monthly payroll filing and compliance in-house from the first hire.

4. What are the rules on fixed-term contracts when you hire in Serbia?

Fixed-term contracts are permitted only for objective reasons and generally cannot exceed 24 months total across successive contracts with the same person. An interruption under 30 days does not reset the clock, and letting someone work five days past expiry converts the contract to indefinite by law.

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

A service contract covering work inside your registered business activity generally has an impermissible subject and is void, leaving no valid basis for the engagement. That gives a clean argument that the person was an employee throughout, exposing you to back contributions, accrued entitlements, and Labor Inspectorate fines.

6. What does an unlawful dismissal cost when you hire in Serbia?

Serbia is not an employment-at-will jurisdiction, so a dismissal is unlawful with no legal grounds or where grounds existed, but procedure was not followed. Courts can award up to 18 salaries where the employee declines reinstatement, and Labor Inspectorate fines apply separately without any employee lawsuit.