Hire employees in Serbia
What a foreign company needs to know before employing people in Serbia: whether you need a local entity, what an employee costs on top of a 15.15% contribution rate, how the net hourly minimum wage and the PPP-PD return before every payment work, which allowances are mandatory, and why the independence test and the agency employment law shape how you structure a hire. Written for CHROs, CFOs, General Counsel and founders.
Quick answers
The questions leadership teams ask first.
Do I need a local entity in Serbia to hire?
No. There are three routes:
- Employer of Record. Dryft Global employs the person in Serbia through a compliant local employer, registers them with CROSO before day one, files the PPP-PD return before each payment and runs payroll. You direct the work.
- Direct local entity. You form a limited liability company (DOO), register with the Business Registers Agency and the Tax Administration, and set up an employment rulebook and payroll: plan for several weeks before the first payroll.
- Independent contractor. Lawful only for genuinely independent work. A registered entrepreneur who meets 5 of the 9 criteria in the independence test is treated as an employee for tax, with liability on the client.
When should I use an EOR instead of registering locally?
Use an EOR for your first engineers or business staff in Serbia, when you want to start in days and do not want to build CROSO registration, PPP-PD filing before every payment and a Serbian employment rulebook yourself. Your own entity earns its keep for a sustained team or a sales office signing Serbian contracts.
What does an employee actually cost beyond salary?
Statutory employer contributions are 15.15% of gross salary: 10% pension and disability and 5.15% health, up to a maximum base of RSD 732,820 a month. Private health insurance takes the all-in employer figure to about 16.5%. Meal and holiday allowances are mandatory under the Labour Law and taxed as salary, so build them into the gross offer.
How difficult is termination in Serbia?
Dismissal is allowed only on statutory grounds: performance or capability, breach of work duties, or redundancy. For conduct and performance cases the employer must first give a written warning with at least 8 days to respond. Redundancy severance is at least one third of monthly salary per year of service, and an unlawful dismissal can cost up to 18 salaries, so procedure matters. Mutual agreement is the common clean exit.
Can Dryft Global legally employ my team in Serbia?
Yes. Dryft Global employs your team in Serbia through a compliant local employer structured for the agency employment rules. We issue Labour Law contracts, register employees with CROSO before day one, file PPP-PD and pay tax and contributions with each salary, administer allowances and sick leave, and manage notice and dismissal.
Hiring routes compared
Speed, set-up burden and liability differ by route.
| Factor | Direct local entity | Dryft Global EOR | Independent contractor |
|---|---|---|---|
| Time to first payroll | Several weeks | Days to 2 weeks | Days |
| Local entity required | Yes, DOO or branch | No | No |
| CROSO and PPP-PD | Your registrations | Handled by Dryft Global | Contractor's own |
| Agency employment rules | Not applicable | Structured compliantly by Dryft | Not applicable |
| Statutory liability | Direct corporate exposure | Assumed by Dryft Global | High if 5 of 9 criteria are met |
| Best fit | Sustained team, local sales | First hires, engineering teams | Short independent projects |
What an employee costs in Serbia
Employer contributions in Serbia are moderate by European standards, and the employee bears a larger share through withholding. The model below is a Belgrade software engineer on RSD 300,000 gross a month in 2026, with the mandatory meal and holiday allowances included in gross salary.
| Component | Employer share | Notes |
|---|---|---|
| Pension and disability (PIO) | 10% | Employee pays a further 14% |
| Health | 5.15% | Employee pays a further 5.15% |
| Unemployment | None | Employee pays 0.75% |
| Statutory subtotal | 15.15% | On gross salary up to RSD 732,820 a month |
| Private health insurance | ~1.3% | Typical market budget |
| Total employer on-cost | ~16.5% | Above gross salary |
For an employee on RSD 300,000 a month, budget roughly RSD 4.19 million (about EUR 35,700) a year all-in before the EOR fee. The employee's own deductions are 19.9% contributions and 10% salary tax after the RSD 34,221 non-taxable amount, leaving net pay of about RSD 213,700 a month. Ask us for a cost model with current rates applied.
Payroll and tax
Salaries are paid at least monthly in dinars, with the previous month's salary paid by the end of the current month and a written payslip delivered with each payment. Before every salary payment the employer files the individual withholding return (PPP-PD) electronically, and tax and contributions are paid together with the salary. Where salary is paid in two parts, a return is filed for each part. Every employee must be registered with the Central Registry (CROSO) before work starts.
Income tax withholding
Salary tax is 10% of gross salary minus a non-taxable amount of RSD 34,221 a month in 2026. Employees whose annual income exceeds three times the average annual salary also pay annual income tax at 10% and then 15%, filed by 15 May. Qualified hires who were not resident in Serbia in the prior 24 months can qualify for a 70% reduction of the tax and contribution base for 5 years, subject to a minimum salary.
Minimum wage 2026
Serbia sets its minimum wage as a net amount per working hour: RSD 371 in 2026, about RSD 64,554 net a month on average. RSD 405 net per hour has been adopted for 2027. Overtime, night work and length-of-service premiums are paid on top.
Leave and mandatory benefits
- Annual leave. At least 20 working days a year, often more under employer rulebooks.
- Public holidays. New Year, Orthodox Christmas, Statehood Day, Orthodox Easter, Labour Day and Armistice Day, with religious holidays for other faiths.
- Sick pay. The employer pays the first 30 days at least 65% of average salary (100% for work injury), and the health insurance fund pays from day 31.
- Maternity and child care. Up to 365 days in total, paid by the state, not the employer.
- Childbirth leave for fathers. Paid leave of up to 5 working days, within the annual allowance for personal events.
- Meal and holiday allowances. Mandatory, with amounts set by the rulebook or contract.
- Length of service. At least 0.4% of base salary for each full year with the employer.
- Working time. 40 hours a week. Overtime is limited to 8 hours a week with a premium of at least 26%.
- Common extras. Private health insurance, extra leave days, flexible hours and remote work.
Termination and notice periods
Probation can last up to 6 months, with termination on at least 5 working days' notice and reasons given. After that, the rules are as follows.
| Item | Rule |
|---|---|
| Prior warning (conduct or performance) | Written, with at least 8 days to respond |
| Notice for performance dismissal | 8 to 30 days, by rulebook or contract |
| Employee resignation | At least 15 days, up to 30 by agreement |
| Redundancy severance | At least one third of monthly salary per year of service |
| Unlawful dismissal | Reinstatement, or up to 18 salaries |
- Statutory grounds only. There is no at-will dismissal in Serbia.
- Pay severance first. Redundancy severance must be paid before the termination date.
- Protected periods. No dismissal during pregnancy, maternity leave or child care leave.
- Collective redundancy. Thresholds start at 10 employees in 30 days, with a programme shared with the union and the National Employment Service.
- Court deadline. Employees have 60 days from delivery of the decision to sue.
Can I use independent contractors?
Only for genuinely independent work. Since March 2020 a registered entrepreneur is treated as an employee for tax if at least 5 of 9 criteria are met, including the client setting working hours, providing equipment, accounting for 70% or more of revenue, and engaging the person for 130 or more days in 12 months. Failing the test brings tax and contributions as other income, with liability on the client. Placing a worker under another company's direction is also regulated by the Law on Agency Employment, which requires a Ministry of Labour licence, equal treatment and limits on duration and headcount, so the employing structure matters. For anyone who works like an employee, an EOR set up through a compliant local employer is the safe route.
The legal framework in brief
Serbia is a civil law system where the Labour Law sets minimum terms and collective agreements, rulebooks and contracts can only improve on them. The instruments you will hear most:
- Labour Law. Contracts, probation, working time, premiums, leave, notice and dismissal.
- Personal Income Tax Law. The 10% salary tax, the non-taxable amount, annual income tax and the independence test.
- Law on Mandatory Social Insurance Contributions. Pension, health and unemployment rates and the contribution bases.
- Law on Agency Employment. Licensing, equal treatment and assignment limits since 2020.
- Data protection. The Law on Personal Data Protection (2018), closely aligned with the GDPR, overseen by the Commissioner.
- Immigration and right to work. A single residence and work permit filed through eUprava, with a 4-day labour market test and a 15-day decision.
- Corporate tax. 15%, with 68 tax treaties and no treaty with the United States.
- Authorities. The Ministry of Labour, the Tax Administration, CROSO, the PIO Fund, RFZO, the National Employment Service and the Commissioner.
Where the talent is
About 6.55 million people, with unemployment of 7.2% in the second quarter of 2026. Serbia's ICT services exports reached a record EUR 4.55 billion in 2025, and the country ranked 25th in the world for English proficiency in 2025. Time is UTC+1 (UTC+2 in summer). Serbia is an EU candidate country, not an EU member, and uses its own currency, the dinar.
| Region | Talent and industry concentration |
|---|---|
| Belgrade | Largest IT and business services cluster, headquarters |
| Novi Sad | Software development and IT services, university |
| Niš | IT, science and technology park, university |
| Kragujevac | Automotive, engineering and IT |
Serbia Implementation Kit
This page tells you the rules. The kit tells you what to do, in what order, and what goes wrong when you skip a step.
- Step-by-step checklist, from route selection to first payroll
- Contract, probation and CROSO registration before day one
- Gross to net and employer cost set-up under the 2026 rates
- PPP-PD filing before every payment and the monthly pay calendar
- Independence test and agency employment risk checklist
- Warning, notice, severance and mutual agreement pack
- Every official Serbian authority with direct links
This guide is general information, not legal, tax or immigration advice. Serbia changes the minimum wage, the non-taxable amount and the contribution bases each year, and the agency employment and permit rules are applied case by case. Confirm current figures and the employment structure with a qualified adviser or with Dryft. Last reviewed November 2026.
Ready to hire in Serbia?
Tell us who you want to hire and where they sit. You will get a cost model and a compliant route within a day, from a person who has done this before.