Payroll and Benefits Guide Albania

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee Income Tax

General

The national minimum wage in Albania is 34,000 ALL.

Payroll Cycle

The payroll cycle in Albania is generally a monthly cycle, with wages paid by the last working day of each month. However, hourly, weekly, and daily paid employees are paid every two weeks.

13th Salary

There is no 13th salary in Albania.

General

Standard working hours within Albanian law are 40 hours a week, 8 hours a day for adults (except when an employee is under 18, which will reduce the maximum daily hours worked to 6 hours a day).

Overtime

All work above the standard 40 hours a week is to be paid at a minimum rate of 25% more than the standard pay rate. If the work is done during a weekend or public holiday, the minimum rate is 50% more than the standard pay rate. Overtime can be compensated for time off from work rather than payments on the same basis.

Collective agreements and contracts regulate overtime; however, the Labour Code states that no employee can work more than 200 hours overtime in any one year. As per the Albanian Labor Code, the employer cannot request an employee to work overtime if they have already worked 48 hours in any one week, unless in exceptional circumstances. The restrictions state that these special circumstances cannot be longer than four months, and the employee’s average working time cannot exceed 48 hours.

There are further restrictions for overtime, e.g. night workers, the associated type of work to be performed, and who is going to undertake the overtime, e.g. pregnant employees and those under 18 years of age.

Working Week

Monday–Friday

Paid Time Off

The regulations regarding paid leave in Albania are set in the Albanian labour code, which states that an employee who has worked a full year is entitled to 4 weeks of paid leave which the employee must take during the working year or within the first three months of the following year. Any employee with less than one years’ service will receive pro-rata leave days.

All leave requests must be provided to the employee at least 30 days before the leave start date.

Public Holidays

There are 23 public holidays.

Sick Days

An employee can claim sick leave for the entire time of their illness until their doctor confirms that the employee is able to return.  For the first 14 days of sick leave, the employer is obligated to pay 80% of the employee’s salary.  From the 15th day onward, social insurance compensates the employee for 70% of their average salary of the past 6 months.

Maternity Leave

Expectant mothers (who have worked for 12 consecutive months) are entitled to up to a year of paid maternity leave, with a minimum of 35 days paid before birth and 63 days after delivery. After 63 days, the employee can remain on leave or return to work. Women who are expecting more than one child are entitled to 390 days of maternity leave.

The first six months of maternity pay is calculated at 80% of the employee’s average monthly salary from the previous year. The following six months’ maternity pay is reduced to 50%, as detailed in article 104 of the Labour Code.

Paternity Leave

There is currently no statutory paternity leave in Albania. However, in October 2020, a proposed amendment was made to the Albanian Labour Code and Social Security Law (96.3) for fathers to be entitled to three days of paid leave.

Parental Leave

Parental leave in Albania is 12 days of paid leave to tend for a child.  Employees with children under three years old are entitled to an additional three days and can request additional unpaid leave for up to thirty days per year should it be required to care for the child.

Other Leave

Bereavement leave

In the event of the death of an immediate family member, an employee is entitled to two days’ leave.

Marriage leave

In the event of an employee’s marriage, the employee can take five days’ leave. For the union of a child, it is two days’ leave.

Termination Process

If an employer wishes to dismiss an employee, the employer is obligated to deliver prior notice to the employee. The employer must then request a meeting within 72 hours of this notice to discuss the reason for their termination. The employer must allow the employee to present their counterarguments. Should the employer fail to arrange the meeting within 72 hours of notice, the employee may be compensated.

Should an employer wish to terminate a contract with an employee, the employer must provide prior notice to the employee and arrange a meeting with the employee to discuss the rationale for terminating the contract within 72 hours. Should this timescale not be met, the employee may be in a position for compensation. The employee must be allowed to present any counterarguments before the final termination.

Should an employee wish to terminate their contract, they must provide a reason and complete the contracted notice period before the termination date.

During the probation period, the employment can be terminated by either the employer or employee with five days of notice.

Notice Period

Notice periods within Albania are as follows

• 2 weeks’ notice is required for employees leaving within the first six months of employment 
•  1 months’ notice is required for employees leaving between six months and two years of employment
• 2 months’ notice is required for employees leaving within the second and fifth years of employment
• 3 months’ notice is required for employees leaving after the first five years of employment

Severance Pay

Fifteen days of severance pay is due to employees who have worked for a company in Albania for more than three years.

Probation Period

Probation periods in Albania are generally three months.

During the probation period, the employment can be terminated by either the employer or employee with five days of notice.

VISA

All foreign visitors need a visa to enter Albania and a residence permit to live there.

Foreigners wishing to work in Albania, depending on their citizenship and the nature of work intended, may require a different type of employment permit, a) work registration certificate (for listed activities lasting no more than 60 or 90 days); b) employment declarations; c) work permit (planning to work and stay in Albania for more than 90 days in 180 days.)

The work permit is submitted to the Directory of Migration of the National Employment Service and is generally issued within ten days of the submission by the applicant.   There are four main Albanian work permit categories:  Type A: Permits for economic activities for both employers and employees, Type B: Independent economic activity permits, Type C: Permits for special occasions, and Type D: Permanent work permits for eligible foreigners.

Extended periods of Stay and Permanent Stay may be granted but only through the provision of a residence permit. The residence permit is issued by the Regional Directorate of Borders and Migration and enables the holder to enter, stay and exit the Republic of Albania.

General

The standard rate of VAT in Albania is 20.00%