Payroll and Benefits Guide Montenegro
Last updated: May 10, 2023
Employer Payroll Contributions
|8.30%||Total Employment Cost|
|5.50%||Pension and Disability insurance|
Employee Payroll Contributions
|24.00%||Total Employee Cost|
|15.00%||Pension and Disability Insurance|
Employee Income Tax
|0.00%||Up to 700 EUR|
|9.00%||701 EUR to 1,000 EUR|
|15.00%||Over 1,0001 EUR|
The monthly gross minimum wage is 532.54 EUR and 6,390 EUR per year (based on twelve monthly payments).
MINIMUM WAGE (PER MONTH)
In Montenegro, the payroll frequency is monthly and payment is generally made by the last working day of the month.
There are no provisions in the law.
Each year in Montenegro worker’s salaries are increased based on completing a year of service as follows:
- Up to 10 years – 0.5%
- From 10 to 20 years – 0.75%
- Over 20 years – 1%
A standard full-time workweek in Montenegro consists of 40 hours per week or 8 hours per day.
Overtime cannot exceed more than 10 hours per week for a total of 50 hours worked and no employee can work more than 48 hours per week—including overtime—on average within the period of four months. In general, overtime must be agreed upon in writing except for emergencies. Overtime pay is generally outlined in collective bargaining agreements, but the minimum legal threshold is 140% of the regular pay.
The new general collective agreement on extra pay for work on Sundays and for non-consecutive work hours are as follows:
- work on Sundays is paid 80% on top of the base hourly wage, with the following exceptions:
- the rule does not apply to jobs the nature of which requires continuous work, such as jobs relating to aircraft crew or workers in hospitality and public transport sectors)
- with respect to jobs in the media industry, the rule will apply only from 1 July 2023
- work with non-consecutive hours (i.e. from 9 a.m. to 1 p.m. and from 3 p.m. to 7 p.m.) is paid 10% more than the same work with consecutive hours of work (with some exceptions) and time spent on stand-by is paid at 10% of the base hourly wage.
On call duty
An employee cannot be held on standby (on-call duty) for more than ten days per month unless a branch collective agreement, governmental decision, or individual bargaining agreement provides otherwise.
Paid Time Off
For each calendar year, an employee shall have the right to 20 working days of annual leave. For employees with a six-day workweek, the entitlement is increased to 24 working days. At least 10 continuous working days must be used during the allotted calendar year and the remaining unused days can carry over until 30th June of the following year.
There are 9 public holidays.
Employees receive 70% compensation from their employer for the first 60 days of sick leave and then after from social security.
Employees are obligated to provide their employers with a medical certificate within three days of starting their sick leave.
Pregnant employees are entitled to receive 98 days of paid maternity leave at the employee’s regular pay rate.
Maternity leave should start 28 days before the due date and the remaining 70 days are taken after childbirth.
PAID MATERNITY LEAVE (DAYS)
The paternity leave entitlement is included in parental leave.
Employees can use parental leave after the completion of maternity leave for a duration of 365 days. Each parent is entitled to an even share of the leave. Parental leave can be transferred from one parent to the other upon expiry of 30 days from when the parental leave was started. If this is done, the parent who transferred the right to the other parent shall not be entitled to the continuation of the use of parental leave.
Depending on the collective agreement or employment contract terms, an employee may be allowed additional leave types approved between the employer and employee. Employees are entitled to up to 7 days of paid leave for:
- Professional examinations
- Death of an immediate family member
- The new general collective agreement entitles employees to additional days of paid leave compared to what they are entitled to under the labor act.
- Employees are entitled to two consecutive workdays of paid leave within a year when taking a professional exam unrelated to their job.
- In the case of childbirth, the employee is entitled to three workdays of paid leave even if the total number of annual paid leave workdays in the given year (30 days) has been taken.
- A union representative is entitled to a paid absence from work while present at union-related events within the country or abroad, subject to a written notice of absence to be submitted at least three days before the absence and proof of the invitation for the event.
Employers can terminate a fixed-term contract for business, personal, or worker misconduct. It requires notice and a written explanation for the termination. If the reason is misconduct, a warning needs to be given and the employee gets a chance to explain their actions.
A written notice must be given at least 30 days before the date of termination of employment unless the contract or collective agreement states otherwise.
Severance pay should be outlined in the employment contract or collective agreement and should not be less than three times the average monthly salary, free of taxes and contributions across the previous four months.
The probationary period is defined in the collective agreement or employment contract and must not exceed six months. It is common to practice in Montenegro for probation periods to be three months.
Business visitors may enter under a short-stay C visa, which allows entry and stay for up to 90 days in a 180-day period. Allowable activities are not regulated by law. As the labor inspectorate has wide discretion in assessing compliance, activities conducted on business visits should be limited.
The main work authorization category is the Temporary Residence and Work Permit, which can be used for both intracompany transferees and locally hired employees. The permit may be granted for one year initially and is renewable.
VAT is 21% standard rate.
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Payroll contributions and personal income tax rates have been updated.
Questions & Answers
Payroll and Benefits Guide
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
Public Holidays Calendar
|Sunday||Jan-1||New Year's Day|
|Monday||Jan-2||Second Day of the New Year|
|Tuesday||Jan-3||New Year's Day||In lieu|
|Tuesday||May-2||Day after Labor Day|
|Sunday||May-21||Independence Day||In lieu|
|Monday||May-22||Day after Independence Day|
|Friday||Jul-14||Day after Statehood Day|