G-P’s Employer of Record (EOR) model allows your company to start hiring talent in minutes via our global entity infrastructure. Unlike a Professional Employer Organization (PEO), G-P allows your company to expand your global footprint without the hassle of entity setup and management.
Our global employment products, including G-P Meridian Prime™ and G-P Meridian Core™, are backed by the largest team of HR and legal experts in the industry. We handle the growing complexities of compliant global expansion — so you can focus on opportunities ahead.
As a global EOR expert, we manage payroll, employment contract best practices, statutory and market norm benefits, employee expenses, as well as severance and termination. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P allows you to harness the talent of the brightest people in 180+ countries around the world, quickly and easily.
Hiring in Serbia
Serbia’s complicated regulatory environment can make opening a business tricky. However, in 2014, Serbia passed legislation to open up the economy and make it easier to do business.
When negotiating terms of an employment contract with an employee in Serbia, it may be useful to keep the following in mind.
Employment contracts in Serbia
New labor laws allow fixed-term contracts for up to 24 months. In some cases, these can be extended to 36 months, the entire length of a project, or, for people within 5 years of retirement, the entire length of their remaining service.
It is legally required to put a strong employment contract in place in Serbia, in the local language, which spells out the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in Serbia should always state the salary and any compensation amounts in Serbian dinar (RSD).
Working hours in Serbia
The standard workweek in Serbia is 40 hours. Overtime is permitted but should not exceed 4 hours per day or 8 hours per week. Workers are entitled to a 12-hour break between workdays and at least one 24-hour break per week.
Holidays in Serbia
Serbia celebrates 7 national holidays:
- New Year’s Day
- Orthodox Christmas Day
- Sretenje (National Day)
- Labor Day
- Orthodox Good Friday
- Orthodox Easter Monday
- Armistice Day
Vacation days in Serbia
Employees are entitled to a minimum of 20 days of vacation annually, and at least 2 weeks of it must be taken together. Vacation days from the previous year can be carried over to the next year but must be used until June 30.
The employee is entitled to paid leave, for a total duration of up to 5 working days during 1 calendar year in case of marriage, childbirth, serious illness, or in case of death of a family member. Employers can determine more cases in the general act. Employees also often have a day off for their patron day (slava in Serbian) if they celebrate it.
Serbia sick leave
Employees are entitled to paid sick leave. They’re required to provide the employer with a medical certificate with the reasons for the leave and the estimated time of absence. The notice must be provided 3 days after the beginning of the sick leave.
If the employee misses work due to an on-the-job injury, they are entitled to 100% of pay for up to 30 days. If the injury was not sustained on the job, the employee is entitled to 65% of the salary.
Maternity/paternity leave in Serbia
Pregnant employees are entitled to receive maternity leave of up to 365 days for their first 2 children and 2 years for their third and fourth children. If the employee’s first or second pregnancy results in multiple births, they are entitled to 2 years of maternity leave.
Employees on maternity leave are entitled to pay equal to the average salary they received during the 12 months leading up to when they started their leave, up to a maximum of 5 times the average local salary. Employees can’t be terminated during leave.
If the pregnant employee has a fixed-term employment contract, that term is automatically extended to the end of the leave.
The father can join the maternity leave in the event of the mother’s passing or when it is required due to exceptional reasons, such as in case of severe illness of the mother, if the child is abandoned by the mother, etc.
Fathers are entitled to 7 days of paternity leave.
Serbia supplementary benefits
When calculating salary in Serbia, it’s important to include:
- Basic salary.
- Performance-based salary.
- Salary increment.
- Meal allowance.
- Cost of public transportation to and from work.
- Holiday allowance.
These last 3 mandatory payments must be accounted for separately from other salary components. In terms of fringe benefits, employees highly value private healthcare supplements.
Bonuses
A performance-based incentive is part of the usual salary calculation in Serbia.
Termination/severance in Serbia
Fixed-term employment agreements end automatically at the end of the term.
Permanent contracts of employment can be terminated on grounds of poor performance and notice of at least 8 days must be given. Notice of more than 30 days may be required, depending on the employee’s length of service. The exact duration of notice should be included in the employee’s contract.
Prior to termination for a violation of work duty or discipline, the employer must give the employee a warning. The employee can respond to this warning and submit it to the opinion of the trade union. The employer is only required to take the trade union opinion into consideration.
The employee can appeal the termination if this is allowed in the employment contract. Such an appeal must be initiated within 3 days of the notice of termination. An arbitrator will render a decision within 10 days. During the proceedings, the employee is suspended from work.
Employees can also file a court proceeding to nullify the termination. Within 15 days of the filing, the employee can request from the Labor Inspectorate authorization to return to work until the case is decided.
When dismissing an employee for a violation of work duty or discipline, the employer must pay severance to the employee.
If the employer terminates an employee due to redundancy, the employer must pay a minimum severance based on the employee’s salary.
Paying taxes in Serbia
Serbia’s social security program includes pension and disability, health insurance, and unemployment insurance. Employees and employers contribute to all 3 areas at varying rates:
- Pension and disability: Employees contribute 14%, and employers contribute 10%.
- Health insurance: Employers and employees contribute 5.15%.
- Unemployment insurance: Employees contribute 0.75%.
Employers have to withhold all employees’ income tax as part of their Serbia payroll. All employees get taxed 10% (income tax) whether they are nationals from other countries or locals. Income tax is calculated as per the formula: (Gross salary – RSD 21,712)*10%. In regards to social and health contributions for employees and employers, there is a threshold for individuals making up to RSD 500,360.
Why G-P?
At G-P, we help companies unlock the power of the everywhere workforce through our industry-leading global employment platform. Let us handle the complex and costly tasks involved in finding, hiring, onboarding, and paying your team members, anywhere in the world, with the speed and guaranteed global compliance your business needs.
Contact us today to learn more.
