HR & Payroll in Montenegro | Montenegro Employment Law

Local Information

Local Time (LIVE):	4:23 AM
Local Currency:	$1 = ‎€0.82
Business Language(s):	Montenegrin and English
Tax Year Dates:	1st January – 31st December

Montenegro is a Balkan country set in the midst of rugged mountains, bordering Croatia, Bosnia, Serbia, Kosovo and Albania. It’s well-known for its medieval villages and wide stretch of beaches. It has a population of 633,000 and the two major languages are Serbian and Montenegrin.

Montenegro’s main exports are non-ferrous metals, electricity, beverages, and petroleum products. The country’s main export partners are Serbia, Hungary, Croatia, Greece, Germany, Italy, Bosnia and Herzegovina, Albania and Turkey.

Being a coastal country, getting around by boat and ferry is an ideal mode of transport in Montenegro. Boats and ferries travel along Montenegro’s coast, but can also be used to travel past its border. There are four main railway stations in Podgorica, the capital, these are Niksic, Tuzi, Bijelo Polje and Bar. Most train routes in Montenegro lead to these. Another alternative mode of travel in Montenegro would be renting a car. With a large choice of providers it can be easy to find a competitive rate.

International payroll and HR can present a number of difficulties for those not versed in the country’s employment legislation and regulations. Fortunately, IRIS FMP are here to help guide you and take care of compliance whilst you get on with the important day to day.

Details correct at time of publication. You should not rely on these details without first seeking professional international advice.

Employer Must-Dos

January 31st of the current year is the final deadline for submitting the Report on Paid Gross Salaries, Taxes and Contributions for Employer.
Reports must be submitted for the employer and include information on the total amount paid for gross salaries, mandatory pension, and health insurance during the previous year for all employees.

Payroll in Montenegro

What tax considerations are there?

Personal Income Tax

Personal income tax rates in Montenegro are at 9%. This is imposed on salaries, property-related income, and investment income (interest income earned by non-residents is subject to a 5% PIT). Residents are taxed on their worldwide income, whereas non-residents are taxed on that derived from within Montenegro only.

Corporate Income Tax (CIT)

Companies in Montenegro are subject to 9% corporate profit tax (CPT). Non-resident taxpayers will be taxed on their Montenegrin-sourced income attributed to their Montenegrin permanent establishment (PE).

HR in Montenegro

What are the regular working hours in Montenegro?

The standard working week in Montenegro is 40 hours. Employees are allowed to negotiate with their employers their weekly working hours, as long as the 40 hours is filled. Following the employers’ collective agreement (2014) employees may be expected to work overtime in some cases. Employers are required to notify the Labour Inspector in these cases, with working overtime expected to correspond with an increase of wages.

Vacation, Maternity, and Sickness

Employees are entitled to 21 days of paid annual leave. Additionally, employees are eligible for up to seven days of paid leave for matrimony, birth, professional examinations, and compassionate leave.

In Montenegro, five paid sick days are allocated throughout the year, once you go over this amount of days, you will be entitled to statutory sick pay.

Female employees in Montenegro are entitled to 1 year of maternity leave, which is allowed to start 45 days before the birth and no later than 28 days post-birth. After this period of time, either parent can work part time until the child turns 3 years old. This period would be considered unpaid leave and they would receive job protection.

Termination

The Montenegro Labour Act outlines the specific cases where the employer can terminate the employee without the need to conduct the disciplinary procedure:

Termination of employment by mutual agreement

In case of termination of employment by mutual agreement, the exact date of termination must be determined in the agreement. The mutual agreement is legally effective only after it has been certified by a notary, court or municipal authorities.

Collective layoff

The collective layoff procedure is applied when the planned layoff of at least 20 employees within 90 days. The Labour Act allows the duty to initiate consultations with the labour union or the employees and to notify the Employment Bureau about the consultations. In addition to this, the employer cannot employ another person in the position deemed redundant for a period of six months.

Looking for more information?

To get to grips with international payroll and the key considerations that come along with it, download our free guide to international payroll.

Download Our Guide

IRIS FMP’s Montenegro’s Payroll and HR Solutions

Business-owners seeking to expand into Podgorica, Kotor, Budva, or another of Montenegro’s main cities must know how to achieve full compliance with local employment law. Getting to grips with this legislation can be a complex undertaking, which might cause additional stress at a pivotal time for your company. To avoid problems, speak to the experts at IRIS FMP, who have ample experience in international HR and payroll law. Our services include, but are not limited to.

Emailed payslips
Payroll audits
Pension and social security contributions
Holiday, maternity, and sick leave
Payroll processing
Multi-currency payroll
Multi-language payroll

Overseas money transfers
Employment contracts
HR consultancy
Translation services
Local law consultation
End-of-tear tax administration

Stay Compliant - Payroll and HR Services in Montenegro

Avoid unnecessary stress during your business expansion into Montenegro, by letting the experts at IRIS FMP help you navigate all the local HR and payroll law. Contact us today for further information.

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Payroll and HR in Montenegro