Payroll and Benefits Guide Montenegro
Last updated: Jan 01, 2025
Contribution
| Employer Payroll Contributions | |
|
5.50%
|
Pension and Disability insurance, capped at 53,371 annually.
|
|
2.30%
|
Health Insurance
|
|
0.50%
|
Unemployment Insurance
|
| 8.30% |
Total Employment Cost |
| Employee Payroll Contributions | |
|
15.00%
|
Pension and Disability Insurance, capped at 53,371 annually
|
|
8.50%
|
Health Insurance
|
|
0.50%
|
Unemployment Insurance
|
| 24.00% |
Total Employee Cost |
| Employee Income Tax | |
| 0% | Up to 700 EUR Monthly |
|
9.00%
|
701 EUR to 1,000 EUR Monthly |
| 15.00% | Over 1,0001 EUR Monthly |
Employer taxes
Employee taxes
Minimum Wage
General
The monthly gross minimum wage is 450 EUR.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
In Montenegro, the payroll frequency is monthly and payment is generally made by the last working day of the month.
13th Salary
There are no provisions in the law.
Salary Increase
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%
Working Hours
General
A standard full-time workweek in Montenegro consists of 40 hours per week or 8 hours per day.
Overtime
| Aspect | Regulation Details |
| Maximum Ordinary Hours | 40 hours per week (8 hours per day). Overtime is any work performed beyond these hours. |
| Daily/Weekly Maximum (Average) | Total working time, including overtime, must not exceed 48 hours per week on average over a four-month period. |
| Weekly Overtime Limit | Overtime work is generally limited to a maximum of 10 hours per week. |
| Annual Overtime Cap | Overtime is limited to a maximum of 250 hours per year, as set by the Labour Law and Collective Agreement. |
| Authorization | The employer must issue a written decision for overtime work prior to its beginning (or retrospectively within three days). Overtime is only permitted in cases of sudden increase in workload or force majeure. |
| Prohibitions | Overtime work is prohibited for employees under 18, pregnant women, and employees with children under the age of three. |
| Sunday Work | Sunday is legally designated as a weekly rest day and non-working day for most employees (with specific, regulated exceptions). |
Mandatory Overtime Pay Rates
Overtime is compensated with a supplement paid in addition to the employee’s regular wage. While individual collective agreements may stipulate higher rates, the legal minimums are:
| Day/Condition | Statutory Minimum Rate (Supplement) | Total Pay Rate | Notes |
| Standard Overtime (Working Days) | +40% of the regular hourly wage. | 140% | This is the minimum rate stipulated by the General Collective Agreement and referenced as the legal threshold in the Labour Law. |
| Weekend Work (Saturday) | +40% of the regular hourly wage. | 140% | Compensation for work on a Saturday or other scheduled rest day. |
| Sunday Work (If authorized) | +80% of the regular hourly wage. | 180% | This higher premium is mandated for work performed on a Sunday (for the limited sectors where it is permitted). |
| Public Holiday Work | +80% of the regular hourly wage. | 180% | This minimum premium applies to work on official public holidays. |
| Night Work (10:00 PM – 6:00 AM) | +40% of the regular hourly wage. | 140% | This premium is mandated for night work and may be cumulative with overtime/weekend premiums. |
Compensation Method
-
Overtime must be compensated monetarily. There is no provision to substitute monetary overtime pay with compensatory time off in lieu (TOIL) for general overtime, although rest periods are still mandatory.
-
Time on Stand-by (On-Call Duty): Time spent on standby must be paid at a minimum of 10% of the base hourly wage.
Leave
Annual Leave (vacation)
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.
PTO Carryover
In Montenegro, unused statutory annual leave can be carried over and must generally be used by 30 June of the following year.
Note:
- For Eurofast, any unused leave as of 31st Dec can be carried forward to next year and will expire as of 30th Jun
Public Holidays
Each of the holidays in Montenegro is two days long. When the first day of a public holiday falls on a Sunday, the following two days are non-working days.
If the second day of holiday is a Sunday, the first following working day is given to the worker in lieu.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 2 January 2026 | Friday | New Year Holiday | Standard holiday |
| 7 January 2026 | Wednesday | Orthodox Christmas Day | Standard holiday |
| 8 January 2026 | Thursday | Orthodox Christmas Holiday | Standard holiday |
| 10 April 2026 | Friday | Orthodox Good Friday | |
| 13 April 2026 | Monday | Orthodox Easter Monday | Standard holiday |
| 1 May 2026 | Friday | Labour Day | Standard holiday |
| 2 May 2026 | Saturday | Labour Day Holiday | Standard holiday |
| 21 May 2026 | Thursday | Independence Day | Standard holiday |
| 22 May 2026 | Friday | Independence Day Holiday | Standard holiday |
| 13 July 2026 | Monday | Statehood Day | Standard holiday |
| 14 July 2026 | Tuesday | Statehood Day Holiday | Standard holiday |
| 13 November 2026 | Friday | Njegoš Day | Standard holiday |
| 25 December 2026 | Friday | Catholic Christmas Day |
Sick Days
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.
Maternity 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.
Paternity Leave
The paternity leave entitlement is included in parental leave.
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.
Other 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:
- Matrimony
- Birth
- 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.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
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 fixed-term contract is easy to terminate. It is important that the employer notify the employee that his contract will not be renewed at least 30 days before the expiration of the contract. However, to terminate a fixed-term contract before expiration or a non-fixed-term contract, it takes full legal action to cover that, which is according to the labor law, and includes all the necessary actions, and also the reason for termination determines the procedure of termination.
| Salary payment interval / date | Final payment on termination | Bank account payment requirement |
|---|---|---|
| Wages must be paid at least once a month, and typically by the 15th day of the following month for the previous month’s work. | Upon termination, the employer must pay all earned wages, accrued leave and any statutory severance. While exact “within X days” deadlines are not clearly universal in sources, settlement generally occurs with final salary or very shortly thereafter. | Payment must be made in money and the law states wages “in the manner determined by contract or collective agreement”; one source notes that under the new law wages “will be possible to be made exclusively through a bank account.” |
Notice Period
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
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.
Severance payment is s calculated in this manner, minimum severance payment is severance pay in the amount of at least 1/3 of his monthly average salary without taxes and contributions in the previous half-year for each year of work with that employer, i.e. 1/3 of the monthly average salary without taxes and contributions in Montenegro, if that is more favorable for the employee . Severance payment calculated in both cases, can not be less than three average monthly wages without taxes and contributions with the employer in the previous half-year, that is, average monthly wages without taxes and contributions in Montenegro in the previous half-year, if that is more favorable for the employee.
Probation Period
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.
Immigration
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
General
VAT is 21% standard rate.
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Payroll and Benefits Guide
in Montenegro
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 2 January 2026 | Friday | New Year Holiday | Standard holiday |
| 7 January 2026 | Wednesday | Orthodox Christmas Day | Standard holiday |
| 8 January 2026 | Thursday | Orthodox Christmas Holiday | Standard holiday |
| 10 April 2026 | Friday | Orthodox Good Friday | |
| 13 April 2026 | Monday | Orthodox Easter Monday | Standard holiday |
| 1 May 2026 | Friday | Labour Day | Standard holiday |
| 2 May 2026 | Saturday | Labour Day Holiday | Standard holiday |
| 21 May 2026 | Thursday | Independence Day | Standard holiday |
| 22 May 2026 | Friday | Independence Day Holiday | Standard holiday |
| 13 July 2026 | Monday | Statehood Day | Standard holiday |
| 14 July 2026 | Tuesday | Statehood Day Holiday | Standard holiday |
| 13 November 2026 | Friday | Njegoš Day | Standard holiday |
| 25 December 2026 | Friday | Catholic Christmas Day |
I need to know the method of calculating social insurance for employees. If the employee receives a basic salary of 400, how much will the total salary. I need to know the social insurance calculation. Can you send the method of calculation
Hi Murad, I’ve attached a link to our global employment cost calculator. https://www.papayaglobal.com/cost-calculator/
Here you can plug in the country of employment, monthly/annual salary, and the currency, and it will do the calculation for you. You can also find the employer/employee taxes in Montenegro on our CountryPedia.