Employer of Record in Serbia

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Serbia if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Serbia below, to avoid any compliance issues.

Employment Contract Requirements

Serbia's employment legislation is designed to safeguard the rights of the workforce. As part of the hiring process, employers must provide employees with a written employment contract outlining wages, hours worked, guaranteed time off and other employment terms.

Onboarding Process

We can help you get a new employee started in Serbia quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Probation Period in Serbia

Probation periods in Serbia depend on the employment contract, but they cannot exceed six months. Within this period, either the employer or employee can terminate the contract with five days' notice.

Serbian labor law establishes a standard 40-hour workweek with strict regulations on overtime, which is limited to 8 hours weekly and must be compensated at a minimum of 126% of regular wages. Employers must ensure proper rest periods, including daily rest of 12 consecutive hours and weekly rest of at least 24 hours.

Night work (10 PM to 6 AM) requires additional compensation of at least 26% of the salary base, while weekend work does not automatically warrant additional pay. Special protections exist for young workers under 18. Compliance with these regulations is essential, as violations can result in significant financial penalties ranging from 600,000 to 2,000,000 RSD and potential employee claims.

Growing your team in Serbia is exciting, but it’s not without challenges. Local labor laws are often nuanced, and hiring without the right legal structure or processes can lead to misclassification, non-compliance penalties, or disputes. An Employer of Record removes that risk by acting as the legal employer on your behalf, taking full responsibility for compliance, contracts, payroll, and employee benefits.

This gives you the freedom to scale at your own pace, whether you're adding one employee or building out an entire function, without the burden of setting up and managing a local entity. You remain in control of day-to-day responsibilities and performance, while the EOR ensures every hire is legally protected and properly supported. It's a strategic way to expand globally without spreading your internal team too thin or exposing your business to legal liabilities in unfamiliar markets.

Managing payroll in Serbia requires careful attention to the country's specific tax regulations and contribution requirements. Employers must navigate a system where the combined employer and employee contribution rate reaches approximately 35.05% of gross salary, with employers responsible for withholding and submitting both their own contributions and those of their employees.

Key obligations include income tax at 10%, pension contributions split between employer and employee, and health insurance contributions. All submissions must adhere to strict monthly deadlines, typically by the 15th of the month following salary payment. Using payroll management software can help employers consolidate payroll data and stay compliant in Serbia by automating calculations, generating required reports, and ensuring timely submissions to Serbian authorities.

Employees expect to be paid accurately, on time, and in full compliance with local standards. When you're hiring in Serbia, providing a smooth payroll experience is critical to retention and trust. An Employer of Record ensures that employees receive what they’re owed, without errors, delays, or confusion about taxes or benefits.

Key Ways an EOR Supports Payroll in Serbia:

• Reliable Salary Payments: Ensures employees are paid promptly in local currency.
• Clear Payslips & Documentation: Provides employees with compliant, understandable records.
• Correct Benefits & Contributions: Delivers legally mandated contributions and any changes in compensation, like bonuses.
• Payroll Setup & Processing: Handles salary calculations, tax withholdings, and local reporting obligations.
• Boosts Employee Confidence: Builds trust with compliant, consistent payroll operations.

In Serbia, most foreign nationals who intend to work need both a temporary residence permit and a work permit, typically issued on the basis of employment with a Serbian company. The most common route is a temporary residence permit for employment combined with a work permit tied to a specific employer, role, and location, issued through the National Employment Service (NES) and the Ministry of Interior.

Short-term business visits may be possible on a C-type short-stay visa (where required) without a work permit, provided no productive work is performed. Longer-term assignments, intra-company transfers, and highly skilled roles are usually handled through a temporary residence permit for employment and a corresponding work permit, which can be renewed if the employment relationship continues and all legal conditions remain satisfied.

Mandatory Leave Entitlement in Serbia

The annual leave entitlement in Serbia is 20 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Serbia

Employees get paid for public holidays, and if a holiday falls on a weekend, it shifts to the next workday.

Paid Time Off in Serbia

Serbian employees have a minimum of 20 working days of annual leave, which can be extended based on factors like work contributions, conditions, experience, education, and contract or act criteria. Leave accrues as follows:

• In the first year, employees earn 1/12 of their annual leave for each month worked, applicable only in the initial year.
• After a full year of work, employees are entitled to at least 20 days of paid leave, usually granted at the beginning of the calendar year.

Maternity Leave In Serbia

Employees receive paid maternity leave starting 28 days before delivery, lasting a year with full wages for the first two pregnancies. For the third pregnancy onwards, the leave extends to two years, with full wages during the entire period.

Paternity Leave In Serbia

Employees receive paid paternity leave for five business days upon the birth of their child, with funding provided by the employer.

Sick Leave In Serbia

In Serbia, employees receive 30 days of paid sick leave from their employer. Beyond 30 days, the Health Insurance Fund provides sickness benefits, typically at 65% of the calculation base (based on average salary in the 12 months preceding), but at 100% for work-related injuries, occupational diseases, or organ donations.

Parental Leave In Serbia

In specific situations, the partner can assume Maternity Leave from the mother. Adoptive parents get eight months of paid leave when the adoptive child is placed until the child is five. For children under three months, leave extends until the child is 11 months.

Bereavement Leave

Employees get five days of paid leave for the death of a close family member.

Wedding Leave

Workers get 5 days of leave for their wedding

Employee benefits in Serbia combine strong legal protections with a growing market for flexible, performance-oriented perks. Your company will need to comply with robust mandatory benefits around social security, leave, and working time, and then layer in supplemental benefits that reflect your culture and budget.

To build a compelling offer, you should start by understanding statutory leave entitlements, social insurance contributions, and overtime rules, then decide which extras such as private health coverage, meal allowances, or flexible working options will help you stand out to Serbian talent.

• Top mandatory benefits include: enrollment in state social security (pension, health, and unemployment insurance), paid annual leave and public holidays, maternity and parental leave, and sick leave with wage compensation.
• Other key mandatory elements include: overtime premiums and night/Sunday/holiday work premiums, protection during pregnancy and childcare leave, and employer obligations for workplace health and safety.
• Top supplemental benefits include: private health insurance and medical check-ups, meal and commuting allowances, performance bonuses and 13th salary, and flexible working arrangements or additional paid leave.
• Key legal and tax considerations include: correct calculation and reporting of personal income tax and mandatory social security contributions, documentation to support any tax-exempt or partially exempt benefits, and adherence to the Serbian Labor Law and related social insurance regulations.

In Serbia, failing to provide the correct employee benefits can have serious consequences. Mistakes in benefits administration may result in fines and harm your reputation as an employer. An Employer of Record ensures statutory benefits and leave are handled correctly, every time, and provides comprehensive options for extra perks to reward your team.

Beyond just avoiding legal issues, a well-managed benefits program builds trust with your employees. An EOR ensures benefits are set up quickly during onboarding, updated when employee status changes, and fully compliant with national regulations. They also manage communication with employees, so there’s no confusion around what’s offered and how to access it. This combination of legal compliance and positive employee experience is hard to replicate without local infrastructure. With an EOR, you can offer peace of mind to your team (and to yourself) knowing that your benefits program in Serbia is running as it should.

Termination Process in Serbia

Termination processes in Serbia are determined by employment and collective agreements. Employers must provide a written explanation for dismissal at least eight days before taking action. Employees have the right to respond to the notice, and not granting this opportunity may result in the court invalidating the dismissal. Valid reasons for dismissal in Serbia include:

1. Fraud
2. Negligence
3. Dishonesty
4. Other work-related offenses

Notice Period in Serbia

In Serbia, when an employee resigns, the notice period ranges from 15 to 30 days, with a minimum of five days during the probation period. For employer-initiated unilateral termination due to incompetence—where the employee lacks the required knowledge or skills—the notice period must be specified by the employer’s internal work rules or the individual employment contract but cannot be shorter than eight days or longer than 30 days. This particular ground for termination is the only one mandating a notice period. For other legal grounds of termination, the employment relationship ends on the day the termination decision is properly delivered to the employee, and no mandatory notice period is required.

Severance in Serbia

Severance payments are mandatory only for employees laid off due to redundancy. The calculation involves multiplying one-third of the annual salary by the number of years worked with the employer.