Employer of Record (EOR) in Serbia: How to Hire, What It Costs, and How to Stay Compliant

An Employer of Record (EOR) in Serbia lets a foreign company hire Serbian employees legally without opening a local entity. The EOR becomes the legal employer — handling contracts, payroll, the 10% income tax, and social contributions — while you direct the day-to-day work. In Serbia the total employer cost is about 115% of gross salary, and hiring through an EOR can start within days rather than the months an entity setup takes.

Serbia offers a skilled workforce, competitive labour costs, and a strategic position in the Balkans, which makes it a practical base for teams serving Southeastern Europe. Partnering with an EOR gives you a fast, low-risk market entry: the EOR manages employment contracts, payroll, taxes, and Labour Law compliance, and you keep full control over targets and operations.

Key benefits of hiring in Serbia through an EOR

• Hire employees without forming a Serbian entity
• Full compliance with Serbia’s employment and tax legislation
• End-to-end payroll and HR administration
• Simplified hiring, onboarding, and contract management
• Quick market entry with easy-exit flexibility

Why choose an EOR in Serbia?

An Employer of Record acts as the legal employer for your local staff while you retain full control over their daily work. The EOR ensures compliance with all employment and tax laws and removes the need to register a subsidiary — so you can test the market or run a small team before deciding whether to incorporate.

How much does it cost to employ someone in Serbia in 2026?

Serbia is unusual in that salaries are anchored to a net figure, then grossed up. On top of the gross salary, the employer pays social contributions of 15.15% — so the total employer cost is about 115% of gross. The employee’s gross is reduced by their own 19.9% contributions and 10% income tax to reach net pay. The breakdown below uses a round RSD 100,000 gross example.

Serbia at a glance

Serbia’s business environment

Serbia combines steady economic growth with relatively low operating costs, which makes it attractive for companies seeking affordable but skilled labour. The country has a strong engineering and IT base, and global firms such as Microsoft, Siemens, and Fiat (now Stellantis) run local operations. A notable, often-overlooked advantage is market access: Serbia holds free-trade agreements with the EU, the Eurasian Economic Union, China, Türkiye, EFTA, the UK, and CEFTA members — giving manufacturers duty-free reach into an unusually broad set of markets. The Labour Law is comparatively flexible for employers, allowing fixed-term contracts, probation periods, and structured termination procedures.

EOR vs. opening a legal entity in Serbia

An EOR is ideal for testing the market or running small teams before forming your own legal entity.

Employment & payroll in Serbia

Employment contracts

All employment contracts must be written in Serbian and set out job title and description, start date and duration (fixed-term or indefinite), compensation and benefits, working hours, termination and notice terms, and confidentiality/IP clauses. A probation period of up to 6 months is allowed, during which either side may terminate with 5 days’ notice.

Working hours & overtime

• 40 hours per week (8 hours per day); a paid 30-minute break applies when the working day exceeds 6 hours.
• Overtime is capped at 8 hours per week and must be paid at a premium of at least +26%. Night work carries at least +26%, and work on public holidays at least +110%.

Payroll taxes (2026)

Employment income is taxed at a flat 10%, calculated on gross salary minus a non-taxable monthly amount of RSD 34,221. On contributions:

• Employee — 19.9% of gross: pension/disability (PIO) 14%, health 5.15%, unemployment 0.75%.
• Employer — 15.15% of gross: pension/disability (PIO) 10%, health 5.15%. There is no employer unemployment contribution.

The employer withholds the employee’s tax and contributions and remits everything to the Tax Administration by the 15th of the following month. With an EOR, all of this is handled for you, with a clear monthly cost breakdown.

Minimum wage (2026)

Serbia sets the minimum wage as a net hourly rate, so the monthly figure depends on the number of working hours in the month. From 1 January 2026 the rate is RSD 371 net per hour (a 10.09% increase):

Mandatory employee benefits & leave

• Annual leave: minimum 20 working days per year, accruing after one month of employment; unused leave can be carried into the next year until 30 June.
• Sick leave: the first 30 days are paid by the employer (65% for non-work illness, 100% for work-related); from day 31 the state health fund (RFZO) pays.
• Maternity leave: 365 days (one year) fully funded by the state for a first or second child, and two years for a third or subsequent child. It may start 45–28 days before the due date.
• Paternity leave: 5 working days on the birth of a child.
• Other statutory leave: bereavement 5 days, marriage 5 days, blood donation 2 days.
• Overtime, severance & allowances: paid per the Labour Law; transport and meal allowances are commonly provided.

Termination, notice & severance

Termination can be initiated by either party or occur on contract expiry, and the employer must give a written explanation of the grounds. An employee resigning gives at least 15 days’ written notice. Severance is mandatory in redundancy cases and must be at least one-third of the employee’s average monthly salary (last 3 months) for each full year of service — the statutory minimum severance is tax-free. Severance is not payable when the employee resigns.

Work permits in Serbia

Non-resident foreign employees generally need both a temporary residence permit and a work permit. Common categories include a temporary-stay visa with a sponsoring employer, a standard work permit based on a local contract, the EU Blue Card for highly qualified non-EU workers, an intra-company transfer permit, and a self-employment permit. Your EOR manages the documentation, sponsorship, and renewals for full immigration compliance.

NDA & IP protection

NDAs and IP clauses are enforceable in Serbia when they protect legitimate business interests (trade secrets, confidential data), are reasonable in scope and duration, include valid consideration, are clearly worded and signed by both parties, and are free of coercion. Non-competition clauses must stay limited in time (typically 6–12 months) and geographical scope to be valid.

What changed for 2026

• Mandatory e-Sick Leave (eBolovanje) from 1 January 2026: sick-leave reporting is now digital, ending the old paper-certificate process.
• Higher tax-free amount: the non-taxable monthly salary rose to RSD 34,221 (from RSD 28,423), increasing net pay without adding employer cost on already-gross-agreed salaries.
• Minimum wage: up 10.09% to RSD 371 net per hour, with the government targeting a monthly minimum of around €550 over time.

Frequently asked questions