Government incentives for employment in Serbia

On 16^th June 2022, the Government of the Republic of Serbia adopted the Decree on Criteria for Awarding Incentives to Employers Employing Newly Registered Residents in the Republic of Serbia, which is an important measure for adapting employers to new business conditions.

The incentive will cover 70% of the calculated and paid payroll tax for one or more employees and 100% of the calculated and paid contributions for mandatory pension and disability insurance for next 5 years.

The conditions for applying for the incentive are:

• the employment of those foreigners whose profession/job profile lacks in the domestic labor market,
• foreigners with which the employer concluded an employment contract for an indefinite period of time with full-time employment with basic monthly salary higher than 300,000 dinars (approx. 1800 EUR net).
• foreigners have not spent more than 180 days in Serbia in the last two years from the date which precedes the day of concluding the employment contract with the employer
• foreigner has to be employed by 31st December 2023, the latest

Additional conditions for receiving incentive:

• Foreigner has to be continuously employed by the employer in the period between the day of application and December 31 of the year in which the application was submitted
• Employer has to hire a certified auditor to check salary calculation once per year and prepare a Report
• Employer in the period from the submission of the first application and ending with the end of the calendar year in which he receives the last payment of incentives, cannot pays dividends, except dividend or profit paid from the part of profit higher than the amount received on behalf of incentives;
• The right to receive incentives is exercised by an employer whose number of full-time employees on the day of submission of the application for incentives (hereinafter: application) is the same or greater than the number of full-time employees on the day of entry into force of this Decree increased by the number of foreigners for which he applies. This means that Employer cannot decrease number of full-time employees on the day of application (e.g. Sep 15th earliest) each year comparing to number of full-time employees on the day of entry into force of this Decree.
• Employers who already receive state aid unless the right to the state aid expires by July 1 this year will not be entitled to this incentive. Furthermore, those employers who already have the right to reduce the salary tax base in accordance with the Law on Income Tax will not be able to count on this incentive.
• Application has to be submitted between September 15 and September 30 each year for the payment of incentives for previous 12 months
• Deadline for adopting the application by the institution in charge is 120 days from the 30th September each year.
• Payment of incentives can be expected in additional 45 days from the above deadline for adopting the application.

Approximately, on net salary of 1800 EUR, you will be able to get back cca 800 EUR of paid tax and contributions for one employee, so the salary expenses will decrease to the level of cca 20%.

We can organize/perform all the required procedures for applying for incentives each year.

Just send your question and we will get back with the proper information in short time!