Social contributions
December 9, 2022 - read
Article 1 of the Law of the Republic of Serbia regulates contributions for mandatory social insurance, as well as contributors, bases, rates, method of calculation and payment, as well as other matters of importance for determining and paying contributions.
Who pays social contributions?
Social contributions are calculated by the employer from the salary paid to an employee. These contributions are also payable by the employer on top of the employee’s gross salary. The amount borne by the employer is treated as an operating cost, while the portion payable by the employee is taken from the gross basic salary.
How much are the tax bases?
In Serbia, you will see in the Labor Agreements gross basis salary aka Gross 1, but the full expanse of the salary is total gross aka Gross 2.
For the employee (Gross 1):
- Pension and disability insurance: 14%.
- Health insurance: 5.15%.
- Unemployment insurance: 0.75%.
Plus for the employer (Gross 2):
- Pension and disability insurance: 11%. (From 2023 is downsized to 10%)
- Health insurance: 5.15%.
The minimum tax base for social security contributions defined by the Law on Mandatory Social Insurance Contributions is fixed at 35% of the average monthly salary published in Serbia, while the maximum tax base for social security contributions is capped at five times the average monthly salary published by official statistics in Serbia at the moment of salary payment.
Net salary + Tax obligation = Total Gross
When you ask an employee about their salary in Serbia, they always think of net salary, while in other countries a gross amount. That is because all social contributions and income tax (together tax obligation) are paid by the employer.