Hiring at a Glance

Serbia is an emerging Southeast European market with a skilled, educated workforce and competitive labor costs. Companies like Microsoft and Schneider Electric have invested here, drawn by Serbia’s growing tech sector and improving business climate. Serbia’s minimum wage (~RSD 96, 614 net as of 2024) and cost of living are relatively low. Its strategic location (central Europe, access to EU markets) and English-proficient talent make it attractive for outsourcing and R&D.

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Key Characteristics of the Talent Market

The Serbian workforce is highly educated and technically skilled, with strong engineering and IT talent. Over 50% of adults have higher education. Major universities supply graduates in software, electronics, and industrial engineering. Labor laws are set at the national level, and collective bargaining applies to many sectors. Wages in Serbia remain cost-effective compared to Western Europe, making it a “value-for-money” location for hiring specialized skills. (For example, as of 2024 the monthly minimum wage is about RSD 140,000 gross.)

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Most In-Demand Skills in 2026

Companies hiring in Serbia are especially seeking software developers, data analysts, network engineers, and fintech professionals. The booming IT sector also creates demand for cybersecurity specialists and cloud engineers. Finance, administration, and manufacturing roles (e.g. industrial automation) are also common hiring needs. Serbian talent is noted for strong programming, systems integration, and engineering capabilities.

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Top Universities Supplying Talent

Leading institutions for talent include the University of Belgrade, University of Novi Sad, and University of Niš. These universities and their engineering faculties graduate many software engineers, data scientists, and other specialists each year. (For example, the University of Belgrade is Serbia’s largest and oldest university, with extensive STEM programs.)

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Salary Benchmarks for Roles

• Software Engineer: EUR 30,000–55,000 per year (gross)
  
• Data Analyst: EUR 28,000–45,000 per year
  
• Product Manager: EUR 40,000–65,000 per year
  
• Manufacturing Engineer: (typically at the lower end of engineering scale)
  

These ranges are approximate annual gross salaries; local taxes and contributions apply. Actual pay varies by experience, location (e.g. Belgrade vs. other cities), and company.

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Employer of Record vs Legal Entity Setup in Serbia

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To Legally Hire Employees, a Company Must

• Register a legal entity. Foreign firms typically incorporate a Serbian company (e.g. LLC) or use an EOR to handle employment. Entity registration with the Serbian Business Registers Agency usually takes ~2–4 weeks.
  
• Register with tax and insurance authorities. The employer must register for corporate tax and VAT with the Tax Administration, and open accounts with the Pension and Disability Insurance Fund, Health Insurance Fund, and National Employment Service. Each new employee must be enrolled in Serbia’s mandatory social insurance programs.
  
• Issue compliant employment contracts. Contracts must be in Serbian, include required details (salary, hours, benefits, etc.), and be signed by both parties. Before work begins, the employer must submit the contract to the national “Revisal” employment register.
  
• Withhold and pay payroll taxes. The employer is responsible for deducting 10% personal income tax from wages and remitting it, along with all social contributions.
  
  

Cost of Entity Setup

In Serbia, setting up a company involves modest state fees and notary costs. The official incorporation fee is low (around EUR 50–100 equivalent) plus a small notary/legal fee. In practice, local firms charge a few hundred euros total to handle the paperwork. The process (including tax registration and opening a bank account) typically takes a few weeks. Ongoing entity maintenance (annual filings, accounting) and monthly payroll compliance entail additional recurring costs.

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What Hiring Through an EOR Means in Serbia

An Employer of Record (EOR) in Serbia becomes the legal employer registered with Serbian tax and labour authorities, while the employee works exclusively for your company. You retain operational control over work and performance, while the EOR assumes responsibility for all employer obligations under Serbian labour and tax law.

Serbia is a regulated but employer-workable labour market, governed by:

• Labour Law of Serbia
  
• Mandatory social insurance systems
  
• Income tax and contribution laws
  
• Labour inspection enforcement
  

Foreign companies cannot legally employ staff in Serbia without:

• A Serbian employing entity
  
• Tax and social security registration
  
• Compliance with Serbian labour contracts and termination law
  

An EOR provides this employer infrastructure without requiring you to establish a Serbian company.

An EOR in Serbia handles:

• Serbia-compliant employment contracts
  
• Fixed-term vs permanent structuring
  
• Payroll processing in RSD
  
• Personal income tax withholding
  
• Pension, health, and unemployment insurance
  
• Statutory leave and public holidays
  
• Termination and severance handling
  
• Work permits and visas for foreigners
  

This model works best for companies that want to hire in Serbia without managing payroll, contributions, and termination compliance directly.

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Risk Involved in Both Models

Serbia’s labour system is codified, inspection-driven, and moderately employee-protective.

Key characteristics:

• Written contracts required
  
• Fixed-term contracts limited in duration
  
• Mandatory social contributions
  
• Severance required in some terminations
  
• Labour inspections are active
  

Compliance failures can result in:

• Fines from labour inspectorate
  
• Back payment of wages or benefits
  
• Invalid termination orders
  

In Serbia, payroll and termination procedure errors are the main employer risks.

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EOR Vs. Entity: When to use What?

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Why is an EOR the Most Efficient Way to Hire in Serbia?

Serbia offers strong talent in engineering, IT, support, and operations but employment is governed by mandatory contributions and termination law.

An EOR is not just payroll. It is the legal employer recognised by Serbian authorities, responsible for:

• Labour law compliance
  
• Payroll and tax
  
• Social insurance
  
• Termination execution
  

This allows foreign companies to hire in Serbia without inheriting payroll and labour inspection risk.

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#1. EOR Manages Fixed-Term vs Permanent Contract Risk

Serbia limits fixed-term contracts:

• Maximum duration and renewals
  
• Must convert to permanent after limits

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#2. EOR Controls Social Contributions & Payroll Errors

Employment cost is driven by:

• Pension
  
• Health insurance
  
• Unemployment insurance
• Income tax

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#3. EOR Controls Termination & Severance Risk

Some terminations require:

• Notice
  
• Severance based on service length
  
• Justified reason

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#4. EOR Avoids Entity & Admin Overhead

Entity setup requires:

• Company registration
  
• Tax registration
• Accounting and payroll

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EOR vs. PEO in Serbia: How to Decide the Right Hiring Model?

A PEO in Serbia cannot legally employ workers or sponsor visas. A Serbian employing entity is required.

• PEO: HR/payroll support only
  
• EOR: Legal employer

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Key question:

Do you want to manage payroll and labour inspections yourself?

If not, EOR is the better option.

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Payroll, Taxes, and Monthly Compliance

Serbia has a simple flat income tax and mandatory social security system. Employers must withhold a flat 10% income tax from gross pay. In addition, both employers and employees pay social contributions: employees pay 14% for pension, 5.15% for health, and 0.75% for unemployment (total ~20% of gross), while employers pay 10% for pension and 5.15% for health (total ~15%). In practice, the employer computes “gross-to-net” payroll by deducting employee contributions and tax, then adds the employer’s share on top of the gross salary. Monthly, the employer remits all withheld taxes and contributions to the Tax Admin and insurance funds before paying net salaries. Payroll reports are submitted electronically via Serbia’s tax portal.

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Salary Structure: Where Most Compliance Issues Begin

Serbian payroll compliance often hinges on correctly classifying salary components. Mistakes can arise if employers misapply tax allowances or miscalculate contribution bases. For example, Serbia allows a fixed non-taxable threshold per employee, and employers must ensure taxable income is calculated as gross minus this allowance. Common errors include omitting mandatory allowances (e.g. for dependents) or using the wrong base for social contributions. Strict Serbian laws also require that benefits (e.g. meal allowances, transport) be handled according to rules; misclassifying these can trigger fines. In short, careful “gross-to-net” calculation and adherence to prescribed formulas is essential to avoid compliance issues.

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What Monthly Payroll Operations Actually Involve

Each month, employers in Serbia must: compute gross salary, subtract 10% PIT and employee contributions (pension, health, unemployment), add employer contributions, and issue payslips to workers. Payslips must show gross vs. net pay and all deduction details. The employer then electronically files all payroll taxes and contributions and remits payment to the government before salaries go out. Practically, this means maintaining accurate timesheets/records, running a payroll calculation for each employee (often via specialized software), preparing and delivering pay statements (in Serbian), and performing online filings to the tax and social security agencies. Errors in calculation or late filings can result in penalties, so many companies either use payroll software or partner with local accountants/EORs to manage these operations compliantly.

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Step-by-Step Onboarding Process With an EOR in Serbia

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1. Confirm Tax-Registered Employer

Ensure the Employer of Record (EOR) is properly registered with the Serbian Tax Administration and relevant labour authorities. This includes compliance with payroll tax, mandatory social security contributions, and employee registration requirements. Proper registration safeguards your business from penalties, back payments, and regulatory risks.

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2. Validate Role & Contract Type

Determine whether the role should be structured as a fixed-term or permanent employment contract under Serbian Labour Law. Review role duration, probation terms, and statutory protections before finalizing the agreement. Correct classification ensures legal compliance and prevents disputes related to termination or employee rights.

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3. Request Full Cost-to-Company

Includes:

• Salary
  
• Contributions
  
• Tax
  
• EOR fee
  
  

4. Initiate Visa Process (If Foreign)

EOR manages:

• Work permit
  
• Residence permit
  
  

5. Generate Serbia-Compliant Contract

Contract reflects:

• Labour Law
  
• Termination rules
  
• Notice and severance
  
  

6. Register Employee

EOR registers with:

• Tax authority
  
• Social insurance
  
  

7. Run Payroll & Maintain Compliance

EOR manages:

• Payroll
  
• Contributions
  
• Leave
  
• Termination
  
  

Build Your Serbia Team with Bolto EOR

Expanding into Serbia is fundamentally a payroll and labour-inspection exercise, not just hiring.

Bolto’s Employer of Record model absorbs that complexity so you can hire in Serbia without becoming the legal employer or inspection target.

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Local Compliance, Fully Managed

Bolto handles:

• Contracts
  
• Payroll and tax
  
• Contributions
  
• Immigration
  
• Authority interactions
  
  

Hire Without Entity Setup

Expand into Serbia without the time, cost, and complexity of incorporating a local entity. Hire in weeks, not months, while staying fully compliant with Serbian Labour Law and tax regulations. Bolto acts as the legal employer on your behalf, enabling fast market entry without administrative burden.

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Transparent Costs

Receive a clear breakdown of all employment expenses, including salary, mandatory social security contributions, and employer taxes. No unexpected contribution adjustments or severance payment surprises at the end of employment. With full cost transparency upfront, you can confidently plan budgets and scale your Serbian workforce.

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Full Lifecycle Support

From drafting compliant employment contracts and registering employees with authorities to payroll processing and lawful termination procedures, Bolto manages the entire employee lifecycle. We ensure adherence to local labour protections, notice periods, and statutory requirements. Your team remains compliant while you stay focused on growing your business.

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Built for Risk-Controlled Expansion in Serbia

Serbia penalizes payroll and termination errors. Bolto enables growth without inheriting that risk.