Several payroll changes will take place in Serbia starting from 1st January 2021.
- The tax rate and rates of social contributions rates remain unchanged. However, every year the adjustment is made for a non-taxable part of the earnings and maximum/minimum amount of earnings subject to the social security contributions.
- Non-taxable salary monthly amount is increased from 16,300 RSD to 18,300 RSD. This change will affect the earnings by increasing the net salary of employees by 200 RSD (1.7 EUR) net per month (as per Serbian Labour Law the salary in the employment agreement is indicated as the gross, not as net amount).
- The maximum amount of earnings subject to the social security contributions is increased from the current 368,590 RSD to 405,750 RSD.
- This increase will affect only net earnings higher than ca. 2,410.00 EUR by increasing the costs of social security contributions by 13.582 RSD monthly (or 116 EUR), as follows:
- net earnings will be decreased by 63 EUR net
- total costs for the employer will be increased by 53 EUR.
- If the tax and contributions are assessed and paid by the employee himself (e.g. an employer is a foreign company), this increase will affect the net salaries over 2,410 EUR by increasing the cost of social security contributions for 116 EUR monthly, and decreasing net earnings for the same amount.
- The minimal amount of earnings subject to the social security contributions is increased from the current 25,801 RSD to 28,402 RSD.
- Incentives for the qualified new employees are decreased in 2021, so that deduction of tax is 65% instead of 70%, while the deduction for pension contributions is decreased from 100% to 95%. For more details, please see this article.