Serbia

Overview

Serbia, an emerging market economy, follows the free-market model with services sector contributing nearly 63% to the country’s GDP. The services sector is followed by the industrial sector which contributes around 23% and agricultural sector with 13% contribution to the GDP. Serbia’s primary exports include iron and steel, automobiles, rubber, wheat, clothes, non-ferrous metals, and electric appliances. The economic growth is driven by increased investment, facilitated by reforms aimed at improving the business climate.

Currency: Serbian Dinar

Principal Language: Serbian

Government: Republic, Parliamentary republic

Capital City: Belgrade

Major Cities: Belgrade, Nis, Novi Sad, Novi Pazar and Subotica

Employment Contracts

It is mandatory for employers and employees to enter into employment contracts that are drafted in the local language. A contract includes the details such as wages, benefits, notice period, and termination requirements. The amount of remuneration must be stated in dinar instead of foreign currency. Under the new labor laws, fixed-term contracts of up to 24-month duration are usually permitted. In specific circumstances, the duration of the contracts can be extended up to 36 months, the entire project duration, and the length of the remaining service for employees within 5 years of retirement.

Work/Time Regulations

The regular work schedule comprises 40 hours per day and 5 working days in a week. The work hours can be extended depending on the business needs.

Overtime
Work done beyond regular work hours is considered overtime which cannot exceed 8 hours in a week. Employers cannot ask employees to work for more than 12 hours in a day including overtime.

Leave

Holidays

The following national holidays are observed across Serbia:

  • New Year’s Day – January 1 and 2
  • Christmas Day – January 7
  • Sretenje – February 15 and 16 (Statehood Day of the Republic of Serbia)
  • Easter holidays – (Good Friday and Easter Monday)
  • Labor Day – May 1 and 2
  • Armistice Day – November 11

Annual Leave
Employees are entitled to 20 days’ annual leave out of which 2 weeks must be taken continuously.

Sick Leave
Employees who sustain a work-related injury are entitled to 100% pay for up to 30 days, and those who do not sustain an on-the-job injury are entitled to 65% pay.

Maternity Leave
Women employees are entitled to 365 days’ maternity leave for first 2 children and 2 years for 3rd and 4th children. In case of multiple births during 1st or 2nd pregnancy, employees are entitled to 2 years’ maternity leave. Employees are entitled to maternity pay equal to average wages earned during 12 months before the maternity leave began.

Fathers of newborn child/children are entitled to 7 days’ paternity leave.

Benefits

Pension and Social Security

Old-age Pension

The old-age pension is based on the ratio of the person’s wages to the average wages, the number of years of contributions, and the general point’s value (715.71 dinars).

Early Old-age Pension

The early old-age pension is decreased by 0.34% for every month (up to 20.4%) preceding the normal retirement age.

Schedule of Payments: The pension is paid twice each month to all pensioners except former self-employed individuals who receive the pension once a month.

Benefit Adjustment: The pension benefits are adjusted twice a year (April and October) based on the GDP growth rate and the fluctuations in the consumer price index.

Disability Pension 

The old-age pension is based on the ratio of the person’s wages to the average wages, the number of years of contributions, and the general point’s value (715.71 dinars).

Cash compensation for body impairment and Constant-attendance supplement: A monthly benefit is paid.

Schedule of Payments: The pension is paid twice each month to all pensioners except former self-employed individuals who receive the pension once a month.

Benefit Adjustment: The pension benefits are adjusted twice a year (April and October) based on the GDP growth rate and the fluctuations in the consumer price index.

Survivor Pension

The survivor pension (based on the old-age pension) is given to survivors at the following ratios:

  • 70% to 1 survivor, 140% to a full orphan
  • 80% to 2 survivors, 160% to full orphans
  • 90% to 3 survivors, 180% to full orphans
  • 100% to 4 or more survivors, 200% to full orphans

The minimum survivor pension (based on the old-age pension) is calculated using 20 years’ coverage.

Benefit Adjustment: The pension benefits are adjusted twice a year (April and October) based on the GDP growth rate and the fluctuations in the consumer price index.

Funeral Grant: The funeral expenses up to 150% of the average pension in the last quarter are paid.

How GPS can Help

With our Global PEO/Employer of Record services, companies can expand into Serbia and hire their employees without having to establish a branch office or subsidiary in Serbia.

  • Your candidate is hired via our Serbia PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
  • Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll - all in full compliance with Serbia laws.
  • Global PEO Services experts manage all day-to-day operational issues such as employee expenses, and severance/termination if required.
  • With no contractor risks, pass on the compliance burden to Global PEO Services.

Spin Off/M&A Support

  • Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.

24/7 Support in 100+ Countries

  • Empower your teams with 24/7 support and a single point-of-contact model in which experienced client services directors are in continuous communication with information and advice.
  • We are backed by a mix of 300+ multidisciplinary experts from HR, Payroll, Finance, Tax, and Legal domains who are ready to respond to the expected and unexpected needs of your business on the shortest notice.

Easy Visibility into Your Employee Time & Attendance and Benefits Data
With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management and benefits enrollment and management. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcount.

Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Learn more about our end-to-end international expansion services.

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