The average salary in Serbia is the average salary earned by every employee in Serbia. It is therefore the average salary, not the median, and it refers to the entire pool of salaries, i.e. to all activities. It is interesting that in Serbia, employees’ salary expectations are generally expressed net and on a monthly basis.
To avoid misunderstandings, it would be advisable to clearly discuss the net or gross salary amount with potential employees. In this text, a more detailed explanation of the salary calculation methodology is given. It also explains the relationship between the net salary, gross salary and total costs of the employee’s salary to the company – expressed as a percentage. Moreover, salary expectations in Serbia are traditionally expressed in Euros, but paid in Serbian Dinars, on the middle exchange rate of National bank of Serbia.
Salary in Serbia - calculation
When calculating salary in Serbia, it is important to define three basic variables that make up the total salary costs of an employee.
These include:
- Net salary (what is visible to employees after payment to bank account);
- Gross salary (increased by half of contributions, at the expense of the employee);
- Total cost (gross salary – increased Gross Salary by the second half of contributions, at the expense of the employer).
As it can be seen from the previous paragraph, there are two groups of income contributions. One group is paid by the employee, while the second group is paid by the employer. In the case of the gross salary of an employee, it is also very important to distinguish whether we are talking about the gross salary, which is increased by the first half of the income contributions, or whether we are talking about the gross salary, which includes the total contribution costs. These two quantities are often confused with each other, as well as called the same – the gross salary in Serbia.
The first half of the contribution – is 19,90%, while the second half of the contribution is slightly lower and is 15,15%. Contributions are calculated on the basis of gross income.
Salary calculation is available in a practical example via the calculator on our home page.
Income tax in Serbia
Income tax in Serbia is paid at a rate of 10%. It is paid on the amount of the gross salary reduced by the non-taxable part, which is about 220 euros. Please note that the basis is the gross salary, not the net payment of the salary in Serbia. You can find more information about gross salary calculation in the paragraph above, or on a specific example in the calculator available on the home page of this website.
Salary in Serbia – additional expenses
It is also important to include additional salary expenses that are not included in salary in Serbia and on which no salary tax is paid. These are the costs of employee transportation, meal expenses and paid employee vacation days. They do not cover the total cost of transportation, meals or annual leave of an employee.
These additional costs of the salary in Serbia represent a remnant from the era of socialism, that can still be found in the labor law.
Usually, these amounts are paid in addition to net earnings and separately from them, but in reality in the minimum amount required for the business operations. The amount of these additional costs is not prescribed by law, in other words, the employer has right to set these cost on his own. Taxes and contributions are paid on all these costs, except for the costs of transportation allowance for employees.
No taxes or contributions are paid on the amount up to about 40 euros, while only taxes (10%) are paid on the amount above the above.
In practice, the total amount of all of these benefits can range from 30 to 50 euros per month.