Rights and Obligations of Entrepreneurs Toward Employees

The entrepreneur as an employer

A paušalni preduzetnik (flat-rate entrepreneur) may hire employees. In that case, they take on all employer obligations under the Labor Act.

Employment contract

Every employee must have a written employment contract that includes:

• Job title and description of duties
• Place of work
• Type of contract (indefinite, fixed-term, part-time)
• Salary amount and method of calculation
• Working hours
• Annual leave

The contract is signed before the employee starts work.

Registering the employee

Deadline: before the first working day

Where: the Central Registry of Mandatory Social Insurance (CROSO) — electronically

Registration is done using the M-A form.

Obligations toward employees

Salary

• Minimum salary for 2026: ~75.000 RSD gross (check the current amount on the Tax Administration's website)
• Paid at least once a month, by the 15th of the following month
• Must be paid to the employee's bank account (not cash)

Taxes and contributions on salaries

Obligation	Rate	Borne by
Salary tax	10%	employee
PIO contribution	24%	14% employee + 10% employer
Health	10,3%	5,15% + 5,15%
Unemployment	0,75%	0,75% employee

Total burden: ~65% on the net salary

Annual leave

• Minimum 20 working days per year
• Cannot be replaced by monetary compensation (except upon termination of employment)

Employee protection

An entrepreneur cannot dismiss an employee without a justified reason and the prescribed procedure. The options are:

• Termination with a notice period (15–60 days)
• Mutual agreement
• Termination by operation of law (expiry of a fixed term)

Labor inspection

The labor inspection regularly checks:

• Whether workers are registered
• Whether the minimum salary is being paid
• Whether the prescribed records are kept

Fines for an unregistered worker: 800.000 to 2.000.000 RSD.