Hire employees in Kosovo

Despite being only a partially recognized state – until today, only 97 member states of the United Nations have officially recognized the Republic of Kosovo – Kosovo does not lack attractive attributes that make it popular with international employers.

Income tax, employer social security charges and wages are among the lowest in Europe, and the tax system is fairly simple. The country’s young population provides a considerable talent pool, and its close proximity to the European Union makes it the perfect base for businesses looking to extend their activities into the EU.

Employment contracts have to be in writing, and both parties are required to sign the contract. Unless specified otherwise, the employment is considered to be concluded for an indefinite period of time. An employee’s fixed-term contract turns into an open-ended contract if it is continually renewed over a period of 10 years. Any employment agreement must include at least the following information:

• Identification of both parties

• Date of commencement (and employment duration for fixed-term contracts)

• Workplace

• Job description, duties and responsibilities

• Basic salary as well as other compensation or benefits

• Working hours

• Total number of holidays

The recommended contract language is Albanian or Serbian. Salaries and other financial compensation should be indicated in euros.

Probation Period

Probation periods should not be longer than 6 months.

Working Hours and Breaks

The standard work week in Kosovo comprises 40 hours and is usually split into 5 work days with 8 hours each. Employees must have a daily rest break of no less than 30 minutes.

The rest period between 2 consecutive work days must not be shorter than 12 hours. Each week, the employee must have an uninterrupted rest period of at least 24 hours.

Overtime

Overtime is only permitted under extraordinary circumstances (e.g. momentary increase of work volume) and must not exceed 8 hours within one week. Overtime pay is 130% of the employee’s normal hourly wages. Night work also requires a 30% wage supplement, and for work on public holidays and weekends, the wage rate goes up to 150%.

Salaries must be paid at least once per month. The payment must be made in euros.

Minimum Wage

National minimum wages in Kosovo are proposed by the country’s Socio-Economic Council and approved by the government. Following a legal initiative in April 2022, the statutory minimum wage now stands at EUR 264 per month. Before, minimum pay for workers under 35 was EUR 130 per month and EUR 170 per month for workers over 35.

Sick Pay

Employees who are unable to work because of illness can take fully paid sick leave. Paid sick leave is limited to 20 sick days per year, but unpaid sick leave can be requested for longer periods of sickness-related absence. For work-related injury or illness, sick leave is extended to up to 90 days and paid at rates of 70% of the employee’s normal wages – only after the first 10 days of leave are over.

It is the employee’s duty to inform the employer of their absence with the shortest possible delay. A medical certificate must be provided for any sickness-related absence of more than 3 days.

Bonuses

It is not required to provide a 13th month salary or any other form of annual bonus.

Employees and employers in Kosovo are subject to the following tax and social security contribution rates (last review February 2023):

Taxes

Employers

10%

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• 10% corporate tax rate

• 18% VAT (standard rate)

Employees

up to 10%

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• Up to EUR 960: 0%
  

• EUR 960 – EUR 3,000: 4%
  

• EUR 3,000 – EUR 5,400: 8%
  

• Over EUR 5,400: 10%

Social security

Employers

5% *

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5% of the employee’s salary must be paid as pension contribution (voluntary contribution of up to 15% possible)

Employees

5% *

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5% of the employee’s salary must be paid as pension contribution (voluntary contribution of up to 15% possible)

Please note that the social security contributions indicated above do not necessarily reflect the actual employment costs. These may differ depending on the employment contract and due to other factors (e.g. 13th and 14th salary, health insurance allowances, accrual for severance pay, etc.).

Annual Leave

The minimum annual leave requirement for employees in Kosovo is 4 weeks. The country further observes 11 public holidays on which employees are not required to work.

Maternity Leave and Paternity Leave

Female employees can take up to 12 months of maternity leave, of which 45 days can be taken before birth. The first 6 months of maternity leave are paid by the employer at a rate of 70% of her basic salary. The next 3 months are paid by the government at a rate of 50% of the national average salary.

After the first 9 months of maternity leave, the mother can take another 3 months of unpaid maternity leave. Upon her return to work, employees are further allowed to reduce their daily working time by 1 or 2 hours to breastfeed their child.

Fathers are allowed to take 3 days of paid leave at birth and 2 weeks of unpaid leave at any time between the birth and the child’s 3rd birthday. Furthermore, mothers can transfer unused maternity leave to the child’s father – except for the first 6 months of maternity leave which are not transferable.

Parental Leave

There are no legal provisions for further parental leave.

Additional Leave and Benefits

Additional leave must be granted under the following circumstances:

• Marriage: 5 days of leave

• Death of a family member: 5 days of leave

• Voluntary blood donation: 1 day of leave

Employees may be terminated due to one of the following reasons (non-exhaustive list):

• Gross misconduct

• Redundancy due to economic or organizational reasons

• Loss of ability to perform their job

• Lack of performance

• Repeated breach of employment obligations

The employment may also be terminated through mutual agreement or through the employee’s resignation. It is mandatory to provide the employee with a written letter of termination.

Employers wishing to dismiss an employee must respect a notice period. For fixed-term contracts, the statutory notice period is 30 days. For employees with an indefinite contract, the length of the notice period varies depending on their seniority:

• 6 months to 2 years of service: 30 days

• 2 to 10 years of service: 45 days

• More than 10 years of service: 60 days

Dismissed employees are entitled to any outstanding salary payments as well as monetary compensation for unused leave days. Severance pay is only required in case of collective dismissals, and only available to employees with an indefinite contract. The amount of severance pay varies in accordance with the employee’s years of service:

• 2 to 4 years of service: 1 month’s salary

• 5 to 9 years of service: 2 months’ salary

• 10 to 19 years of service: 3 months’ salary

• 20 to 29 years of service: 6 months’ salary

• More than 30 years of service: 7 months’ salary

Pregnant women, employees on maternity and special childcare are protected from dismissal by law – except for collective dismissals.