Hiring in Serbia

The contract sets out role, salary (paid in RSD), working time, leave, notice and any non-compete clause. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Contracts are drafted in Serbian, and bilingual Serbian and English versions are standard for international employers.

Fixed-term contracts are capped at 24 months, with limited exceptions, and most EORs default to indefinite terms.

Set probation from day one. It cannot be extended beyond the 6-month statutory cap, and a decision that the employee has not passed needs written reasons.

Some EORs shorten probation as policy because they, not you, carry the dismissal risk. Ask before you agree a start date.

Overtime is paid at a premium of at least 26% of the base rate, and work on a public holiday at a minimum of 110%. A working day cannot exceed 12 hours including overtime.

There is no earnings threshold, so senior hires are covered too. Agree in writing how overtime is approved and recorded.

Professional roles typically get 20 to 25 days, because the statutory minimum rises with experience and other criteria set in the employer's rules. Quote the market figure when you budget.

The first 30 days of sick leave are paid by the employer at no less than 65% of average salary, rising to 100% for a workplace injury, after which the health insurance fund takes over. Maternity and childcare leave run to 365 days for a first or second child and are state funded but paid through payroll, so confirm whether the EOR bills you for any of it.

There is no termination on notice alone. Redundancy severance is at least one third of monthly salary per year of service, paid before the exit date, and performance cases need written instructions and time to improve first.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay within 30 days, unused leave and any severance. Unfair dismissal protection applies from day one and courts can order reinstatement, so keep a documented reason.

Commuting costs must be reimbursed, and seniority pay of at least 0.4% of base salary per year of service is mandatory. The Labour Law also provides for meal and holiday allowances, which many employers build into base salary.

Private health insurance is common for professional roles but not mandatory. EORs often bundle it through a group scheme, so ask what is included in the fee and what is billed on top.

Employer contributions add 15.15% on top of gross salary, up to a cap of five times the average monthly salary. That is before the EOR fee.

Annual income tax is the trap. Employees whose yearly net income exceeds three times the average annual salary must file their own return by 15 May and pay a further 10% to 15% on the excess, so raise it with senior hires before they compare offers.

Ask whether the EOR sponsors directly or refers to a partner. A partner-model EOR often cannot sponsor at all, and the labour market test runs against the sponsor, not you.

The law lets an applicant start work once the application is filed, but confirm with the EOR before you agree a start date.

Get the data processing terms in the service agreement, not just the privacy notice. Transfers out of Serbia need a lawful basis, though EU and EEA countries are treated as adequate.

Ask where payroll data is hosted and who in the partner chain can see it.

Incorporating a limited liability company (d.o.o.) is quick and the minimum capital is nominal, but the running cost is the point: a registered address, a director, licensed bookkeeping, annual financial statements, audit thresholds and payroll software set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.