Employer of Record in North Macedonia

Hiring employees in North Macedonia involves navigating specific local labor laws, tax regulations, and administrative procedures. For international companies looking to expand their operations, understanding the available engagement models is crucial to ensure compliance and efficiency. Each approach offers distinct advantages and challenges, from establishing a full legal presence to leveraging third-party services.

When considering hiring talent in North Macedonia, companies typically have several options, each with varying levels of commitment and complexity. Your choice will depend on your long-term strategy, desired speed to market, and willingness to manage local administrative burdens.

You can consider the following avenues for engaging talent:

• Establishing a local legal entity: This involves setting up a subsidiary or branch office, a process that requires significant time, financial investment, and a deep understanding of North Macedonian corporate and employment law.
• Utilizing an Employer of Record (EOR): Partnering with an EOR, such as Rivermate, allows you to quickly and compliantly hire employees in North Macedonia without needing to establish your own local entity.
• Hiring them as an independent contractor: This offers flexibility but carries significant risks of misclassification if the working relationship resembles employment rather than a true contractor arrangement under North Macedonian law.

How an EOR Works in North Macedonia

An Employer of Record acts as the legal employer for your workforce in North Macedonia, handling all formal employment responsibilities while you retain full control over day-to-day management. Specifically, an EOR takes care of:

• Payroll processing and ensuring timely salary payments in compliance with local regulations.
• Tax withholding and remittances, including income tax, social security contributions, and other mandatory levies.
• Compliance with local labor laws, including employment contracts, working hours, leave entitlements, and termination procedures.
• Benefits administration, such as registering employees for health insurance, pension schemes, and other statutory benefits.
• HR support and guidance on local employment practices, helping to mitigate compliance risks.
• Onboarding and offboarding procedures in accordance with North Macedonian legal requirements.

Benefits for Companies Looking to Hire in North Macedonia Without Establishing a Local Entity

Opting for an EOR service offers substantial advantages for companies aiming to expand into North Macedonia without the complexities of setting up a local entity:

• Accelerated market entry: Hire employees in weeks rather than months, bypassing the lengthy process of entity registration.
• Reduced legal and compliance risks: The EOR assumes responsibility for adherence to North Macedonia's intricate labor laws, protecting your company from potential penalties.
• Access to local talent: Recruit and hire top professionals regardless of your physical presence in the country.
• Cost-effectiveness: Avoid the significant upfront and ongoing costs associated with establishing and maintaining a local subsidiary.
• Enhanced flexibility: Scale your team up or down efficiently, adapting to business needs without permanent commitments to local infrastructure.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in North Macedonia includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in North Macedonia.

In North Macedonia, employers are responsible for deducting and remitting social security contributions and personal income tax (PIT) from employee wages. The total employer social security contribution rate in 2025 is 21.3%, covering pension (13%), health (7.3%), unemployment (0.5%), and injury insurance (0.5%). Employers must withhold PIT based on a progressive system: 10% for income up to MKD 720,000 and 18% for income above that threshold. They are required to remit these amounts monthly by the 15th and submit an annual reconciliation by February 28th.

Employees benefit from deductions such as a personal allowance of MKD 96,000 and dependent allowances of MKD 36,000 per dependent, which reduce taxable income. Employers need to ensure proper documentation to apply these deductions. Foreign workers are taxed based on residency status, with residents taxed on worldwide income and non-residents only on North Macedonian-sourced income. The country has double taxation treaties and offers incentives for foreign investment, but compliance with reporting deadlines and understanding specific rules are essential to avoid penalties.

North Macedonia's salary landscape varies across industries, roles, and experience levels, with key sectors including IT, manufacturing, finance, and sales. For 2025, typical annual salaries range from €12,000 to €35,000, with IT roles like Software Engineers earning €18,000–€30,000 and Project Managers €22,000–€35,000. Salaries are generally higher in Skopje and depend on company size and qualifications.

The legal minimum wage is set at a gross monthly MKD 33,352 (€542) and net MKD 24,400 (€396), with strict compliance required. Employers often supplement base pay with bonuses such as holiday, 13th month, performance, meal, and transportation allowances, alongside mandated overtime pay at 1.35–1.5 times regular rates.

Payroll is predominantly monthly via bank transfers, with deductions including 18.8% pension, 7.5% health, 1.2% unemployment contributions, and a flat 10% income tax. In January 2025, the average net wage was MKD 43,050, projected to rise to MKD 65,797 by quarter-end, driven by inflation, skill shortages, and economic growth.

Employees in North Macedonia are entitled to a minimum of 20 paid annual vacation days, which must be used within the calendar year unless otherwise agreed. Unused leave may be carried over under specific conditions. Public holidays are observed throughout the year, with employees generally receiving paid time off; key holidays include New Year's Day, Labour Day, Independence Day, and religious holidays, some of which vary annually.

Sick leave is available when employees are unable to work due to illness, with pay typically calculated as a percentage of their salary, contingent on medical certification. Parental leave includes maternity (around 9 months starting 45 days before delivery), paternity, and adoption leave, all providing paid time off with eligibility from employment start. Additional leave types include bereavement, study, and optional sabbatical leave, depending on agreements.

Employers in North Macedonia are legally required to provide several mandatory benefits, including paid annual leave (minimum 20 days), public holiday entitlements, paid sick leave, maternity and parental leave, and adherence to the statutory minimum wage. They must also contribute to social security funds covering pensions, healthcare, and unemployment. These mandatory benefits typically account for 15-30% of an employee's salary, depending on the benefit package's scope.

Beyond legal requirements, many companies offer optional benefits such as private health insurance, life and accident insurance, supplementary pension plans, flexible working arrangements, and employee development programs to attract and retain talent. Larger firms and specific sectors like IT and manufacturing tend to provide more comprehensive packages, tailored to industry needs. Employee expectations are shifting towards benefits that enhance health, financial security, and work-life balance, making competitive benefits packages crucial for talent retention.

Employment agreements in North Macedonia are essential for defining the rights and obligations of employers and employees, ensuring compliance with local labor laws. Valid agreements must meet legal requirements regarding contract type, clauses, probation periods, and termination conditions, protecting both parties and promoting workplace stability.

The law recognizes two main contract types:

Employers should carefully draft agreements to include essential clauses, specify probation periods, and outline termination procedures to ensure enforceability and legal compliance.

North Macedonia is progressively adopting remote work, influenced by technological progress and a desire for better work-life balance. While specific legislation on remote work is still developing, existing laws such as the Labor Law, OSH Law, and Data Protection Law provide a regulatory foundation. Employers must ensure compliance with these laws, including clear agreements on working hours, safety, and data handling.

Flexible work arrangements are increasingly common, including full-time remote work, part-time remote work, and hybrid models. Key considerations for employers include adherence to labor rights, safety protocols, and data security. The following table summarizes typical flexible arrangements:

Employers should develop clear remote work policies aligned with existing laws to ensure productivity and legal compliance.

Employers in North Macedonia must follow specific legal procedures for employee termination, including adhering to notice periods, providing written notices, and maintaining documentation to ensure lawful dismissals. Notice periods vary based on tenure: 15 days for up to 1 year, 30 days for 1-5 years, 45 days for 5-10 years, and 60 days for over 10 years of service. Severance pay is generally required when terminating for reasons unrelated to employee misconduct, calculated based on the employee's average salary and length of service, often as a multiple of the salary per year of service.

Terminations can be with or without cause. Valid grounds for with-cause dismissals include misconduct or performance issues, while without-cause reasons include redundancy or restructuring. Employers must document the grounds and follow procedural steps, including providing written notices and offering employees a chance to respond. Employees are protected against wrongful dismissal, with legal recourse potentially leading to reinstatement or compensation if the termination is deemed unlawful.

North Macedonia is experiencing a rise in freelancing and independent contracting, driven by global remote work trends and a demand for specialized skills. This shift offers businesses flexibility and access to a diverse talent pool without the long-term commitments of traditional employment. However, companies must correctly classify workers to avoid legal and financial penalties. Key factors for classification include control over work, integration into business operations, financial dependence, relationship duration, provision of tools, and exclusivity.

Independent contractor agreements in North Macedonia should clearly define the scope of work, payment terms, contract duration, intellectual property rights, confidentiality, and liability. Contractors are responsible for their own taxes and social contributions, including income tax, social contributions, and VAT if applicable. Misclassification can lead to back payments and fines. Intellectual property created by contractors typically belongs to the creator unless the contract specifies otherwise, emphasizing the need for clear IP clauses.

Independent contractors are prevalent in sectors like IT, creative services, consulting, education, and professional services. The table below outlines key tax obligations:

Professional liability insurance is recommended for contractors, especially in consulting and IT, to mitigate risks. The growing prevalence of remote work has expanded opportunities for North Macedonian contractors to engage with international clients, particularly in IT and creative sectors.

North Macedonia provides various visa and work permit options for foreign workers, with key types including Visa C (short-term, up to 90 days) and Visa D (long-term, over 90 days, serving as a basis for residence permits). To work legally, foreign nationals must secure a work permit, which requires a job offer, labor market test, and submission of documents such as employment contract, educational qualifications, health insurance proof, and a criminal record. The processing time ranges from 30 to 60 days, with fees varying by permit type.

Employers must ensure their foreign employees hold valid permits, comply with labor laws, and report employment changes. Employees are obligated to adhere to permit conditions, maintain health coverage, and update authorities on personal changes. Foreign nationals residing and working continuously for five years may qualify for permanent residency, requiring proof of residence, financial stability, language proficiency, and a clean record. Dependents of work permit holders can apply for visas to reside with the primary permit holder, provided they meet relationship and financial support criteria.