Employer Tax Contributions

Tax Type	Rate	Base
Personal Income Tax	10%	Gross salary minus non-taxable amount (RSD 28,423 monthly)
Pension & Disability Insurance (Employer)	10%	Gross salary
Health Insurance (Employer)	5.15%	Gross salary
Unemployment Insurance (Employee)	0.75%	Gross salary

Filing & Compliance

• Monthly payroll taxes and social contributions due by the 15th of the following month.
• Annual Corporate Income Tax returns must be filed by June 30 of the following year.
• Social security contributions have minimum and maximum monthly bases (e.g., RSD 45,950 to RSD 656,425 monthly for social security contributions in the current year).

In Serbia, employee tax deductions encompass various areas, including income tax, social security contributions, and personal allowances.

Income Tax

• Salary Tax: A flat rate of 10% is applied to employment income after deducting the non-taxable monthly threshold. As of January 1, 2025, this threshold is RSD 28,423. The taxable base includes the gross salary and any fringe benefits.

Social Security Contributions

• Pension and Disability Insurance: Employees contribute 14% of their gross salary to this program.
• Health Insurance: This program provides healthcare coverage, and the contribution rate varies based on several factors not detailed in the provided sources.
• Unemployment Insurance: Employees contribute 0.75% of their gross salary to this fund.

Personal Deductions and Allowances

• Taxpayer Deduction: Individuals can deduct 40% of the average annual salary for the previous year as of January 1st, 2025.
• Dependent Deduction: An additional 15% of the average annual salary can be deducted for each dependent family member.
• Maximum Deduction Cap: The combined total of personal deductions cannot exceed 50% of the taxable income.
• Additional Deduction for Under 40s (for 2023 Tax Year): Individuals under 40 years old by December 31, 2023, were eligible for an additional deduction equal to the non-taxable income threshold (4,269,564 RSD in 2023) when filing their 2023 annual tax return.

Other Tax Credits and Incentives

• Newly Hired Employee Incentives (extended to December 31, 2025): Employers hiring new employees are eligible for partial refunds on paid salary tax and social security contributions. Details regarding specific refund amounts and eligibility requirements are not provided here.
• Newly Settled Experts: For newly hired experts with specific skills not available in the Serbian labor market, employers may be eligible for a 70% reduction in income tax and contribution base over five years, subject to specific conditions.
• Startup Founders: Founders of new innovative companies who are also employed by the company might qualify for income tax and social security contribution exemptions on their salaries up to certain limits for 36 months after the company's establishment.
• Tax Credits for Investments in Alternative Investment Funds: Tax credits can be applied for investments held for a minimum of three years. If divested before this period, the credit is revoked.

Annual Tax Return

The deadline for submitting the annual tax return and specific details on the process for 2025 have not been provided. Residents are taxed on worldwide income, while non-residents are taxed only on Serbian-sourced income.

Additional Notes

• Married couples are taxed separately.
• The non-taxable salary threshold is adjusted annually based on the consumer price index. The adjustment for 2025 is already in effect.

It is important to consult with a tax professional for personalized advice. Tax laws are complex and are subject to change.