Social and pension insurance

Working in Europe | Taxation/salaries | Serbia

 

All employees earn the right to social security and pension payments through mandatory social and pension insurance paid by an organization or employer where he or she is employed.

From the social and pension insurance which has to be paid in a form of a fee, the fund for mandatory social insurance is formed, which includes:

  • Pension and disability insurance,
  • Health insurance,
  • Unemployment insurance.

The basis for the fee calculation is the average wage paid in the RS in the fourth quarter of the previous year.

The right to mandatory basic insurance is granted to all the employees as well as foreign citizens employed by a foreign legal entity or an individual in the RS, if it has not been regulated otherwise by an international treaty.

A person becomes entitled to the insurance on the day of the start and terminates on the day of termination of employment. Every insured person must be at least 15 years old.

More information on Social Security can be found on the website of the Republic Fund for Pension and Disability Insurance.

 

Social security contributions are mandatory

Social security rates

In Serbia, the Social Security Rate is a tax related with labor income charged to both companies and employees. Revenues from the Social Security Rate are an important source of income for the government of Serbia because they help to pay for many social programs including welfare, health care and many other benefits.

Social security contributions are calculated and withheld by the employer from the salary paid to an employee, up to a specified cap. These contributions are also payable by the employer on top of the employee’s gross salary. The amount borne by the employer is treated as an operating cost, while the portion payable by the employee is taken from gross salary. The rates are as follows.

For the employee:

  • Pension and disability insurance: 14%.
  • Health insurance: 5.15%.
  • Unemployment insurance: 0.75%.

For the employer:

  • Pension and disability insurance: 12%.
  • Health insurance: 5.15%.
  • Unemployment insurance: 0.75%.

Serbian law on mandatory social security insurance contributions can be downloaded here (in English).