Amendments to the Law on Personal Income Tax and Amendments to the Law on Contributions for Mandatory Social Security
At its session held on August 31, 2026, the National Assembly of the Republic of Serbia adopted the Law on Amendments to the Law on Personal Income Tax and the Law on Amendments to the Law on Contributions for Mandatory Social Security, which were published in the Official Gazette of the RS, No. 80/26 dated August 31, 2026.
Both laws enter into force on the eighth day following their publication in the Official Gazette of the RS, i.e., on September 8, 2026, while their application is deferred and implemented in stages starting from January 1, 2027, and January 1, 2028.
Amendments Effective January 1, 2027
Starting from 2027, the non-taxable portion of earnings is increased from 34.221 RSD to 37.369 RSD per month, thereby reducing the tax base for salary taxes.
Existing employment incentives for newly hired individuals, which allow for the refund of a portion of paid taxes and contributions ranging from 65% to 75%, are extended until December 31, 2028. Throughout 2027, these incentives will continue to be utilized under the existing rules.
Regarding employment incentives for persons with disabilities, a limitation is introduced in accordance with state aid control regulations.
Additionally, lump-sum entrepreneurs who lose their right to lump-sum taxation and switch to bookkeeping are granted the option to opt for the payment of personal salary subject to the obligation to submit a notification within 15 days from the loss of the right to lump-sum taxation.
Significant Changes Effective January 1, 2028
Starting from 2028, the conditions for utilizing existing employment incentives for newly hired individuals will change. The most important changes include:
- New method for determining the increase in the number of employees – previous fixed reference dates will no longer be used. Employers will be required to achieve an increase in the net number of employees compared to the average number of employees in the preceding 12 months. This means eligibility for incentives will be evaluated based on actual employment growth at the specific employer.
- Limitation of the incentive utilization period – for an individual newly employed person, the incentive can be utilized for a maximum of 12 months from the employment date, instead of the previous practice of continuous utilization as long as prescribed conditions are met.
- Changed conditions for interns – the special requirement of prior registration of interns with the National Employment Service for a duration of three months is abolished, meaning the general period of at least six months will apply to interns as well.
- “Youth Guarantee” program – the age limit for persons covered by these rules is lowered from 30 to 24 years.
- Introduction of a maximum incentive amount – the total incentive cannot exceed 50% of the salary costs of newly employed persons, nor can it exceed EUR 5.5 million per employer annually.
- Certain employers who, under state aid control regulations, are considered companies in difficulty, as well as employers ordered to repay state or de minimis aid, will not be eligible for incentives.
In practice, throughout 2027, employers will continue to utilize the respective incentives under the existing regime, while as of January 1, 2028, it will be necessary to verify compliance with the new, more restrictive conditions for their utilization.
Accordingly, the net minimum wage for payments during 2027, as well as the monthly minimum gross salary in 2027, will be as follows:
| Month | Number of possible working days in month | Number of possible working hours in month | Minimum net hourly labor rate | Minimum monthly net salary | Minimum monthly gross salary |
|---|---|---|---|---|---|
| January 2027 | 21 | 168 | 405 | 68.040,00 | 91,730.53 |
| February 2027 | 20 | 160 | 405 | 64.800,00 | 87,108.56 |
| March 2027 | 23 | 184 | 405 | 74.520,00 | 100,974.47 |
| April 2027 | 22 | 176 | 405 | 71.280,00 | 96,352.50 |
| May 2027 | 21 | 168 | 405 | 68.040,00 | 91,730.53 |
| June 2027 | 22 | 176 | 405 | 71.280,00 | 96,352.50 |
| July 2027 | 22 | 176 | 405 | 71.280,00 | 96,352.50 |
| August 2027 | 22 | 176 | 405 | 71.280,00 | 96,352.50 |
| September 2027 | 22 | 176 | 405 | 71.280,00 | 96,352.50 |
| October 2027 | 21 | 168 | 405 | 68.040,00 | 91,730.53 |
| November 2027 | 22 | 176 | 405 | 71.280,00 | 96,352.50 |
| December 2027 | 23 | 184 | 405 | 74.520,00 | 100,974.47 |
All minimum wage payments made up to December 31, 2026, are calculated at a net rate of RSD 371 per working hour, whereas all payments made from January 1, 2027, onwards are calculated at RSD 405 per working hour, regardless of the month for which the payment is made.
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