How the salary system works in Albania
The wage system in Albania is regulated by the Labor Code (Law No. 7961/1995 as amended), Law No. 7703/1993 on Social Insurance, Law No. 29/2023 on Income Tax and decisions of the Council of Ministers. Every employer has a legal obligation to correctly calculate wages, withhold mandatory contributions and remit them to the tax authorities by the 20th of the following month. Late payment entails daily penalties and administrative fines.
From gross salary to total employment cost
Gross salary includes basic salary and allowances (night shifts, overtime, seniority, risk). Social security contributions (9.5%), health insurance (1.7%) and payroll tax on a progressive scale are deducted from gross salary. The employer additionally pays his own contributions – the total cost of employment is approximately 116.7% of the gross salary. We calculate salaries for dozens of companies in Tirana with guaranteed accuracy.
Salary limits – minimum and maximum
The minimum wage in Albania for 2025 is 40,000 lek gross per month — established by the Council of Ministers Regulation No. 77/2025 and is mandatory for every employee with a full-time employment contract. No employee may be declared with a salary below this level, regardless of the schedule, type of contract or probationary period. Violation entails a fine of 50,000–100,000 lek per employee.
Maximum limit for insurance premiums
The maximum salary for calculating social contributions is 176,416 lek gross per month (Decree No. 77/2025) – contributions are calculated only up to this amount, even if the actual salary is significantly higher. Above this limit, the employee and the employer do not pay additional insurance contributions, but the payroll tax continues to apply without restrictions. These limits are periodically reviewed by the government – we update the calculations immediately after each change.
Mandatory contributions and employer obligations
The employer in Albania has significant financial obligations beyond the net salary: he pays 15% social security contributions and 1.7% health insurance contributions from the gross salary of each employee as his own contribution. The employer also withholds and transfers the employee’s share: 9.5% social security + 1.7% health insurance + payroll tax on a progressive scale.
Deadline for filing declarations and payments
The total amount of contributions (employer + employee) is 27.9% of the gross salary. The employer submits a monthly salary statement to the General Tax Directorate by the 20th and pays contributions within the same period through the bank. Late or incomplete payment entails penalties and administrative fines. We calculate, declare and monitor the payment of contributions for each client.
Employee declaration and payroll
Every month, the employer submits via the e-filing platform to the tax office:
- social insurance payroll with data for each employee (name, personal number, gross salary, contributions, working days);
- salary tax declaration with the amount of tax withheld and paid;
- additional forms for employees on sick leave, maternity leave, or vacation.
Informal employment and fines
The employee register must be updated before starting work – unofficial employment (without registration) entails a fine of 500,000 lek per employee (Law No. 9920/2008, Article 119/4). Errors in payroll records (salary below the minimum, incorrect contributions) lead to additional fines and the need for retroactive corrections. We prepare and submit payroll records for our clients on a monthly basis, ensuring accuracy and full compliance with deadlines.