Entity and internal acts. Make sure your company is duly registered and that your internal acts (e.g., a general employment rulebook, if applicable) align with the Labour Law. Salaries must be agreed as gross in contracts, as gross pay is the basis for personal income tax and social contributions.

Equal pay & non-discrimination. Employers must guarantee equal pay for the same or equivalent work and avoid requesting protected personal information (e.g., pregnancy status) during hiring.

Minimum wage. As part of the “Europe Now 2” program, Montenegro sets net minimums by education level: €600 net for roles requiring up to a secondary-school diploma and €800 net for roles requiring a university degree. Contracts and payroll planning should respect these thresholds.

Indefinite vs. fixed-term. An indefinite-term contract is the default, but fixed-term contracts are permitted in narrowly defined situations (e.g., seasonal work, temporary replacement, project-bound roles). The maximum fixed-term duration is 36 months (including extensions).

Probation (trial) period. You may include a probation period, up to six months. During probation, either side may terminate with a short notice period (no less than five working days), provided this is built into the employment contract.

Part-time and remote work. Part-time arrangements are allowed. You may also agree to perform work at or outside the employer’s premises (including telework), provided the contract clearly defines supervision, equipment use/compensation, and expense rules.

Mandatory contract contents. Every contract should include: employer and employee details, job title and duties, workplace, gross salary, working hours, leave and benefits references, discipline standards, and termination/notice provisions. Good practice is to reference your internal acts and the applicable collective agreement (if any).

Single registration (JPR). Employers complete a “single window” registration of employment by filing the JPR form with the Revenue and Customs Administration—within 8 days from the employee’s start date. This single filing connects the hire to the relevant state registers for tax and social insurance.

Monthly pay cadence. Pay wages at least once per month and, as a rule of practice, for the prior month by the 15th of the current month. Maintain payslips and calculation files that reconcile net pay, income tax, local surtax, and social security contributions.

Personal income tax (PIT) on salaries (progressive):

• 0% on the gross portion up to €700

• 9% on the gross portion €701–€1,000

• 15% on the gross portion above €1,000

Local surtax on PIT: municipalities levy a surtax on the PIT due (not on salary). The general surtax rate is 13%; Podgorica and Cetinje apply 15%.

Social security contributions (SSC):

• Pension & disability (PIO): 10% employee; 0% employer

• Unemployment insurance: 0.5% employee and 0.5% employer

• Health insurance contributions: 0% (abolished on wages under current regime)

• Additional statutory employer burdens that commonly apply in payroll practice include Labour Fund (0.2%) and Chamber of Commerce (0.27%) on the relevant base; plan for these in cost-to-company budgeting.

Minimum wage checkpoints. Ensure that net outcomes meet the €600/€800 net floors based on the role’s education requirement. Work offer letters should reflect the gross that delivers those nets after PIT, surtax, and SSCs.

Benefits-in-kind. Benefits in kind are generally taxed at 15% PIT. Keep clear records and apply taxation appropriately.

Standard hours. Full-time work is 40 hours per week (you can set fewer by internal act, but not below 20 hours weekly for part-time roles).

Overtime. Overtime is permissible for justified business reasons, with two key guardrails:

• Annual cap: up to 250 overtime hours per year per employee.

• Premium: at least +40% pay uplift per overtime hour (on the gross base used for calculation).
  Use internal approvals and timesheets to evidence necessity and compliance.

Annual leave. Employees are entitled to a minimum of 20 working days of paid annual leave per year. Seniority, job demands, work conditions, and education level may justify additional days via your internal act or contract. Pro-rating applies if the employee has not completed a full year of service.

Short paid absences. Employees are entitled to paid leave for specific events (e.g., marriage, birth, close family death, blood donation) in amounts set by law/internal act.

Sick leave. The employer pays salary compensation during medically certified temporary incapacity (generally 70% for non-work injuries/illness up to 60 days; 100% for work injuries/occupational disease). Extended cases may shift to the competent fund per procedure.

Maternity/parental leave. Paid pregnancy and maternity entitlements are tied to prior average salary; the Social Security Fund covers benefits (not the employer) during statutory periods. Plan for job protection and reintegration.

Employee resignation. Employees must give written notice; the notice period can’t be shorter than 30 days (unless a longer period is set by contract or collective agreement).

Employer-initiated termination. Prior to dismissal, the employer must warn in writing, state the grounds, and give the employee at least 8 days to respond. Where lawful grounds exist and due process is observed, employment may be terminated; severance may be required depending on the ground.

Special protection. Termination is prohibited during pregnancy, maternity/parental leave, and certain protected absences. Ensure any performance- or conduct-based processes are documented, consistent, and proportionate.

Unified residence and work permit. Non-citizens generally require a temporary residence and work permit (a “single permit”). Employer and employee cooperate through the steps: (i) labour-market clearance/approval as applicable, (ii) visa D (if required) application abroad, (iii) local residence registration after entry, and (iv) a joint application for the single permit in Montenegro. Permits are typically valid for one year and aligned with the employment contract term.

Documentation. Expect: clean criminal record (recent), proof of accommodation (notarized lease/ownership proof), education documents (with recognition as needed), medical check, proof of health insurance for the application period, company registry extract, drafted employment contract meeting the €600/€800 net baseline, and passport validity comfortably exceeding the intended permit duration.

Renewals. File no later than 30 days before expiry. Keep payroll registration and permit validity aligned—contracts cannot exceed the permit’s validity.

Montenegro’s framework aims for clarity: gross-based contracts, progressive PIT with local surtax, streamlined SSCs, minimum net wages tied to education level, and well-defined working-time and leave rules. If you put clean documentation around contracts, registration, payroll calculations, and overtime/leave tracking—and you map foreign-hire permits to contract terms—compliance becomes a repeatable process rather than a scramble.

Need a done-for-you setup or a compliance audit? Book a paid consultation with Relocation Montenegro and we’ll implement everything end-to-end—from contract templates and payroll setup to foreign-hire permitting and internal policies.