Serbia – New Increased Enforcement of Local Payroll Rule

What has changed

Expats on a Secondment Work Permit (e.g working on foreign payroll) will be granted a Work Permit for a period of one (1) year. After this time, they will need to secure a Work Permit on local payroll based on their Serbian (local) work contracts. Previously, an expat could continue their assignment and renew their Work Permit multiple times on foreign payroll. A secondment Work Permit cannot be renewed after the first year, and the renewal application will be considered a new application for a Local Payroll Work Permit.

Additionally, when a work permit holder is transferred from foreign to local payroll, the Serbian entity will have to pay the government contributions (taxes) for the assignee and pay the salary from a Serbian bank account in Serbian dinars to the assignee. This law was previously issued in 2014; however, the practice has been made mandatory in May 2017.

Who is affected?
  • All clients who intend to send employees to Serbia on long-term assignments (more than one (1) year)
What to expect
Exception: Expats from countries with social security agreements with Serbia (mentioned below)can extend their permits for an additional year (i.e. up to two (2) years). After the second year of the assignment, the payroll has to be transferred from foreign to local payroll.
  • Austria
  • Belgium
  • Bosnia and Herzegovina
  • Bulgaria
  • Canada
  • Croatia
  • Cyprus
  • Czech Republic
  • Denmark
  • France
  • Germany
  • Great Britain
  • Hungary
  • Italy
  • Libya
  • Luxembourg
  • Macedonia
  • Montenegro
  • Netherlands
  • Norway
  • Panama
  • Poland
  • Romania
  • Slovakia
  • Slovenia
  • Sweden
  • Switzerland
  • Turkey
What you need to do
Planning ahead
  • All clients intending to send their employees to work in Serbia for more than one (1) year should consider transferring them to local Serbian payroll, enrolling them in the national social security program, and conducting a labor market test. Additionally, if they intend to extend the employee’s assignment beyond a year, the employee must have a local employment contract with the local Serbian entity.
  • Contact your Emigra Worldwide representative for further details on how these updates may impact you or your client.