The latest amendments to the Personal Income Tax Act and the Social Security Contributions Act, which will come into effect on 1 January 2024, extend payroll tax and social contributions incentives for hiring unemployed persons until the end of 2024 (the incentives were originally supposed to expire on 31 December 2023).
An employer which hires individuals who have been, immediately prior to accepting the offer, registered as unemployed with the National Employment Service continuously for at least 6 months (in the case of trainees the relevant period is three months) is entitled to a refund of a portion of payroll tax and social contributions that attach to monthly salaries paid to each such newly hired employee, as follows:
- if the number of newly hired employees is from 1 to 9, the employer is entitled to a refund of 65% of the amount paid on the account of payroll tax and social contributions for such employees;
- if the number of newly hired employees is 10 to 99, the refund amount is 70% of the paid payroll tax and social contributions; and
- if the number of newly hired employees is 100 or more, the refund amount is 75% of the paid payroll tax and social contributions.
An employer which qualifies as a “micro” or “small” enterprise in accordance with the Accounting Act can qualify for a refund of 75% of paid payroll tax and social contributions if it hires at least two employees who have been previously unemployed for a period of six months (three months in case of trainees).
This incentive cannot be cumulated with any other incentive related to the payroll tax and contributions with respect to the same employee (e.g. it cannot be cumulated with the incentive applicable to employees who have relocated to Serbia to work).
The amendments to the Personal Income Tax Act have also increased the tax-free amount of monthly salary from RSD 21,712 to RSD 25,000 (approx. EUR 210).