Montengro
Knowledge Base
Frequently asked question, important data and information on EOR.
General information
533 euros per month
Labor Law
Laws that regulate Labor Relationship
The laws that regulate labor relationships in Montenegro include:
•The Labor Law
•The Law on Employment and Unemployment Insurance
•The Law on Foreigners
•The Law on Occupational Safety and Health
Onboarding guide
Requirements for a labor contract
A labor contract in Montenegro must be in writing and contain information on the identity of the employer and employee, job title, duration of employment, place of work, working hours, salary, and any additional benefits.
Pre-hire Medical exam
Medical examinations are not required to onboard a new hire in Montenegro.
Types of contracts
Montenegro permits fixed-term, indefinite, and part-time labor contracts.
Probation Period
The probation period in Montenegro is usually three months but may be extended to six months.
Are offer letters mandatory in the country?
Offer letters are not mandatory in Montenegro, but it is recommended to have one for clarity.
Are digital signatures in labor contracts valid?
Yes, digital signatures are valid in labor contracts in Montenegro.
Mandatory onboarding documents
The mandatory documents to hire an employee in Montenegro are a labor contract, ID or passport, and social security registration form.
Statutory benefits
Annual Bonus
There is no statutory 13th-month salary bonus for employees in Montenegro.
Additional bonus
Statutory bonuses for employees in Montenegro include a holiday bonus, a performance bonus, and a loyalty bonus.
Leaves (medical, maternity, paternity, etc.)
In Montenegro, employees are entitled to several types of leave, including:
• Sick leave: Employees are entitled to paid sick leave in the event of illness or injury. The length of sick leave entitlement varies depending on the employee’s length of service and the nature of their illness or injury. During the first year of service, employees are entitled to up to 30 days of sick leave per year, while employees with more than one year of service are entitled to up to 60 days of sick leave per year. In some cases, such as serious illness or injury, the entitlement may be extended.
• Maternity leave: Female employees are entitled to 18 weeks of maternity leave, with the option to extend for an additional four weeks in the case of complications or multiple births. During maternity leave, employees are entitled to full pay.
• Parental leave: Both male and female employees are entitled to parental leave following the birth or adoption of a child. Employees are entitled to up to six months of unpaid parental leave, which may be taken in one or more blocks.
• Marriage leave: Employees are entitled to one day of paid leave for their own marriage, and one day of paid leave for the marriage of a child.
• Bereavement leave: Employees are entitled to up to three days of paid bereavement leave in the event of the death of an immediate family member.
• Religious leave: Employees are entitled to unpaid leave to observe religious holidays or practices, as long as the leave does not disrupt the functioning of the employer’s business.
It’s important to note that some of these leaves may be subject to specific requirements or limitations, such as providing advance notice to the employer or providing a medical certificate in the case of sick leave.
Annual Leave (days per year)
Employees in Montenegro are entitled to 20 days of annual leave in their first year of employment, which increases by two days per year up to a maximum of 30 days after 10 years of service.
How do vacation days expire?
Unused vacation days expire at the end of the year.
Official Holidays
The official holidays for 2023 in Montenegro are:
• 1 Jan, New Year’s Day
• 6 Jan, Orthodox Christmas Eve
• 7 Jan, Orthodox Christmas
• 14 Apr, Orthodox Good Friday
• 17 Apr, Orthodox Easter Monday
• 1 May, Labour Day
• 2 May, Orthodox Easter Tuesday
• 9 May, Victory Day
• 21 May, Independence Day
• 24 May, Independence Day Holiday
• 13 Jul, Statehood Day
Working on holidays and Sundays
Working on public holidays and Sundays is allowed in Montenegro, and its pay is according to the labor contract and the collective contract
Number of Working hours
The statutory working hours per week in Montenegro are 40 hours, and the maximum working day is 8 hours.
Overtime
Overtime in Montenegro is limited to 20 hours per week, and employees are entitled to at least 30% extra pay for their work.
Social Security (what does it cover)
Social security in Montenegro covers health insurance, pension insurance, disability insurance, and unemployment insurance.
Payroll
Salary payment currency
Euro (EUR).
Can salary be paid in a different currency other than the local currency?
According to the Law on Labor of Montenegro, salaries must be paid in the national currency, which is the Euro (EUR). There is no provision for payment in any other currency.
Payment frequency
The typical payment frequency for employees in Montenegro is monthly.
VAT percentage
21%.
Income Tax
As of 1 January 2022, progressive taxation of salary and income earned by entrepreneurs is introduced. A proportional 15% tax rate is introduced for other types of income. For more information see https://taxsummaries.pwc.com/montenegro/individual/taxes-on-personal-income
Tax Payer Identification Number
Taxpayer Identification Number – PIB (Poreski Identifikacioni Broj)
Offboarding
Voluntary resignation
Employees in Montenegro are generally free to resign from their employment at any time, but they must provide their employer with a notice period in advance. The notice period for employees is typically 30 days, but it may be longer depending on the terms of the employment contract.
Contract termination
A labor contract in Montenegro can be terminated in several ways, including:
• By mutual agreement between the employer and the employee
• By the employer for justified reasons, such as the employee’s incompetence, misconduct, or breach of the employment contract
• By the employer for economic reasons, such as the company’s restructuring or closure
• By the employee for justified reasons, such as the employer’s failure to fulfill their obligations under the employment contract
• By the employee due to retirement, disability, or death
Justified Dismissal
In Montenegro, the Labor Law sets out several grounds for justified dismissal, including:
• Redundancy or restructuring of the company
• Employee’s inability to perform assigned duties due to physical or mental incapacity
• Employee’s repeated and unjustified failure to meet their work obligations
• Employee’s violation of work discipline or company rules
• Employee’s conviction for a criminal offense or misconduct related to work
• Employee’s absence from work for a period of time without justification
• Employee’s refusal to perform work tasks that are included in their job description and for which they are qualified
Unjustified Dismissal
If an employee is unjustifiably dismissed, they are entitled to compensation, which varies depending on their seniority level. The compensation ranges from 6 to 18 months of salary.
In Montenegro, severance pay is required by law to be paid to employees in certain cases of contract termination. The amount of severance pay varies based on the employee’s seniority level and the reason for termination. The rules for severance payment in Montenegro for each seniority level are as follows:
• For employees with less than one year of service: no severance pay is required unless otherwise stated in the labor contract or collective agreement.
• For employees with one to five years of service: one-third of the average monthly salary for each year of service is required.
• For employees with five to 15 years of service: one-half of the average monthly salary for each year of service is required.
• For employees with more than 15 years of service: two-thirds of the average monthly salary for each year of service is required.
It is important to note that if an employee is terminated for misconduct, they may not be entitled to severance pay. Additionally, if an employee terminates their contract without justified cause, they may be required to pay the employer an amount equal to one month’s salary as compensation.
Minimum Notice Period
The minimum notice period for terminating a labor contract in Montenegro is 15 days, but it may be longer depending on the terms of the employment contract. The notice period can be up to 30 days for employees who have been employed for less than six months, and up to 60 days for employees who have been employed for more than six months. If the employer terminates the contract, they are required to provide the employee with a written notice explaining the reasons for the termination.
Immigration
Visa process
1. The employee who submits a complete application for a temporary residence and work permit before the expiration of the stay of 90 days may stay in Montenegro until the executive decision.
2. The Ministry shall issue a confirmation on a receipt of the application for a temporary residence and work permit, which shall contain the indicated time limit within which the applicant may take the permit.
3. The application form and the form of the confirmation shall be prepared by the Ministry.
4. An application for issuance of a permit for temporary residence and work shall be submitted by the employee in person to the Ministry in the residence place, on the prescribed form.
5. When submitting a request , the employee is taken from a photograph, fingerprints of two fingers and digitized handwritten signature. Exceptionally, an application for a permit for temporary residence and work can also be submitted to the Ministry by the employer in the intended stay of the foreigner, at the employer’s seat in Montenegro or place of work of a foreigner. The certificate shall be issued for a period of five days.
6. The employee is obliged to, within five days from the date of issue of the certificate notifies to the Ministry in the application submission area so as to provide the aforementioned information . Otherwise, it shall be deemed that the employer withdrew the request.
7. The employee who has been issued a visa for a long-term stay (Visa D) for the purpose of employment, he/she is obliged to submit an application for a permit for temporary residence and work within ten days of the issuance of visas.
Visa documents
The mandatory documents to obtain a work visa in Montenegro include:
• a valid passport,
• a work permit issued by the Employment Agency of Montenegro,
• a visa application form, a photo, a health certificate,
• a proof of sufficient financial means to support oneself while in Montenegro.
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