What employment tax incentives are valid until the end of 2025?

For several years now, Serbia has provided various tax and social relief measures for employers hiring specific categories of workers. These incentives aim to encourage employment and innovation in the economy while reducing unemployment.

All current measures were introduced at the end of 2021 and came into effect at the beginning of 2022. So far in 2025, no new tax incentives related to employee salaries have been introduced, but some existing measures have been extended.

At present, there are a total of seven tax relief measures for employers hiring new employees. Two are extended on a yearly basis, one is valid until the end of 2025, while four have no application time limit. These incentives are regulated by the Personal Income Tax Act, the Social Security Contributions Act, and other by-laws that define the conditions and procedures for claiming these benefits.

It is important to note that a “newly employed person” refers to an individual with whom an employer has signed an employment contract and who is registered for mandatory social security in the CROSO system. However, if the person was previously employed by an employer affiliated with the current employer or would have been if the affiliated entity had not ceased to exist, they cannot be considered a newly employed person.

Tax advisor Svetlana Serafijanović emphasizes that only one of the available tax incentives can be used at a time throughout the entire duration of the measure.

Tax incentives for hiring individuals from the National Employment Service (NES) register

These incentives apply to employers hiring individuals who were previously unemployed and registered with the NES.

Tax incentives for hiring founders of innovation companies

This measure applies to founders of companies engaged in innovation who employ themselves within their own enterprise. The founder must be employed by their own company and hold at least a five percent ownership stake. Additionally, the employer must not have affiliated legal entities or, if they do, must not generate more than 30 percent of their revenue from them.

By using this incentive, the employer is fully exempt from payroll tax and social security contributions.

The relief is valid for 36 months from the date of company establishment, with a maximum gross salary exemption of 150,000 dinars per month.

Incentives for employees engaged in research and development (R&D)

To qualify for this incentive, according to tax advisor Serafijanović, the employee must be directly engaged in research and development activities, excluding administrative or supervisory roles.

“The employer must be a legal entity conducting research and development within its operations for its own needs. In this case, they are entitled to a 70 percent exemption from payroll tax and a full exemption from pension and disability insurance contributions,” explains Serafijanović.

This incentive remains valid for the entire duration of the research project.

Incentives for newly relocated employees

These incentives target highly qualified professionals relocating to Serbia for employment. To qualify, the employee must not have predominantly resided in Serbia in the past two years and must have a monthly gross salary exceeding 393,855 dinars.

For employees under the age of 40 returning to Serbia after studying abroad, the minimum gross monthly salary requirement is 262,570 dinars.

If these conditions are met, the employee is entitled to a 70 percent reduction in the tax and social security contribution base. The incentive lasts for five years from the date of signing the employment contract.

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