Payroll and Benefits Guide - Albania

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Currency

Albanian Lek
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Capital

Tirana
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Employer Taxes

16.70%
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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Albania is known as the land of the eagles due to its significant population of eagles, including the Golden Eagle.

The Albanian language has its own unique alphabet called “Albanian script”

The capital city of Albania, Tirana, is known for its vibrant and colorful buildings.

Albanians have a strong coffee culture.

Albanian weddings are known for their rich traditions.

Their national hero Skanderbeg is the symbol of independence.

Albania

Contributions

Employee Payroll Tax

Contribution TypeRate
Social Insurance9.5%
Health Insurance1.7%

Employer Payroll Tax

Contribution TypeRate
Social Insurance15%
Health Insurance1.7%

Payroll

Payroll Cycle

The payroll cycle in Albania is generally a monthly cycle, with wages paid by the last working day of each month. However, some employees who are paid on an hourly, weekly, and daily basis are paid every two weeks.

13th Salary

There is no 13th salary in Albania.

Work Hours and Week

Standard working hours within Albanian law are 40 hours a week, 8 hours per day for adults (except when an employee is under 18, which will reduce the maximum daily hours worked to 6 hours a day).

Overtime

All work above the standard 40 hours a week is to be paid at a minimum rate of 25% more than the standard pay rate. If work is done during a weekend or public holiday, the minimum rate is 50% more than the standard pay rate. Overtime can be compensated with time off from work rather than payments on the same basis.

Working Week

Monday – Friday
Albania-map

Leave

Paid Time Off

An employee who has completed a full year of service is eligible for 28 calendar days (equivalent to 20 working days) of paid leave. Employees with less than one year of service will receive a proportionate number of leave days based on their tenure.

Maternity Leave

Provided they have been employed continuously for 12 months by the same company, pregnant women have the right to take up to one year of paid maternity leave.

Paternity Leave

The father is eligible for 12 days of paid leave. Additionally, employees with children under three years old are entitled to an extra three days of paid leave.

Termination

Termination Process

In order to initiate the termination process, the employee must provide a written resignation letter to their employer. Immediate termination is possible if there are valid and justified reasons for doing so.

Notice Period

  • 2 weeks’ notice is required for employees leaving within the first six months of employment
  • 1 month’s notice is required for employees leaving between six months and two years of employment
  • 2 months’ notice is required for employees leaving within the second and fifth year of employment
  • 3 months’ notice is required for employees leaving after the first five years of employment
  • During the probation period, 5 days notice is required

Severance Pay

When an employer terminates an employee, the following payments are required:

  • Salary during the notice period
  • A seniority bonus, which is applicable if the duration of employment exceeds three years. The seniority bonus should be at least equal to half a month’s salary for each full year of work, based on the salary at the end of the employment relationship. If the salary is variable, the calculation is based on the average salary for the year.
  • Payment for any unused annual leave, calculated proportionally.
  • Annual bonuses or other compensations should be provided on a prorated basis

In case of immediate termination with justified reasons, the employer has to pay:

  • Salary until the last working day
  • Payment for any unused annual leave, calculated proportionally.

In cases of unjustified dismissal from the employer, the employer has to pay:

  • All obligations as per regulation
  • One year salary.

Probation Period

Probation Period

Probation periods in Albania are typically three months.

Immigration

Foreigners planning to work in Albania may need specific types of employment permits based on their citizenship and the nature of the intended work. These permits include:

  1. Work Registration Certificate: This certificate is applicable for listed activities that last no more than 60 or 90 days.
  2. Employment Declarations: Depending on the circumstances, foreigners may be required to submit employment declarations.
  3. Work Permit: Individuals planning to work and reside in Albania for a period exceeding 90 days within a 180-day timeframe must obtain a work permit.

For Work Permits

  • Type A: Permits for economic activities for both employers and employees
  • Type B: Independent economic activity permits
  • Type C: Permits for special occasions
  • Type D: Permanent work permits for eligible foreigners.

VAT

The standard rate of VAT in Albania is 20.00%