INVEST IN REPUBLIC OF NORTH MACEDONIA (Labor costs edition)

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The right place for your business is the Republic of North Macedonia. Why?

The Republic of North Macedonia is offering excellent conditions for your business such as:

  • Setting up a company can be done in a short time.
  • Free of charge (administrative costs and other fees).
  • Low costs for operating your business including low taxes, employment costs, and fair average salaries.

Here is some information regarding costs of employment and some general rules regarding the Labor Law.

For more details, please feel free to contact us.

1. Working hours

Full-time work must not exceed 40 hours a week.

The employer is responsible for the distribution and redistribution of the working hours. The working hours shall be distributed in accordance with the nature or organization of the work, or the needs of the customers. In the course of distributing and temporary redistributing of full-time work, the working hours must not exceed 40 hours a week or be less than four hours a day.

2. Overtime Work

Overtime work may last no longer than 8 hours a week with a maximum cap of 190 hours a year, except for work which cannot be terminated due to specific processes of operations or for work without conditions or possibilities to be organized in shifts. Also, the overtime work within three months cannot exceed 8 hours per week.

The employer shall be obliged to pay except the extra payment, which is a bonus in the amount of one average salary in the Republic of North Macedonia, to the employee who worked over 150 hours longer than the full working time, and was not absent from work for more than 21 days during the year with the same employer.

3. Breaks and rests

Any employee who works 6 hours or longer shall be entitled to a daily break of 30 minutes during business hours.  Part-time employees shall have the right to a 15-minute break, contingent on working at least 4 hours that day. In case of uneven distribution or temporary redistribution of working hours, the break time shall be fixed in proportion to the length of the daily working time. The break may be determined no earlier than after two hours of the work shift and no later than three hours before the end of the work shift. The break during the work day shall be included in the work time, and salary shall be paid for it.

The employee shall have the right to a rest and recovery period of at least 12 uninterrupted hours between two successive working shifts in a 24-hour period.  The employee shall have the right to a weekly rest of at least 24 uninterrupted hours plus 12 hours of daily rest as referred to in Article 133 of the Labor Law. As a rule, the day of the weekly rest shall be Sunday.

4.Annual leave

The employee shall have the right to annual leave of at least 20 work days.

The annual leave may be prolonged to 26 work days with a collective agreement or an employment agreement.

An older employee (men older than 59 or women older than 57), a disabled employee, an employee with at least 60% physical impairment, or an employee who takes care of a physically or mentally handicapped child shall have the right to an additional three work days of annual leave.

On the basis of the Law on Labor Relations and the General Collective Agreement for the Private Sector in the Economy, annual leave is determined in the following manner:

– 5 years                                           20 days

– from 5 to 10 years                        21 days

– from 10 to 15 years                     22 days

– from 15 to 20 years                     23 days

– from 20 to 25 years                     24 days

– from 25 to 30 years                     25 days

– more than 30 years                     26 days

Annual vacation increases for:

– 7 (seven) working days for employees younger than 18 years old,

Employees who have signed a part-time employment contract have the right to annual leave with a minimum duration of 10 (ten) working days.

The employee is entitled to paid vacation for personal and family circumstances for up to 7 working days during the year in the following cases:

– for marriage ………………………………………………………………….………………………        3 days

– for marriage of a child………………………………………………………………………………        2 days

– for birth or adoption of a child……………………………………………………….…………       2 days

– for death of a spouse or a child ………………………………………………………………..     5 days

– for death of a parent or sibling…………..……………………………………………………..     2 days

– for death of spouse’s parent…………………………………………………………….……….    2 days

– for death of grandfather/mother…………………………………………………………..….     1 day

– for taking a professional or other exam for the needs of the employer………….     3 days

– for natural disasters……………………………………………………………………………….…     3 days 

5. Holidays in Republic of North Macedonia

State Holidays in the Republic of North Macedonia and other holidays determine the number of non-working days during the course of the celebration. In total there are 11 state holidays.

– State Holidays (non-working for all citizens) ………………………………………. 11 days

– Religious:

  • Orthodox Holidays ………………………………………………………………………. +5 days;
  • Muslim Holidays…………………………………………………………………………… +2 days;

***If a holiday falls on Sunday, the following day shall be deemed non-working. In the non-working days, referred employees hold the right to salary compensation; that is, an increased salary in accordance with law and collective agreement.

6. Salaries and other payments regarding Labor Law.

The salary shall comprise basic salary, part of the salary for business performance, and extra payments, unless otherwise stipulated by another law. The basic salary shall be laid down according to the level of difficulty of the work for which the employee has established in the employment contract.

Minimum salary

The employee’s salary for carrying out full-time work may not be lower than the minimum salary determined by the law and the collective agreement.

According the official numbers from the Public Revenue Agency, the minimum salary in R. North Macedonia is 18.008 MKD (gross salary) which is 292 EUR, while the minimum net salary is 12.550 MKD which is 204 EUR. 

These percentages must be paid for contributions which are part of the salary:

  • Contributions for mandatory pension and disability insurance 18,8%
  • Contributions for mandatory health insurance – 7,5%
  • Mandatory contribution for unemployment insurance– 1,2%
  • Additional contribution for mandatory health insurance in case of work injury and occupational disease- 0,5%

Also there is the personal tax:

  • 10% – Tax base for calculation of personal income tax with 10% (for a tax base below 90,000 MKD);
  • 18% – Tax base for calculation of personal income tax with 18% (for tax base above 90,000 MKD);

 The basic salary of the employee increases by the hour for:

– overtime ………………………………………………………..           35%

– work at night ………………………………………………….           35%

– work in three shifts …………………………………………           5%

– work on a day of weekly rest ……………………………           50%

– work on holidays and non-working days determined by the law, the employee has the right to salary compensation that belongs to the employee when the employee does not work on those days and salary for the spent hours of work increased by………………………………………………………….             50%.

***The basic salary of the employee increases by 0.5% for each year of working.

 Compensation for Expenses Related to Work

 The employee shall be entitled to compensation for the following expenses related to work:

  1. Business trip.
  2. Field allowance.
  3. Use of private vehicle for business trips.
  4. Separation allowance business trip.
  5. Death of the employee or a member of his or her family.

The employee is entitled to severance pay at the time of their retirement, as well as to jubilee awards.

The amount, basis, and period of calculating and disbursing the compensation for these expenses shall be regulated by collective agreement.

The employer, at own cost, may organize the transportation for employees to and from the work place, as well as nutrition during work.

The costs for nutrition may amount up to 20% of the average net salary per employee paid during the previous year, and the costs for transportation in the amount of the actual costs in the public transportation.

Average salary

 Regarding the official data from the Public Revenue Agency and State Statistical Office the average salary in Republic of North Macedonia is 36.386 MKD (gross salary) which is 591 EUR or net salary of 24.517 MKD which is 398 EUR.

7. Absence from Work due to Pregnancy, Childbirth, and Parenthood

The female employee shall be entitled to a continuous 9-month paid leave during the period of her pregnancy, childbirth, and maternity. The continuous paid maternity leave is increased to 15 months if she gives birth to more than one child (twins, triplets etc.). On the basis of the opinion issued by the competent healthcare body, the female employee may begin her maternity leave 45 days, and obligatorily, 28 days before childbirth.

The employee, who is on a parental leave due to pregnancy, childbirth, and parenting, i.e. taking care and protecting the child, shall be entitled to salary compensation (100%) in accordance with the Labor Law, other laws, and collective agreements, as paid for by the Fund for Healthcare Insurance Skopje.

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