Your startup just landed a major client. You need to scale fast, but talent in San Francisco costs a fortune, and Berlin’s market is saturated. Then someone mentions hiring in Albania. Not the Albania you might remember from old news clips, but a country quietly building one of Europe’s most compelling tech ecosystems.
According to Elez Biberaj, chief of Voice of America’s Albanian Service, “Albania boasted the fastest-growing economy on the continent.” The country hosts a promising tech talent pool, with IT as the most rapidly growing sector of its economy. Software engineers with a couple of years’ experience earn around US$1,260 to $2,508 monthly, while their counterparts in Western Europe command nearly triple that amount. But this is not just about cost savings. Albania’s ICT sector now contributes 2.3% to the national GDP as of 2024, up from 2% in 2018, and employs over 40,000 professionals across more than 3,300 active enterprises in the information and communications sector.
What really sets Albania apart is the convergence of factors that global employers dream about. The workforce speaks excellent English, thanks to a robust education system producing 160,000 university graduates annually. Location matters too. Albania sits at the crossroads of Southern Europe, sharing time zones with major European markets while offering easy access to both EU countries and emerging Balkan economies.
Recent surveys show that over 70% of Albanian professionals now prioritize workplace flexibility over traditional benefits, making them ideal candidates for remote and hybrid work arrangements. In turn, there’s heightened interest among global employers to hire in Albania, and here’s why.
Albania’s labor market: Potential for foreign employers
Here’s what the numbers show: Albania’s labor market is having a moment. Employment rates have hovered around 69% throughout 2025, with labor force participation reaching an all-time high of 76.7%. Wages are also climbing, up 11.6% in early 2025 to approximately $750 per month. But scratch beneath these optimistic statistics and you’ll find a labor market caught between growth and growing pains.
The reality is messier than the headlines suggest. While employment numbers look impressive, most new jobs are popping up in service sectors known for informal contracts and temporary work. Meanwhile, industry barely budged with just 0.1% growth, and agriculture shed 9.3% of its workforce. This creates a peculiar situation: people are working, but the quality and stability of those jobs remain questionable.
Certain initiatives are in effect to combat high youth unemployment rates, such as the Youth Guarantee. According to UNICEF, “In Albania, where 24.6% of youth aged 15-29 are neither in employment, education, nor training (NEET), the Youth Guarantee is more than a policy—it’s a game changer. Since its launch in November 2023, 543 young people across Albania have found new opportunities through this programme.” Initiatives like these are raising eyebrows of global employers seeking Europe’s lesser-tapped talent pools.
How to hire employees in Albania
So you’ve decided Albania fits your talent strategy. Now comes the practical question: how do you actually hire someone there? Foreign companies have two main paths, each with different trade-offs between speed and control.
Establishing a local entity
The traditional route means establishing your own Albanian subsidiary. You get complete control over hiring, employee relationships, and company culture. You’ll handle employment contracts, payroll, and social security contributions. The upside is total autonomy. The downside is significant administrative overhead and navigating local labor laws, termination procedures, and obtaining work permits for foreign hires (not to mention the range of hidden costs of entity setup).
Hiring via an Employer of Record (EOR)
The faster approach involves partnering with an EOR that becomes the legal employer of your Albanian team members. An Albanian EOR can handle contracts, payroll, taxes, and compliance while you focus on managing the actual work. This makes sense for companies testing the Albanian market or those who want to hire quickly without months of entity setup. You’re trading some control for convenience—adapting to their procedures rather than crafting your own.
Handling employment contracts in Albania
Here’s where things get straightforward and where you can’t afford to mess up. Albanian law requires written employment contracts. You have exactly seven days from the employee’s start date to get this paperwork sorted, or you’re looking at fines up to thirty times the minimum monthly salary—that’s roughly US$9,000 for a piece of paper.
Your contract needs to cover the basics: job title and description, salary and payment terms, working hours, and whether it’s fixed-term or indefinite. Fixed-term contracts can run up to three years maximum, while indefinite contracts offer more flexibility for long-term hires. Most employers include a probation period of up to three months, giving both sides an escape hatch with just five days’ notice if things don’t work out.
The contract must be in Albanian—no exceptions—and specify all terms clearly to avoid disputes down the road. Think of it as your legal foundation; everything else builds from here.
Working hours, holidays, and leave
Albanian work culture revolves around a standard 40-hour week spread over five days. Anything beyond that counts as overtime and must be compensated at 1.5 times the regular rate. Work on weekends or public holidays requires at least a 25% wage supplement plus equivalent paid time off—companies can’t just throw money at the problem and expect people to work nonstop.
The leave system is generous by regional standards. Employees get 22 paid vacation days annually, plus a robust family leave structure. Maternity leave extends for a full year, with fathers getting three additional days for paternity leave. The country also recognizes life happens—five paid days for marriage, five for family deaths, and up to 15 days annually for child sickness when kids are under three years old.
Standard employee benefits and social contributions
The math here is simple but significant: total social contributions run about 25% of gross salary. Employers contribute 16.7% (15% for social insurance, plus 1.7% for health insurance), while employees chip in 11.2%. You’re responsible for withholding the employee portion and remitting the full amount to authorities by the 20th of each month.
Here’s what this covers for your employees:
- Comprehensive health insurance through the national system
- Social security benefits, including unemployment and disability coverage
- Retirement pension contributions
- Work accident compensation (up to 12 months at 100% of average salary)
- Family leave benefits
The minimum wage sits at 40,000 Albanian lek per month (roughly US$400), but most skilled professionals command significantly higher salaries. These contributions aren’t optional—they’re the price of doing business legally in Albania.
Understanding payroll and taxation in Albania
Payroll processing in Albania follows a monthly cycle with specific deadlines that matter. You must register new employees with tax authorities at least one working day before their start date—not on the day, but before the day. Miss this deadline and you’re non-compliant before your employee even walks through the door.
The tax system includes one quirk worth noting: employees can only submit a personal status declaration with one employer per month. If someone works multiple jobs, they choose which employer gets the tax benefit, and the others calculate income tax on gross salary without deductions. For most international companies hiring full-time staff, this won’t matter, but it’s crucial for contract or part-time arrangements.
Processing happens through the government’s online portal at tatime.gov.al, where you’ll submit monthly declarations and contributions. The system is digital-first, which streamlines compliance but means you need reliable local support to navigate the Albanian-language interface and changing requirements.
Managing employee vs. contractor classification
Here’s where companies get into serious trouble if they guess wrong. Albanian authorities don’t care what you call someone in a contract—they look at how the relationship actually works. Misclassify a worker and you’re facing fines ranging from 10 to 50 times the minimum wage, plus backdated payroll taxes and employee benefits. For a single misclassified worker, that could mean penalties exceeding $15,000.
The key factors that determine classification revolve around control and independence. If you’re dictating when someone works, how they complete tasks, and where they do the job, you’re describing an employee relationship. True contractors control their own methods, work for multiple clients, and bear financial risk for their success or failure. They provide their own tools and operate as independent businesses, not integrated parts of your company structure.
Albanian labor law treats this distinction seriously because contractors fall under Civil Code rather than Labor Code protections. Employees get paid leave, health insurance, and job security. Contractors get project-based payments and handle their own taxes and insurance. The financial and legal stakes make proper classification essential from day one.
Termination and severance in Albania
Albanian employment law protects workers through structured termination procedures that vary based on contract type and tenure. For indefinite contracts, you must provide advance notice ranging from one to three months, depending on how long the employee has worked for you. During probationary periods (up to three months), either party can terminate with just five days’ notice.
“Non compliance with the procedure and notification period term opens the employer up to payment of two months salary (in case of non compliance with the procedure); payment of a month’s salary to the employee for the notice period; and eventual payment of the accrued leave and seniority bonus,” advises Renata Leka, legal partner at Boga & Associates of Albania.
Severance pay requirements depend on the reason for termination and length of service. When terminating for economic reasons or company restructuring, employees typically receive compensation based on their tenure and salary. The process requires documented justification and proper notice periods to avoid wrongful termination claims. Albanian courts tend to favor employees in disputed cases, making careful documentation crucial for any termination decision.
Immigration and work permits
Foreign nationals need both work permits and residence permits to legally work in Albania, with the process prioritizing Albanian and EU citizens first. The system operates on a quota basis, meaning your timing and the specific role matter for approval chances. Most work permits are issued for one year initially, with renewals possible based on continued employment and compliance.
Here’s what the application process typically involves:
- Labor market test. Employers must demonstrate they couldn’t fill the position with local talent
- Documentation requirements. Educational credentials, criminal background checks, and health certificates
- Processing timeline. Applications can take 30 to 60 days, though complex cases may extend longer
- Permit fees. Costs vary by permit type and duration, typically ranging from $100 to $300
- Employer sponsorship. Companies must guarantee employment and sometimes provide financial guarantees
The process gets smoother once you establish a track record with Albanian immigration authorities. Many companies work with local legal firms to navigate the bureaucracy and ensure applications meet current requirements, which can shift based on policy changes or processing backlogs.
Hiring in Albania with Pebl
Instead of navigating Albanian employment law alone, Pebl handles the complexity for you across Albania and 185+ other countries worldwide. As the legal employer of your Albanian team members, our global EOR services handle everything from contracts and payroll to compliance with local labor regulations, so you can focus on what your new hires actually do rather than the paperwork behind hiring them.
With large in-country HR and legal teams providing deep Albanian expertise, Pebl offers the local knowledge you need with the global infrastructure to scale your operations seamlessly. It’s the difference between spending months setting up entities and spending days getting your team productive. Get in touch to learn more.
FAQs: Hiring in Albania
These are the questions that come up in every conversation about Albanian hiring. Here’s what you need to know.
Can I hire Albanian employees without a local business entity?
Yes, absolutely. This is where Employer of Record services shine. An EOR becomes the legal employer of your Albanian team members, handling all compliance, payroll, and legal requirements while you focus on managing the actual work. You get access to Albanian talent without the months-long process of setting up a subsidiary or navigating local employment law yourself. It’s like having a local HR department without actually building one.
What is the work culture in Albania?
Albanian work culture blends Mediterranean warmth with a serious work ethic—people are hardworking and passionate about their jobs, often staying late to finish tasks. Business revolves around relationships and trust, so expect meetings to start with personal conversation about family and health before diving into work topics. Communication is generally direct but respectful, with a clear hierarchy that values authority and seniority. Face-to-face interactions matter more than emails, and building personal connections often precedes formal agreements.
What is the IT sector in Albania?
Albania’s IT sector is experiencing explosive growth at 12.71% annually, transforming from an overlooked player into Southeast Europe’s rising tech hub. The sector now contributes 2.3% to national GDP, employs over 40,000 professionals across 3,300+ enterprises, and has seen IT services exports surge from €68.4 million in 2018 to €155.3 million in 2022.
The industry spans software development, IT outsourcing, fintech, cybersecurity, and digital banking, with companies from Europe and North America choosing Albania for its skilled workforce, cost efficiency, and strong English proficiency. With 2,500 IT engineers graduating annually and government policies encouraging foreign investment through tax incentives and simplified regulations, Albania is positioning itself as the region’s next major outsourcing destination.
This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.
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