How to Hire and Pay Employees in Montenegro: A Step-by-Step Guide for Global Employers

Montenegro is part of your global expansion plans, and for good reason. It’s tucked between Croatia and Albania, with a growing tech scene, strong English proficiency, and affordable salaries. But when you start digging into the steps to actually hire someone, it gets complex, fast.

You’ll have to grapple with specific employment laws, unique payroll rules, and a high potential for costly missteps.

This guide breaks it down for you. No fluff, just clear, practical steps to hire and pay employees in Montenegro the right way.

Understanding legal requirements to hire in Montenegro

Before you can legally bring someone onto your team in Montenegro, there are a few things you need to get in order. Whether you’re hiring a Montenegrin national or someone relocating from abroad, compliance starts well before that contract is signed.

Key hiring regulations and labor laws

Montenegro’s employment law is grounded in its Labor Law (Zakon o radu). You’ll need a written contract—always. No handshake deals here.

Here are the contract basics:

• Fixed-term contracts can last up to 36 months. After that, it must convert to a permanent role unless there’s a legal reason to extend it.
• Permanent contracts are more common and are expected for long-term roles.

The national minimum wage is currently €450 per month (as of Q4 2025). A standard workweek is 40 hours, and any overtime has to be paid at 150% of the regular hourly wage.

Your contract should clearly cover working hours, salary, probation periods (up to six months), and notice terms. For example, the longer an employee has been with you, the more notice you’ll need to give if you part ways.

You’ll also need to register employees with tax and social insurance authorities before their first day. And yes, all of that needs to happen before you start onboarding.

Check out the latest details from Montenegro’s Ministry of Labor and Social Welfare.

Work permits and international hiring

Hiring foreign talent? There’s more red tape to cut through, but it’s doable.

First, you’ll usually need to prove that no local talent can fill the role by completing a labor market test. Once that’s done, you submit a work permit application on the candidate’s behalf. The process usually takes 30-45 days, so build that into your hiring timeline.

Only certain roles, typically in IT, tourism, construction, and engineering, are approved for international hiring. Health insurance, a valid contract, and proof of accommodation are all required to get the work permit over the line.

More on that via the Ministry of the Interior.

Avoiding common legal pitfalls

First-time employers in Montenegro tend to trip over the same things:

• Forgetting to register employees before their start date
• Relying on informal or verbal agreements
• Misclassifying workers as contractors when they should be employees

Here’s a simple checklist to keep things on track:

Hiring checklist for employers in Montenegro

• Sign a written employment contract (in local language)
• Register your business with Montenegro’s Central Registry (CRPS)
• Get your tax number (PIB) and register with the Tax Administration
• Register employees for health insurance and pensions
• Ensure social security contributions are set up
• If hiring foreigners, submit work permit applications early

Payroll and compensation processes in Montenegro

Once the contract’s signed, the next hurdle is payroll, and it’s not just about paying on time.

Setting up payroll and contribution obligations

After you register with the Montenegrin Tax Administration, you can handle monthly payroll filings. Here’s what you’ll be on the hook for:

• Personal income tax: 9%
• Pension and disability contributions: 20.5% total (15% from you, 5.5% from the employee)
• Health insurance: 10.5%, all employer-paid

Let’s say your employee makes €1,000 gross monthly:

• They’ll take home about €855, after income tax and pension
• Your total cost comes to €1,255, including your contributions

You’ve got to process payroll monthly and make all payments to the state by the 15th of the following month. Local bank transfers are the standard method.

Managing ongoing compliance and employment obligations

Legal hiring doesn’t end on day one. You’ve got to stay compliant throughout the employee’s time with you.

Ongoing reporting, benefits, and termination

You’re expected to keep clean records: contracts, payroll summaries, benefits documentation—you name it.

When an employee leaves, the required notice period depends on the length of service and reason for termination. You’ll also want to track leave balances and document any changes to employment status, like promotions or salary increases.

Here’s how to stay proactive:

• File taxes and social contributions monthly
• Submit required employment reports each year
• Create a compliance calendar to track key deadlines

Need a backup reference? The European Labour Authority keeps tabs on changes and updates.

Local insights for practical hiring and payment

Even with the paperwork in place, you’ve still got options to consider around how you hire and pay your team.

Choosing a hiring model and payment channel

Here’s how standard hiring models compare:

Most employees expect bank transfers in euros. While cash payments are still legal, they raise red flags with regulators and auditors.

As for salaries, developers typically earn between €1,200 and €2,000 monthly. Admin or service roles usually land in the €600-€1,000 range.

If you don’t want to open a local entity just to hire a few people, working with an Employer of Record can be a smart move. You can also explore our EOR service in Montenegro for a streamlined way to stay compliant.

Tips and resources for a successful application

Ready to get started? A few pro tips:

• Set up a local bank account early for payroll
• Hire a translator or use bilingual HR templates for contracts
• Create a digital onboarding checklist so nothing falls through the cracks

Keep an eye on employment law updates from local ministries. And don’t forget to allow extra time if you’re hiring international candidates who need a work permit.

Using support from EOR providers

An Employer of Record (EOR) acts as the legal employer of your team abroad while you manage their day-to-day work. It’s like having a local HR department without setting one up yourself.

The EOR:

• Handles contracts, onboarding, and payroll
• Pays local taxes and contributions
• Ensures legal compliance in hiring and termination

Working with an EOR in Montenegro means you can skip the months of legal setup and focus on getting your new hire productive from day one. You can learn more in our global hiring + pay blog.

Hiring in Montenegro: Set yourself up for success

Hiring in Montenegro isn’t rocket science, but it does require precision. From work permits to pension contributions, every step matters.

The key? Understand the rules, document everything, and don’t cut corners. When you do things right, you build a foundation for sustainable growth—not just in Montenegro, but across your global workforce.

And when you need support? That’s where Pebl comes in.

How Pebl makes hiring in Montenegro simple

At Pebl, we help growing teams expand into 185+ countries without the hassle of setting up legal entities.

Our EOR service simplifies the complex stuff: contracts, payroll, compliance, and taxes. You get a clear, compliant way to hire in Montenegro, and your new team member gets everything they need to hit the ground running.

No legal guesswork. No payroll panic. Just straightforward global hiring.

Let’s talk about how we can streamline hiring in Montenegro.

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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