Serbia has quietly become one of Europe’s most compelling hiring destinations. The country is a hub for IT talent, with major players such as Microsoft, Google, and SAP having already established a presence in there. What you should know is that these aren’t just warm bodies filling seats. Serbian developers consistently rank among the top performers in international coding competitions.
The numbers tell part of the story. Serbia’s IT sector has grown by over 20% annually for the past five years. But here’s what the data miss: Serbian professionals often speak multiple languages, work comfortably across European time zones, and bring a particular blend of technical rigor and entrepreneurial spirit that comes from building careers in an emerging market.
What makes hiring in Serbia especially interesting right now is timing. The country occupies a unique position, where world-class talent meets reasonable costs, where EU candidate status offers regulatory stability, and where the government actively courts international businesses with tax incentives and streamlined processes. It’s like finding a great neighborhood just before everyone else does.
What does Serbia’s labor market look like?
Walk into any tech hub in Belgrade or Novi Sad, and you’ll hear a language soup of Serbian and English with an occasional sprinkling of German and French. This linguistic flexibility says something deeper about Serbia’s workforce. According to the EF English Proficiency Index, Serbia ranks 24th globally for English proficiency, with over 86% of IT professionals demonstrating business-level English fluency.
The numbers tell a compelling story about specialization. Serbia’s Information and Communication Technology (ICT) and AI sectors employ over 120,000 professionals and contribute nearly 10% to the country’s GDP. But the talent pool extends far beyond coding. The country has built strong foundations in telecommunications (thanks to companies like Huawei and Ericsson establishing regional centers), advanced manufacturing, and multilingual customer support operations.
What makes Serbia particularly attractive for EU-based expansion is time zone alignment and regulatory familiarity. Your Belgrade-based developer starts their day just one hour ahead of Berlin or Vienna. They understand European business practices, data privacy requirements, and quality standards. This nearshore advantage explains why companies like Nordeus (creators of the Top Eleven football game) and RT-RK (embedded software specialists) have grown into global players from Serbian roots.
The regulatory environment adds another layer of appeal. Serbia maintains candidate status for EU membership, which means ongoing alignment with European standards and practices. The government offers tax incentives for IT companies and has streamlined business registration processes. For companies hiring international employees in Serbia, this translates into a stable, predictable framework that won’t shift dramatically with political changes.
Primary options for hiring in Serbia
You have two main paths forward when it comes to bringing Serbian talent onto your team. Both get you where you need to go, but the commitment level and setup requirements are vastly different.
Establishing a local entity
Setting up your own Serbian company gives you complete control but requires significant upfront investment. You will typically establish a limited liability company, or Serbian d.o.o. (Društvo sa Ograničenom Odgovornošću), which needs a registered local address, minimum capital deposit, and navigation through the Serbian Business Registers Agency. The registration process takes 5-15 business days, but you will also need to handle ongoing tax registration, social security setup, and corporate compliance requirements.
This route makes sense when you plan to hire multiple employees over the next few years. Companies looking at 10 or more Serbian hires often find the economics work in their favor compared to ongoing EOR fees. It is ideal for businesses establishing development centers or regional hubs where long-term presence justifies the administrative complexity.
Partnering with an Employer of Record (EOR)
An employer of record acts as the legal employer for your Serbian team members while you maintain day-to-day management control. You can hire your first employee within weeks rather than months, with no need to navigate Serbian bureaucracy or establish local banking relationships. A Serbian EOR can handle all compliance requirements, from payroll taxes to mandatory social contributions, while ensuring your employment practices meet Serbian labor law standards.
This approach works best for companies testing the Serbian market or hiring just a few key people. You avoid entity setup costs and ongoing corporate maintenance while getting immediate access to Serbian talent. The trade-off is higher per-employee costs compared to having your own entity, but the speed and simplicity often justify the premium.
Understanding Serbia’s nuances in employment contracts
Here’s where things get interesting. Serbian law requires every employment relationship to have a written contract. No handshake deals, no “we’ll figure it out as we go” arrangements. The government wants everything documented, and honestly, this protects both you and your employee.
According to Serbian employment law attorneys Aleksandra Jaćimović and Jelena Đukanović of Zunic Law, “if a contract includes terms that fall below the legal minimum (for example, reduced leave or shorter breaks), those provisions will be considered invalid.” It’s critical that employers take provisions in “aligning your contracts with the law—and knowing where you can offer flexibility— is key to staying compliant and building a positive workplace culture,” they add.
You have three main contract types to choose from:
- Indefinite contracts offer permanent employment with no end date specified.
- Fixed-term contracts last for a specific period, typically used for project work or temporary roles.
- Probationary contracts let you test the waters for up to six months before committing to permanent employment.
Every contractual employee agreement must include specific details that Serbian authorities consider non-negotiable. Job title, salary amount, working hours, workplace location, and termination procedures all need explicit mention. You also need to outline vacation entitlements, notice periods, and any special working conditions.
Here’s the catch that surprises many international employers: contracts must be written in Serbian. Even if your employee speaks perfect English and prefers working in English, the legal employment contract needs Serbian translation. This requirement exists to ensure employees fully understand their rights and obligations under local law.
What working hours, holidays, and leave look like
According to Serbia’s Employment Act, Serbian employees work a standard 40-hour week, and overtime compensation varies based on when extra work occurs. Employees working during non-working public holidays receive at least 110% of their base salary for that day.
Annual leave in Serbia provides employees with a minimum of 20 working days per year. Some collective agreements or company policies may grant additional days based on education level, working conditions, or other factors. Unlike many countries, Serbian annual leave calculations use working days rather than calendar days.
Serbia recognizes eight non-working public holidays that total 12 days annually. These include:
- New Year’s Day (2 days)
- Orthodox Christmas
- Serbian Statehood Day (2 days)
- Labor Day (2 days)
- Orthodox Easter period (4 days)
- Armistice Day
Orthodox Easter dates shift annually according to the Julian calendar, requiring attention to religious scheduling.
The country also observes five working holidays where employees may choose not to work for religious reasons, including Saint Sava Day and various remembrance days. Employees of different faiths receive accommodation for their respective religious holidays, including Eid celebrations for Muslim employees and Yom Kippur for Jewish employees.
Common employee benefits and social contributions
Serbian employers face significant social contribution obligations that add substantially to employment costs. These mandatory payments fund the country’s comprehensive social safety net and represent required expenses beyond employee salaries.
“These obligations include but are not limited to mandatory payments, such as salary, contributions to mandatory social insurance, and the provision of other statutory employee rights,” writes Jaćimović and Đukanović. “As businesses expand globally, the issue of employment-related costs becomes more complex, with more employers operating internationally,” they advise.
Social security contributions are split between employers and employees, with both parties contributing to different programs. For pension and disability insurance, employees contribute 14% while employers contribute 10% of gross salary. Health insurance requires equal contributions of 5.15% from both employers and employees. Unemployment insurance costs 0.75%, paid entirely by the employee. Combined employer contributions total approximately 15.15% of gross wages.
Beyond legal requirements, Serbian companies typically offer customary benefits that employees expect in competitive job offers. These often include meal allowances, transportation subsidies, and performance-based bonuses. Many employers also provide supplemental private health insurance to complement the national health system, offering faster access to specialists and enhanced medical facilities.
At the start of October 2025, Serbia’s minimum wage is set to increase by 13.7%, from RSD 53,592 per month (around US$533) to RSD 58,630 (US$583). Employers must ensure all salary payments meet this threshold while calculating additional compensation for overtime work, holiday pay, and other statutory requirements. Understanding both mandatory and customary benefit expectations helps companies attract and hire Serbian talent in competitive markets.
Managing employee vs. contractor classification
Serbian labor law clearly distinguishes between employees and independent contractors, and misclassifying them can create serious legal problems. Contractors maintain high control over their work methods and schedules, provide their own equipment and tools, and operate independently from the organization. They typically work remotely and handle specific projects rather than ongoing business operations.
Employees receive employer direction on work methods, use company-provided equipment, and integrate closely with organizational operations. They’re entitled to employment benefits like overtime pay, minimum wage protection, paid leave, and social insurance contributions from their employer. Contractors pay their own taxes and social contributions, while employers handle these obligations for employees.
Misclassifying employees as contractors exposes companies to penalties, back payments for unpaid benefits, and potential legal disputes. Serbian authorities can reclassify workers retroactively, requiring employers to pay outstanding social contributions, benefits, and penalties.
Termination and severance laws
Serbian employment termination follows strict procedural requirements that protect both employers and employees from arbitrary dismissal. Legal grounds for termination include poor performance, misconduct, redundancy, or mutual agreement. However, employers must follow specific steps, including written warnings for most performance-related issues and providing employees eight days to respond before making final termination decisions.
Notice periods depend entirely on the employee’s length of service with the company. Employees with up to five years receive two weeks’ notice, those with five to ten years get four weeks, and employees with over ten years of service receive eight weeks. These are minimum requirements, and employment contracts or collective agreements may specify longer periods.
Severance pay applies in cases of redundancy or unjust termination, calculated based on tenure and salary levels. Serbian labor law provides strong employee protections, including the right to challenge terminations through labor courts.
Serbian work permits and visas
Foreign nationals need both a Serbian work visa and a temporary residence permit to work legally in Serbia. The process begins with a Type D long-stay visa, which allows entry for up to 90 days to complete residence and work permit applications. Serbia plans to issue 100,000 work permits in 2025, reflecting growing demand for international talent across construction, healthcare, IT, agriculture, and services sectors.
Employers must demonstrate that no suitable Serbian candidates are available for the position and that they’re legally registered companies offering fair employment contracts. Foreign workers need valid passports, clean criminal records, and evidence of professional qualifications. The application process requires physical presence in Serbia, making remote processing impossible.
The Ministry of the Interior handles temporary residence permits while the National Employment Service issues work permits, both typically valid for one year and renewable. Processing involves multiple government agencies and can take several weeks to complete. Companies hiring multiple foreign nationals often benefit from working with local legal counsel or an employer of record to navigate the complex documentation requirements and ensure applications meet all regulatory standards.
Hiring in Serbia with Pebl
With a presence across 185+ countries, Pebl offers its global EOR services to simplify hiring in Serbia by taking care of compliant onboarding, localized payroll, and statutory filings. Pebl pairs technology with in-country experts who align contracts and benefits to Serbian labor law and remove the need to set up a local entity. With deep experience across Serbia and Eastern Europe, Pebl delivers local benefits benchmarking and rapid support so teams scale across the region with confidence. Consult an expert to learn more.
FAQs about hiring in Serbia
Hiring in Serbia raises smart questions, especially around entities, taxes, talent demand, and workplace norms that shape how teams work day to day. The answers below keep things practical and backed by current Serbian rules and credible market data.
Can I hire Serbian employees without a local entity?
Yes, you can hire employees in Serbia without establishing a legal entity by leveraging an employer of record, which becomes your legal employer. This model handles compliant onboarding, localized payroll, and benefits without opening a D.O.O. (a limited liability company) or registering for tax and social funds. It is the fastest way to add employees in Serbia while staying aligned with local labor laws and reporting rules.
What taxes do employers pay in Serbia?
Serbian employers pay social contributions totaling 15.15% of gross wages: 10% for pension and disability insurance, plus 5.15% for health insurance. You also withhold and remit employee income tax at 10% (after the monthly non-taxable amount of RSD 28,423), plus employee social contributions of 19.9% total.
All taxes and contributions must be paid by the 15th of the month following salary payment through the Tax Administration’s electronic portal. The employer acts as a withholding agent for all these obligations.
What jobs are in demand in Serbia?
Programming and software development roles consistently top the demand lists, with March 2025 data showing high volumes for programmers alongside construction trades and logistics positions. While remote tech roles like programmers are highest in demand, the National Employment Service reports steady hiring for warehouse staff, commercial drivers, carpenters, masons, and sewists.
Healthcare roles like nurses and select engineering positions are always in demand. Serbia’s growing IT sector continues driving demand for developers, engineers, and tech specialists across various specializations.
What is the work culture in Serbia?
Serbian workplaces tend to be hierarchical with deep respect for titles and senior decision makers, particularly in established companies. Relationships and trust development matter significantly, often built through consistent follow-through and face-to-face meetings that create long-term cooperation.
Communication is direct yet polite, with a formal address initially and a preference for clarity over indirect signals. Cultural research shows that Serbian professionals highly prefer hierarchical order and strongly dislike uncertainty. This means these individuals will do well with structured decision-making and an emphasis on established procedures.
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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