Global payroll in Albania

Employing staff in Albania requires compliance with local payroll, income tax and social insurance regulations. Employers must register employees with the Albanian tax authorities, calculate statutory contributions, withhold personal income tax and meet monthly reporting and payment deadlines.

For international companies hiring in Albania without establishing a local subsidiary, Acumen International provides payroll administration as part of its Global Employer of Record (EOR) services. We manage local employment arrangements, payroll calculations, statutory deductions and payments, while the client company retains day-to-day management of its employees.

Our services cover local professionals, senior executives and foreign specialists, including employment arrangements requiring immigration support.

How Employer of Record payroll works in Albania

Under an EOR arrangement, the local employing entity enters into the employment contract and administers the associated statutory payroll obligations. The client company directs the employee’s work, sets business objectives and manages their operational responsibilities.

Acumen International coordinates:

• Employment contracts and employee registration with the Albanian authorities.
• Monthly gross-to-net salary calculations and salary payments.
• Personal income tax withholding and reporting.
• Employer and employee social and health insurance contributions.
• Monthly payroll declarations and statutory payments.
• Administration of contractual benefits, allowances and salary adjustments.
• Final payroll calculations, including outstanding employment entitlements and applicable termination payments.

The proposed employment structure is assessed before onboarding, taking account of the Albanian Labour Code and the applicable requirements for third-party employment arrangements.

Acumen International provides payroll administration in Albania as part of its EOR service, rather than as a standalone payroll outsourcing solution.

Payroll taxes and employer contributions in Albania: 2026

Minimum wage and statutory contribution thresholds

From 1 January 2026, Albania’s statutory minimum monthly wage increased to ALL 50,000, under Council of Ministers Decision No. 776 of 19 December 2025.

The maximum monthly earnings base for social insurance contributions also increased to ALL 186,416.

The distinction between social and health insurance is particularly important for higher-paid employees.

Social insurance contributions are calculated on earnings up to the statutory monthly ceiling of ALL 186,416. Health insurance contributions apply to the relevant gross salary without the same upper limit.

Employer and employee social insurance contributions

The standard contribution rates for employees working more than 87 hours per month are:

Employer contributions are payable in addition to gross salary, while employee contributions are deducted through payroll.

The combined 16.7% employer rate is not a flat charge on the entire salary for higher-paid employees. The 15% social insurance component is subject to the statutory earnings ceiling, whereas the 1.7% health insurance component continues to apply above that ceiling.

Different social insurance rates may apply to certain part-time and short-duration employment arrangements.

Personal income tax on employment income

Albania applies progressive personal income tax rates under Law No. 29/2023 on Income Tax.

The statutory annual rates are:

Employers calculate and withhold income tax monthly, applying the relevant personal deductions where the employee is eligible.

For employees entitled to the standard monthly personal deduction, the withholding schedule is:

The applicable monthly personal deductions are:

• ALL 50,000 for gross monthly income up to ALL 50,000.
• ALL 35,000 for gross monthly income between ALL 50,001 and ALL 60,000.
• ALL 30,000 for gross monthly income above ALL 60,000.

The personal deduction generally applies through the employer with whom the employee has submitted the required personal status declaration. Where an employee has multiple employers, the deduction cannot be applied independently by each employer.

Payroll calculations must therefore account for the employee’s circumstances, declared employment relationships and any other applicable deductions.

Total employer payroll costs

When budgeting for an employee in Albania, international companies should distinguish between gross salary, statutory employer contributions and other contractual employment costs.

The principal components are:

• Gross salary: the employee’s contractual remuneration before statutory deductions.
• Employer social insurance: 15% of the applicable contribution base, subject to the monthly ceiling.
• Employer health insurance: 1.7% of the applicable gross salary, without the social insurance ceiling.
• Employee deductions: personal income tax and employee social and health insurance contributions withheld through payroll.
• Additional employment costs: contractual benefits, allowances, paid leave and any applicable termination entitlements.

Acumen International assesses these components when preparing employment cost calculations and EOR quotations for proposed hires in Albania.

Payroll registration, reporting and payment obligations

Employers in Albania must register employees with the tax administration before employment begins and maintain the records required for statutory payroll reporting.

For standard monthly payroll arrangements, employers must calculate, declare and pay withheld income tax and social and health insurance contributions.

Monthly payroll declarations and associated statutory payments are generally due by the 20th day of the following month.

Acumen International manages the payroll administration cycle for employees engaged through its EOR service, including:

1. Employee registration and payroll record setup.
2. Monthly salary and statutory deduction calculations.
3. Preparation and submission of payroll declarations.
4. Payment of withheld taxes and employer and employee contributions.
5. Employee salary payments and payroll documentation.
6. Adjustments arising from salary changes, bonuses, benefits, absences or termination.

Accurate payroll records are particularly important where employee remuneration varies, multiple income components apply or statutory contribution thresholds change.

Salary payments, allowances and employee benefits

Albanian payroll obligations extend beyond basic salary. Employers must assess the tax and social insurance treatment of additional remuneration and benefits, including bonuses, allowances, reimbursements and benefits in kind.

The applicable treatment depends on the nature of the payment and the exemptions provided under Albanian legislation.

For example, qualifying business travel reimbursements and certain employer-provided benefits may receive different treatment from additional cash remuneration.

Employers should establish the payroll treatment of proposed benefits before agreeing an employment package, particularly when applying international compensation policies to employees based in Albania.

Acumen International supports the administration of salary structures, contractual benefits and allowances as part of its local employment and payroll services.

Employment law requirements affecting payroll

Payroll administration must reflect employees’ statutory and contractual entitlements under the Albanian Labour Code (Kodi i Punës).

Working hours and overtime

The standard working week in Albania is 40 hours.

Overtime must be recorded and compensated in accordance with the Labour Code, including applicable restrictions on working hours and requirements for premium payments or compensatory time off.

Employment contracts and payroll records should accurately reflect the agreed working arrangements and any additional hours worked.

Paid annual leave

Employees are entitled to at least 22 working days of paid annual leave, following the amendments to the Albanian Labour Code in 2024.

Leave entitlements must be reflected in employment records and payroll calculations, including any outstanding payments due when employment ends.

Sick leave and statutory benefits

Sick leave payments involve obligations under both employment legislation and Albania’s social insurance system.

The employer is generally responsible for the initial period of qualifying sick leave, with subsequent benefits administered through the statutory social insurance arrangements.

Payroll administration must also account for maternity-related benefits and other protected absences where applicable.

Termination payments

Final payroll calculations may include outstanding salary, accrued but unused annual leave, applicable notice payments and statutory compensation.

Albanian labour law also provides for seniority-related compensation in qualifying termination circumstances.

These obligations are particularly relevant when budgeting for project-based employment, restructuring or the termination of an international employment engagement.

Payroll considerations for foreign employees in Albania

Employing foreign nationals in Albania may involve additional immigration, tax residence and social insurance requirements.

The applicable arrangements depend on the employee’s nationality, immigration status, employment circumstances and intended duration of work.

International employers should assess:

• Whether the employee requires a residence and employment authorisation under Law No. 79/2021 on Foreigners, as amended.
• The identification and registration requirements for local payroll.
• Whether Albanian social insurance contributions apply or an international social security agreement affects coverage.
• The employee’s tax residence and the taxation of employment income earned in Albania.
• The treatment of international assignment allowances and other benefits.

Acumen International coordinates employment, payroll and immigration requirements for foreign specialists engaged through its Global EOR services.

For further information, see our guide to work permits and employment authorisation in Albania.

Payroll compliance risks for international employers

Several aspects of Albanian payroll require particular attention when employing personnel through a local entity or third-party employment arrangement.

1. Incorrect contribution calculations. The statutory minimum contribution base and maximum social insurance ceiling must be applied correctly. Health insurance contributions are not subject to the same upper ceiling.

2. Income tax withholding. Payroll calculations must reflect progressive tax rates, applicable personal deductions and the employee’s declared employment relationships. Incorrect withholding can result in additional tax liabilities and penalties.

3. Salary and benefit classification. Bonuses, allowances, reimbursements and benefits in kind may receive different tax treatment. Incorrect classification can affect income tax and statutory insurance contributions.

4. Worker misclassification. Independent contractor arrangements must reflect the actual working relationship. Where the arrangement has the characteristics of employment, the company may face liabilities relating to unpaid employment entitlements, income tax and social insurance contributions.

5. Termination payments. Final salary, outstanding leave, notice requirements and statutory compensation must be calculated in accordance with the employment contract and Albanian labour law.

6. Allocation of employer liability. Under Articles 18/1–18/5 of the Albanian Labour Code, temporary agency employment arrangements involve statutory responsibilities for both the employing agency and the host enterprise. These include employment administration, workplace conditions, health and safety and equal treatment. Where these provisions apply, the employment arrangement must clearly define the responsibilities of each party.

Acumen International’s Employer of Record and payroll services in Albania

With over 25 years of international employment experience across 190+ countries, Acumen International combines local employment expertise with centralised account management and a single point of contact for each client.

How we work

1. Assessment and employment structuring. We review the proposed role, employment arrangements, contractual requirements, payroll costs and immigration eligibility, taking account of Albanian employment and tax legislation.
2. Employment setup and onboarding. We manage employment contracts, statutory registrations, payroll setup, income tax withholding and social and health insurance contributions, alongside work and residence authorisation where required.
3. Ongoing employment management. A dedicated account manager oversees monthly payroll, statutory benefits, employee enquiries, contract amendments, ongoing compliance and termination procedures.

For companies employing personnel in Albania and other international markets, Acumen International provides consistent service delivery while addressing the specific legal, tax and regulatory requirements of each jurisdiction.

Related Albania employment guides

For further information about hiring and managing employees in Albania, explore our country-specific guides:

• Employer of Record services in Albania
• Work permits for foreign employees in Albania
• HR compliance and employment law in Albania
• Contractor versus employee classification in Albania

Discuss your payroll and employment requirements in Albania

Acumen International supports international companies employing local professionals, senior executives and foreign specialists in Albania without establishing a local subsidiary.

Contact our team to discuss your proposed hires and receive a tailored EOR proposal, covering statutory employer costs, payroll administration, employment requirements and onboarding arrangements.

Sources

• Albanian General Directorate of Taxation — 2026 minimum wage and contribution thresholds.
• Council of Ministers Decision No. 776 of 19 December 2025.
• Law No. 29/2023 on Income Tax, as amended.
• Law No. 7703/1993 on Social Insurance, as amended.
• Law No. 10383/2011 on Compulsory Health Insurance, as amended.
• Albanian Labour Code, Law No. 7961/1995, as amended.
• PwC Worldwide Tax Summaries — Albania, individual income tax and social insurance contributions.