Guide
Entrepreneur personal salary (lična zarada)
We assess whether the personal salary pays off for you, file your election with the Tax Administration, and each month calculate and report the tax and contributions on time.
Personal salary (lična zarada) is an option for an entrepreneur who keeps business books to pay themselves a monthly salary, which is then taxed much like an employee's wage and recognised as an expense in the books. If you do not opt for a personal salary, the entire taxable profit is taxed and money you withdraw from the business is treated as personal income that is not a deductible cost. The right choice depends on the level of profit, your costs and how regularly you draw money from the business. The election is filed in advance with the Tax Administration and takes effect from the following year, and once filed it stays in force until you report that you are stopping the payment, so it matters to decide in good time.
What you should know
- Personal salary is available only to an entrepreneur who keeps business books (single or double-entry), not to a flat-rate trader; it is a cash amount the entrepreneur pays themselves each month as compensation for their work and which is booked as a business expense.
- Without opting for a personal salary, the entire taxable profit is taxed under the tax on income from self-employment at a 10% rate, and withdrawals from the business are not a deductible cost; with a personal salary, the paid personal salary is an expense, while the remaining profit is still taxed at the same rate.
- The election to pay a personal salary is filed with the Tax Administration electronically, via the ePorezi portal, no later than 15 December of the current year, taking effect from the following year; a newly founded entrepreneur may also elect at registration, within the prescribed deadline for the start of business.
- The notice is not filed every year: once elected, the personal salary stays in force continuously until the entrepreneur files a notice that the payment is ceasing, which is likewise filed by 15 December and takes effect from the following year; the election is not changed mid-year.
- The personal salary is taxed much like a wage: 10% tax is charged on the amount above the non-taxable portion (which for 2026 is 34,221 dinars per month), plus contributions for pension (PIO), health and unemployment, applying the prescribed minimum and maximum monthly contribution bases.
- A PPP-PD tax return is filed before each personal salary payment, and the tax and contributions are paid no later than the payment date; if a personal salary for a given month is not paid out, the contributions on the minimum base are settled at the latest by the last day of the current month for the previous month.
How we handle it
- 01 Analysis and cost-benefit check We compare your expected profit, costs and take-home income in both scenarios, with and without a personal salary, to determine which option is more favorable for you.
- 02 Filing the election If the personal salary pays off, we prepare and electronically file the election notice with the Tax Administration, mindful of the 15 December deadline, with effect from the following year.
- 03 Setting the salary amount Together we set the monthly personal salary amount, checking the non-taxable portion and the prescribed minimum and maximum contribution bases.
- 04 Monthly calculation and PPP-PD Each month we calculate the tax and contributions on the personal salary, prepare and electronically submit the PPP-PD return before payment, and obtain the filing identification number.
- 05 Orders and deadlines We prepare the payment orders for the personal salary, tax and contributions and track the deadlines, so obligations are settled no later than the payment date.
- 06 Bookkeeping and annual review We book the personal salary as an expense, reconcile it with the annual tax on income from self-employment, and recommend changing your election in good time when it becomes more favorable.
Company formation
We register your company with APR and handle all tax and banking obligations.
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