Guide
Payroll in Serbia: gross, net, contributions and the PPP-PD return
Gross 1, gross 2 and net, the 10% tax, contributions and the PPP-PD return, with the full calculation worked through for 2026.
Payroll works in two steps: add the employee's tax and contributions to the net and you get gross 1, then add the employer's contributions to gross 1 and you get gross 2, the company's total cost. The same chain runs backwards, from an agreed gross down to the amount the employee receives. The rates, the non-taxable amount and the base limits below are the 2026 parameters, and the whole calculation is worked through on a net salary of 100,000 dinars. For your own figures, work out gross and net pay in the calculator. After the calculation comes the PPP-PD return, filed electronically no later than the day the salary is paid out.
What you should know
- A salary has three levels: net (what the worker receives), gross 1 (net plus the employee's tax and contributions) and gross 2 (the employer's total cost). Owners care most about gross 2, because that is the real cost of an employee.
- Salary carries a 10% tax and employee contributions of 19.90% (PIO 14%, health 5.15%, unemployment 0.75%), while the employer pays a further 15.15% on top (PIO 10%, health 5.15%). Combined, 24% goes to the pension fund and 10.3% to health, while the unemployment contribution is borne by the employee alone.
- The non-taxable amount of 34,221 dinars in 2026 reduces only the tax, not the contributions. Contributions are calculated on the full gross, so the common belief that the non-taxable part lowers them too is wrong.
- For a net salary of 100,000 dinars, gross 1 is 137,772 dinars, the tax is 10,355, employee contributions are 27,417 and employer contributions 20,872, which makes gross 2 158,644 dinars.
- Running it the other way, on a gross 1 of 100,000 dinars the tax is 6,578, employee contributions are 19,900, the net is 73,522 and gross 2 comes to 115,150 dinars.
- Contributions have a lowest and a highest base: 51,297 and 732,820 dinars for 2026. Below the lowest base they are still paid on 51,297, and above the highest they stop at 732,820. The minimum wage carries the tax and all contributions under the same rules.
- The PPP-PD return is filed and the tax and contributions paid no later than the salary payment date, and the employee must be registered for mandatory social insurance via CROSO before their first working day. Late filing brings default interest and penalties.
- The calculation in this guide is the standard one, without incentives. For certain groups of new employees there is a refund of part of the tax and contributions, which lowers the real cost of an employee.
| Item | How it is derived | Example: net 100,000 RSD |
|---|---|---|
| Net salary | The amount the employee receives in their account | 100,000 RSD |
| Wage tax | 10% on gross 1 reduced by the non-taxable 34,221 RSD | 10,355 RSD |
| Employee contributions | 19.90% of gross 1 (PIO 14%, health 5.15%, unemployment 0.75%) | 27,417 RSD |
| Gross 1 | Net plus the tax plus the employee's contributions | 137,772 RSD |
| Employer contributions | 15.15% of gross 1 (PIO 10%, health 5.15%) | 20,872 RSD |
| Gross 2 | Gross 1 plus the employer's contributions, the company's total cost | 158,644 RSD |
How we handle it
- 01 Data collection We collect from you each employee's salary data, hours, sick leave, absences, and any deductions.
- 02 Payroll calculation We compute net, gross 1 and gross 2 with all taxes and contributions, accounting for the non-taxable amount and the prescribed minimum and maximum bases.
- 03 PPP-PD filing We prepare the PPP-PD return for every employee covered by the payment, submit it electronically to the Tax Administration via the ePorezi portal no later than the payment date, and obtain the approved filing identification number (BOP).
- 04 Payment orders We prepare transfer orders for net salaries, taxes, contributions, and any administrative garnishments, deductions, or loans.
- 05 Records and filings We keep records, issue payslips to employees, and manage registrations and deregistrations for mandatory social insurance through CROSO.
Frequently asked questions
How much does an employee on a net salary of 100,000 dinars cost the employer?
The total cost, that is gross 2, is 158,644 dinars a month. Gross 1 is 137,772 dinars, which includes 10,355 of tax and 27,417 of employee contributions, and on top of gross 1 the employer pays 20,872 dinars in contributions. For other amounts, work out gross and net pay in the calculator.
What is the non-taxable part of salary in 2026?
The 10% wage tax is not charged on the whole salary, but only on the part above 34,221 dinars per month. This non-taxable amount applies to the tax only, not to contributions, and is in force for all of 2026.
What tax and contribution rates apply to salaries in 2026?
Wage tax is a flat 10%. The employee also pays contributions of 19.90% (PIO 14%, health 5.15%, unemployment 0.75%), and the employer pays an additional 15.15% on top (PIO 10%, health 5.15%).
What are the lowest and highest contribution bases for 2026?
Contributions for 2026 are calculated within a range: the lowest monthly base is 51,297 dinars and the highest is 732,820 dinars. If a salary is below the lowest base, contributions are still paid on 51,297 dinars; above the highest base, they are capped at 732,820 dinars.
How much is the minimum wage in 2026?
The minimum wage for 2026 is 371 dinars net per working hour. Because the number of working hours differs each month, the monthly net minimum ranges roughly from about 59,360 to 68,264 dinars, averaging around 64,554 dinars. Minimum-wage employees still pay the 10% tax and all contributions.
By when do I have to file PPP-PD and pay salary taxes?
The PPP-PD return must be filed and the tax and contributions paid no later than the day the salary is paid out. The employee must be registered for mandatory social insurance through CROSO before starting work. Late filing or payment brings default interest and penalties.
What does filing PPP-PD look like in practice?
Each salary payment gets its own PPP-PD return, showing per employee the income type, the gross amount, the tax and the contributions. The return is submitted electronically to the Tax Administration via the ePorezi portal, and the confirmation is the approved filing identification number (BOP). The deadline is the payment date, when the tax and contributions are also paid, so in practice the return is prepared before the money moves to the employees.
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