Employer of Record in Albania

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Albania if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Albania below, to avoid any compliance issues.

Employment Contract Requirements

Contracts in Albania must be written in Albanian or in a mutually understood language. An official translation and notarized copy are necessary if the original is not in Albanian. Contracts must include:

• Identity of the parties
• Place of work
• Job description
• Start date of employment
• Contract duration
• Paid leave entitlement
• Notice period for termination
• Salary and payment date
• Normal weekly working hours
• Probation period

Onboarding Process

We can help you get a new employee started in Albania quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Albania

Working hours are capped at eight hours per day and 40 hours per week in Albania. Employees must have a daily break of at least 11 consecutive hours, or within two consecutive days if necessary. Additionally, a weekly break of at least 36 hours is mandated, with 24 hours uninterrupted.

Overtime in Albania

Each hour worked beyond the daily eight-hour or weekly 40-hour limit is considered overtime in Albania. Overtime pay varies based on the day it occurs:

• On working days, overtime is compensated with a 25% surcharge.
• On rest days, the surcharge increases to 50%.
• Alternatively, compensatory time off may be provided.

Probation Period in Albania

In fixed-term contracts, a probationary period not exceeding three months should be stipulated in writing. For indefinite contracts, the initial three months constitute a probationary period, unless otherwise specified in a contract for the same work.

Global expansion shouldn't mean losing time to paperwork or dealing with complicated, country-specific HR systems. An Employer of Record helps you keep your focus on talent by handling the operational side of employment in Albania. That includes onboarding, contract management, payroll processing, and statutory compliance, all aligned with local laws and best practices. The EOR guarantees that employees are legally employed and properly supported from day one.

This streamlined setup allows you to prioritize recruiting the best people and integrating them into your company culture. Your team stays lean, and you avoid getting caught up in the details of local processes or shifting regulations. For founders, global hiring managers, or HR teams working across borders, an EOR multiplies your impact, reducing admin time, preventing errors, and helping ensure that new hires have a smooth experience from the get-go.

In Albania, employers are responsible for various payroll taxes, including income tax withholding, social security contributions, and local levies. Social security contributions consist of a 9.5% employee contribution and a 15.5% employer contribution. Income tax rates follow a progressive structure, with rates of 0%, 13%, and 23% based on income brackets. Employers must ensure timely submission of payroll taxes by the 20th of each month, covering both social security and income tax withholdings.

Additionally, Albania has a mandatory national minimum wage of ALL 40,000 (approximately €408) per month. Employers must also comply with regulations regarding health insurance contributions and local levies, which vary by municipality.

To stay compliant and streamline payroll management, employers can benefit from using payroll software which consolidates payroll data, automates tax calculations, and ensures adherence to Albania's complex regulations.

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Hiring in Albania means taking on local payroll obligations, which often include unique tax rates, contribution rules, and strict documentation. If you're not familiar with the system, or don't have a local entity, it’s easy to make mistakes. That’s where an Employer of Record ccomes in. The EOR manages payroll for your team on your behalf, ensuring every process is accurate, timely, and legally compliant.

Key Ways an EOR Supports Payroll in Albania:

• Full Legal Compliance: Ensures all payments, deductions, and filings meet country-specific requirements.
• Payroll Setup & Processing: Handles salary calculations, tax withholdings, and local reporting obligations.
• Statutory Benefit Contributions: Pays into required social programs and manages country-mandated benefits.
• Employee Documentation: Generates compliant contracts and manages hiring and termination paperwork.
• Local Currency Payouts: Delivers salaries in local currency, avoiding delays or exchange rate issues for employees.

In Albania, work permits and visas are essential for employers hiring foreign workers. The process involves submitting applications, paying fees, and meeting specific eligibility criteria. The key visa types include the Temporary Work Visa, Permanent Work Visa, Highly Skilled Worker Visa, and Business Visa. Employers must ensure compliance with local labor regulations when sponsoring foreign employees.

Mandatory Leave Entitlement in Albania

The annual leave entitlement in Albania is 22 working days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Albania

There are 15 public holidays that employees can take off work. Employees are entitled to compensation plus an additional leave day if they are required to work on a public holiday.

Paid Time Off in Albania

Employees are entitled to a minimum of 22 days of paid vacation per year (at full salary) adjusted for partial years of employment. Vacations are prefferably taken within the current year or by the end of the following year's first quarter but have a right to be carried over for 3 years in certain circumstances.

Maternity Leave In Albania

In Albania, pregnant employees and those who have recently given birth are entitled to specific protections and benefits:

Pregnant employees must cease work 35 days before the due date and 63 days after giving birth.

Maternity leave spans 365 days, or 390 days for multiple births.

Social insurance covers 80% of salary for the 35 days before birth and the first 150 days after birth, and 50% for the remainder of the leave.

After the 63-day post-birth period, employees returning to work are entitled to either 2 hours of paid leave during the workday or 2 hours of reduced working time with full pay.

Termination of employment during maternity leave is strictly prohibited under the Labor Code.

Paternity Leave In Albania

Fathers are entitled to 3 days of paid paternity leave, paid at 100% of salary by the employer.

Sick Leave In Albania

Employees are entitled to 14 days of sick leave for each case of sickness, during which sickness benefits are paid by the employer at 80% of the employee's salary. Periods exceeding 14 days are paid by social security at 70%.

Parental Leave In Albania

Parents with dependent children in Albania are entitled to 12 days of childcare, leave where the child is sick or needs indispensable care. This can be extended to 15 days if their children are below three years old. This leave can be further extended up to 30 days annually without pay.

Bereavement Leave

Employees in Albania are entitled to five days of paid leave in the event of the death of an immediate family member.

Marriage Leave

Intending couples in Albania can take five days of paid leave.

When hiring across multiple countries, maintaining consistency in how you deliver employee benefits quickly gets tricky. Each country, including Albania, has its own legal rules, cultural norms, and contribution systems. An Employer of Record helps you strike the right balance between global structure and local compliance. They take over the complexity of delivering benefits that are aligned with Albania’s legal requirements and competitive with local market expectations.

From ensuring statutory benefits are in place to managing local onboarding timelines and enrollment systems, the EOR provides a seamless experience for both employer and employee. This makes it easier to grow your team across borders without reinventing your benefits process in each new location. You stay in control of your overall benefits strategy, while the EOR takes care of executing it in a way that works legally and culturally in Albania. It’s a smarter way to scale benefits globally without losing local relevance.

Termination Process in Albania

In Albania, employment contracts can be terminated with or without cause under the Labor Code. Immediate termination is allowed for reasons such as gross misconduct, criminal behavior, serious contract breaches, or policy violations. The termination process includes:

1. Sending a written invitation for a meeting to the employee at least 72 hours in advance.
2. Discussing termination reasons during the meeting, allowing the employee to raise objections.
3. If termination proceeds, delivering a written termination notification to the employee no sooner than 48 hours after the meeting.

Notice Period in Albania

In Albania, the Labor Code mandates minimum notice periods for terminating indefinite term contracts, which vary based on the length of employment and cannot be shortened by agreement:

1. Up to 6 months: 2 weeks' notice
2. 6 months to 2 years: 1 month's notice
3. 2 to 5 years: 2 months' notice
4. More than 5 years: 3 months' notice

Severance in Albania

Severance pay in case of termination for reasons not attributable to the employee, such as redundancy or employer bankruptcy, is structured as follows:

1. Less than 1 year of service: No statutory requirement for severance.
2. More than 3 years of service: 0.5 months average salary for each year of service.

If an employee has received an annual bonus for 3 consecutive years, this bonus must be included in the severance as a mandatory seniority bonus.