Employer of Record in Albania

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.

Fiscal Year in Albania

1 January- 31 December is the 12-month accounting period that businesses in Albania use for financial and tax reporting purposes.

Payroll Cycle in Albania

The payroll cycle in Albania is usually monthly, with employees being paid by the last working day of each month..

Minimum Wage in Albania

The minimum wage for employees in Albania is typically 250 ALL per hour, amounting to ~40,000 ALL per month for a typical 40 hour work week.

Bonus Payments in Albania

In Albania, there is no mandatory provision for a 13th salary. Its provision depends on individual company policies or collective agreements.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 16.7% on top of the employee salary in Albania.

Employee Payroll Tax Contributions

In Albania , the typical estimation for employee payroll contributions cost is around 11.2%.

Individual Income Tax Contributions

Individual income tax ranges from 0% to 23%. Income tax is calculated according to progressive rates, detailed below.

Pension in Albania

In Albania, pensions are managed by the State Social Insurance Institute. Workers contribute to the pension fund during their careers and receive benefits upon retirement based on their contributions and other factors.

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 20 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 14 public holidays that employees can take off work.

Paid Time Off in Albania

Employees are entitled to a minimum of 20 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:

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.

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:

• Sending a written invitation for a meeting to the employee at least 72 hours in advance.
• Discussing termination reasons during the meeting, allowing the employee to raise objections.
• 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:

• Up to 6 months: 2 weeks' notice
• 6 months to 2 years: 1 month's notice
• 2 to 5 years: 2 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:

• Less than 1 year of service: No statutory requirement for severance.
• More than 1 year of service: 1 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.