Employer of Record in Kosovo

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 Kosovo 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 Kosovo below, to avoid any compliance issues.

Employment Contract Requirements

When considering employing in Kosovo, it is crucial to be well-versed in the formalities that govern the hiring process in the territory. Employment contracts hold significant weight, and a key aspect is that they must be documented in writing, with both the employer and the employee signing the agreement. Employment agreements must include, at a minimum, the following information:

• Comprehensive job description
• Basic salary information
• Date of commencement of employment
• Workplace details

Onboarding Process

We can help you get a new employee started in Kosovo 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 Kosovo

The standard work week is set at 40 hours, distributed evenly across five days which equates to eight hours per day.

Overtime in Kosovo

Beyond the standard 40-hour work week, overtime pay is mandatory, but it cannot be included in the regular salary. Employees are limited to a maximum of 8 overtime hours per week. The payment for overtime varies 120% of the hourly rate for day shifts, 130% for night shifts, and 150% for work on national holidays and weekends.

Probation Period in Kosovo

The probationary period for employees in Kosovo is subject to a maximum duration of six months.

Hiring in Kosovo means navigating local labor laws, mandatory employee benefits, payroll taxes, and strict employment regulations. These requirements aren’t always intuitive, especially if your team lacks in-country legal or HR expertise. An Employer of Record steps in as the legal employer for your hires, managing all compliance-related responsibilities. This includes issuing locally compliant contracts, registering employees with relevant authorities, processing payroll, and handling social security contributions and taxes in line with national laws.

By handing over these complexities to an EOR, your business avoids costly compliance errors and the time required to master local employment standards. You can focus on growing your team and operations while trusting that the legal and administrative foundation is solid. Whether you're making one strategic hire or building out an entire team, the EOR keeps you compliant, removes guesswork, and reduces the risk of legal or financial penalties, without requiring you to open a legal entity or maintain a local HR team.

Fiscal Year in Kosovo

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

Payroll Cycle in Kosovo

The payroll cycle in Kosovo is usually monthly, with employees being paid on or before the last day of the month.

Minimum Wage in Kosovo

As of October 1, 2024, Kosovo's national minimum wage is set at €350 gross per month for full-time employment, equating to €2 per hour for standard working hours. This marks a significant increase from the previous minimum wage of €130 per month for employees under 35 and €170 for those over 35, which had remained unchanged since 2011.

The minimum wage increase is expected to impact approximately 117,000 employees, primarily in sectors such as financial services, hospitality, and construction. However, concerns have been raised about the potential for increased informality in the labor market, as some businesses may struggle to comply with the new wage requirements.

Bonus Payments in Kosovo

There is no legal requirement to provide a 13th-month salary or any other form of annual bonus to employees

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 5% on top of the employee salary in Kosovo.

Employee Payroll Tax Contributions

In Kosovo , the typical estimation for employee payroll contributions cost is around 5%.

Individual Income Tax Contributions

Income tax in Kosovo is for individuals and business entities, who are considered taxpayers. The tax rates are progressive, ranging from 0% to 10%, applied to the total income as follows:

Pension in Kosovo

Pensions begin at age 65, and the amount you receive depends on two things. It's based on the contributions you've made to your personal savings account. The more you contribute, the higher your potential pension. Since January 2016, the level of education you've attained also plays a role in determining your pension, with benefits categorized into four tiers according to education level.

Running payroll in Kosovo is complex, especially when you're hiring without a local entity. Local laws determine everything from tax withholdings and reporting deadlines to benefit contributions and currency requirements. Missteps can lead to fines, payment delays, or unhappy employees. An Employer of Record takes this burden off your plate by handling the full payroll process. Acting as the legal employer, the EOR ensures you remain compliant with all payroll-related obligations, while still allowing you to manage your team’s day-to-day work and performance.

Key Ways an EOR Supports Payroll in Kosovo:

• Compliance Assurance: Ensures payroll aligns with local tax laws, labor regulations, and statutory deadlines.
• Payroll Processing & Tax Management: Calculates salaries, applies correct tax withholdings, and submits required reports.
• Benefits & Social Security Contributions: Manages employer obligations for pensions, health insurance, and other legal entitlements.
• Contract Generation & HR Administration: Drafts compliant employment contracts and supports onboarding, terminations, and HR tasks.
• Currency Payments: Issues timely salary payments in local currency, ensuring employees are paid accurately and on time.

In Kosovo, employers seeking to hire international talent must understand the diverse work permit and visa options available, such as the Work Visa and Temporary Residence Permit. Each category has distinct requirements, processing times, and associated fees.

The Kosovo work visa fee structure includes short-term visas (Type C, up to 90 days) for €40, long-term visas (Type D, 91 days to 1 year) for €80, and multiple-entry visas (up to 5 years) for €100. Processing times for Kosovo work permits typically range from 2 to 8 weeks, depending on the type of permit and the completeness of the application.

Employers should prepare for potential challenges, including bureaucratic procedures and compliance with local labor laws, to ensure a seamless hiring process and successful integration of foreign employees into the Kosovar workforce.

Mandatory Leave Entitlement in Kosovo

The annual leave entitlement in Kosovo is 4 weeks 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 Kosovo

In Kosovo, the following are considered public holidays:

Paid Time Off in Kosovo

Both full-time and part-time employees enjoy the right to annual leave, which is mandated to be at least four weeks. The extension of annual leave beyond this baseline is determined by an employee's work experience. Specifically, for every five years of service, an additional day is added to the annual leave entitlement.

Maternity Leave In Kosovo

Female employees can take up to 12 months of maternity leave, with the option to start 45 days before childbirth. For the first 6 months, the employer pays 70% of the basic salary, and the government covers 50% of the national average salary for the next 3 months. After 9 months, an additional 3 months of unpaid leave is possible. When back at work, new mothers can reduce daily working hours by 1 or 2 to breastfeed. These rules aim to support mothers during and after childbirth, ensuring a balanced approach to work and family life.

Paternity Leave In Kosovo

Fathers are granted three days of paid leave during the birth or adoption of their child, and an additional two weeks of unpaid leave, which can be taken at any time before the child turns three. Employees are required to inform their employer at least 10 days in advance when intending to take this leave.

Sick Leave In Kosovo

Employees are entitled to 20 working days per year of sick leave, and during this period, the employer is responsible for providing paid sick leave. Employees will receive 100% of their average salary for the duration of the sick leave.

Parental Leave In Kosovo

Employees who've worked for the same employer for six months can take four months of parental leave. Both parents can decide how to split the time, and it can be taken at the same time. Social Security pays 50-70% of the salary during this period, depending on the employee's monthly salary. The leave cannot be extended beyond four months.

Marriage Leave

5 days of paid leave

Death Of Close Family Member Leave

5 days of paid leave

Administering employee benefits in Kosovo requires more than just offering a standard package. Local labor laws often mandate specific entitlements, from health insurance to paid leave, and the rules can change without warning. Kosovo also has unique standards for what an attractive, competitive benefits package looks like. For businesses without in-country expertise, meeting these obligations and expectations can quickly become risky and expensive. An Employer of Record acts as your compliance partner, ensuring all benefits are provided according to the latest legal requirements and without administrative strain on your internal team.

Beyond compliance, an EOR brings clarity and consistency to a process that’s often complex and fragmented. They handle enrollments, ensure accurate employer contributions, manage communications with local providers, and keep everything properly documented. This means employees get what they’re entitled to, and you avoid the headache of navigating benefits systems in a foreign market. Whether you're hiring one person or building a larger team, an EOR provides a clear, dependable structure that lets you offer competitive benefits without taking on unnecessary risk or workload.

Termination Process in Kosovo

The employer holds the right to terminate an employment contract in Kosovo under various circumstances, including:

• Serious Misconduct
• Unsatisfactory Work Performance
• Inability to Perform the Job
• Justified Reasons

Notice Period in Kosovo

The notice period for employee termination in Kosovo varies based on the length of service and the type of employment:

• Fixed-term Employment: The notice period for fixed-term employment is 30 days.
• Indefinite Employment: 30 days notice is required for employees with 6 months to 2 years of service.
• 45 days notice is applicable for employees with 2 to 10 years of service.
• Employees with over 10 years of service are entitled to a 60-day notice period.

Severance in Kosovo

In the case of individual dismissals in Kosovo, there is no provision for severance pay. However, in the event of a collective dismissal, the employer is obligated to provide severance payments to employees with indefinite contracts. The amount of severance pay varies based on the employee's period of employment with the company:

• Between two (2) and four (4) years of service, the severance pay is one (1) month's salary.
• For employees with five (5) to nine (9) years of service, the severance pay is two (2) months' salary.
• Those with ten (10) to nineteen (19) years of service are entitled to three (3) months' salary.
• Employees with twenty (20) to twenty-nine (29) years of service receive six (6) months' salary.
• For thirty (30) years of service or more, the severance pay is seven (7) months' salary.