Amendments were published in the Official Gazette of Montenegro no. 145/2021 and 146/2021 dated 31 December 2021.
An overview of the most significant amendments is provided below.
The Labor Law
Minimum net salary is increased from EUR 250 to EUR 450.
A new provision is introduced prescribing that employer is obliged to increase employees net salary for abolishment or decrease in personal income tax or social security contributions borne by employee.
Amendments apply on salary payments performed as of 1 January 2022.
The Personal Income Tax Law
Progressive taxation of salary and income earned by entrepreneurs is introduced. A proportional 15% tax is introduced to other types of income.
Salary is taxed in the following manner:
- Salaries up to EUR 700 (gross) are exempt from tax;
- Salaries ranging from EUR 700 up to EUR 1,000 inclusive (gross) are subject to 9% tax;
- Salaries exceeding EUR 1,000 (gross) are subject to 15% tax.
Amendments apply as of 1 January 2022.
The Law on Mandatory Social Insurance Contributions
Health insurance contribution borne by both employee and employer is abolished (10.8% in total).
A new rule is introduced for assessment and payment of social security contributions. Per new rule, social security contributions are calculated, withheld, and paid by the 15th of the current month for then previous month.
Amendments apply as of 1 January 2022.
Novelties in Personal Taxation and Labor Law in 2022
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The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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