As many companies become remote-first, employers are increasingly hiring international employees. Often, this is because countries like Montenegro offer highly skilled talent at lower costs compared to their regional counterparts, as well as the United States, and Canada.
Salaries are essential when budgeting for hires in Montenegro, but there are numerous other costs to consider. From overtime and severance to social security contributions, hiring overseas employees requires more than calculating your new employee’s wage.
Employers should also keep supplementary benefits like coworking passes or gym memberships in mind. This can help with employee retention and satisfaction.
Overall, it can be challenging to determine total costs on your own. This article will guide you through the costs of hiring employees in Montenegro.
Mandatory Costs
When hiring employees in Montenegro, you’ll need to consider numerous mandatory costs. These include wages, taxes, benefits, overtime pay, and severance pay. Adherence to these costs will ensure you are compliant with local labor laws and regulations.
Salary
While the minimum wage in Montenegro is €532 (USD 570) per month, employers should consider offering higher salaries to gain a competitive edge.
For instance, the average salary in Montenegro is €1181 (USD 1265) per month. However, tech workers make around €1800 (USD 1928) per month. If you’re looking to hire a software engineer or IT manager, you can expect to pay above €2000 — approximately USD 2143 — per month. Meanwhile, the average salaries for customer support and administration range from €550 (USD 589) to €600 (USD 643) per month.
Salaries in Montenegro are still lower than many other European countries, as well as Canada and the United States. Montenegro’s cost of living index ranks 85th in the world, with an overall score of 38.9. This puts it far below fellow Balkan countries and most of the EU. As such, hiring employees from Montenegro provides employers with the opportunity to acquire top talent while minimizing costs.
Taxes and Benefits
When hiring employees from Montenegro, it’s essential to be aware of the mandatory taxes and contributions. Employers are required to pay 8.5% of an employee’s salary, which goes towards pension, disability, and unemployment insurance.
Paid Leave
Employees in Montenegro are entitled to take numerous types of paid leave. For annual paid time off, they get 21 days, which are fully paid by the employer. Montenegro also has nine public holidays in which employees are not required to work.
Employers need to consider the cost of parental leave when hiring in Montenegro. New mothers are entitled to 98 days of fully paid maternity leave. New fathers are entitled to ten days of fully paid paternity leave. These are both paid by the employer.
Adoption leave is available. If an employee adopts a child under eight years old, they’re entitled to take up to a year off. They receive a reduced salary which is paid by the employer.
Regarding sick leave, employers need to be aware of additional costs they may face. Employees are entitled to take 60 days of sick leave at 70% of their salary. However, this cost is completely covered by social security. In this case, employers do not need to worry about this as an extra cost when hiring in Montenegro.
Overtime Pay
The standard work week in Montenegro is eight hours per day for five days a week. If an employee works overtime, they are to be paid a minimum of 140% of their regular hourly wage. An employee cannot exceed ten hours of overtime work per week. So, when you hire an employee from Montenegro, keep in mind that your employee working overtime may be costly.
Severance Pay
Severance pay in Montenegro is outlined in the employment contract. It’s given to employees who have worked for an employer for longer than 18 months. Severance in Montenegro should not be less than three times the average monthly wage.
Supplemental Costs of Hiring in Montenegro
In addition to statutory benefits, employers may also provide supplemental benefits. Offering additional benefits can help attract top talent, motivate staff, and increase retention.
Benefits
Making sure your new employees are happy and healthy is vital. You can support their health by offering a strong benefits package. While many employers choose to offer private health insurance for their employees, doing so comes at an extra cost.
The price will significantly vary depending on the type of private health insurance and coverage. While there is a national health system in Montenegro, Pacific Prime is a common private health insurance provider in the country.
An EOR like Borderless will typically offer localized benefits packages. This will usually include medical, dental, vision, and life insurance along with a retirement savings plan.
Bonuses and Extras
Montenegro doesn’t have any mandatory bonuses, such as the 13th-month bonus that’s common in many other countries. That being said, performance-based bonuses and signing bonuses are typically offered. Additionally, employers may want to consider offering employees a lunch or coffee stipend.
Employers also need to take workspace costs into account when hiring employees in Montenegro. Since new hires will typically be working remotely, they’ll need to set up a home office or access a coworking space.
Providing a home office stipend can be hugely beneficial. It can go towards a company laptop, ergonomic office chairs, or keeping your systems secure, like antivirus software.
Coworking offices have become the go-to for many employers. Not only do coworking spaces provide employees with a designated space to work, but they also encourage collaboration and networking. The costs of coworking spaces in Montenegro vary by region.
For example, Nest Coworking in Podgorica starts at €150 (USD 160) per month. In Budva, a bustling coastal town, Hubrela Coworking also has memberships that start at €150 per month. Tivat’s Shipyard Coworking is on the pricier end at €230 (USD 246) per month. However, in Herceg Novi, a small local town on the outskirts of the Bay of Kotor, Impact Coworking passes start at only €100 (USD 107) per month.
Work With Borderless
Hiring employees in Montenegro may feel overwhelming, especially with so many different costs to consider. Working with an Employer of Record (EOR) can help take the stress out of global hiring and budgeting.
An EOR like Borderless will do the heavy lifting, guaranteeing that you compliantly hire and pay employees in Montenegro. To get started, book a demo today.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
