As of 1st January, the new minimum wage is 143 dinars per hour, which is a 13% hike compared to the one in 2017. Close to 350,000 workers in Serbia work for minimum wage, and, as of 2018, their salaries will be 2,202 dinars higher than last year, amounting to 24,882 dinars a month.
Even with this newest hike, minimum wage cannot cover the costs of the basic consumer basket which, in October last year, stood at 36,369 dinars, let alone the costs of the average consumer basket which stands at 69,943 dinars.
At the same time, thanks to the changes to the Income Tax Law, the untaxed segment of salaries has gone up from 11,700 dinars to 15,000 dinars. Also, new companies will be exempt from paying tax on basic salary. This pertains to small businesses and is applicable to up to nine employees in the company.
Another novelty is that, until 2019, the employers will still be eligible for receiving employment subsidies which entail between 65% and 75% income tax return depending on how many new jobs they create.
A member of the Social-Economic Council, Nebojsa Atanackovic says that the state authorities did keep their promise – on one hand, they have increased the burden on employers by hiking minimum wage, while on the other hand, they have also increased the untaxed segment of salaries which is helpful to employers.
“I believe that this will result in a drop in the number of unregistered workers, and in more revenue for the Pension and Disability Insurance Fund in terms of contributions. Employers can use the difference of 3,300 dinars (between 11,700 dinars and 15,000 dinars) per employee to increase their salaries or spend on new investments”, Atanackovic adds.
This post is also available in: Italiano