Short answer
Business decisions are measured by numbers before they're made. Hiring, investment, credit, and the new price each have a quick calculation that shows whether the move covers its own cost.
Verified on from Andi Haxhillari, Certified Accountant. Compared with Articles 56 and 59 of Law No. 29/2023, Decree No. 776/2025, and Law No. 9136/2003.
Business decisions, such as hiring, investing, lending, or pricing a new product, are measured by numbers before they're made, not after. Each has a quick calculation you turn into a figure. When that figure is missing, the decision relies on gut feeling.
Is this move worth it—a job, an investment, a loan, a new price? Daniel Kahneman showed that we decide quickly and then justify it with numbers. Overestimation and planning error are human, so numbers aren't the enemy of your intuition; they're its protection. Keith Cunningham, in The Road Less Stupid, puts it bluntly: wealth is built by avoiding bad decisions, and his tool is thinking time with written questions. At this level, every major decision is viewed with numbers up front: employment, investment, credit, a new price, exiting the business.
This page provides an account of each of the most common decisions, with examples in lek and the tax rules that apply. For each decision, there is a more detailed subpage linked within the text.
Read also: How to hire your first employee, from the contract to the first paycheck.
| The question | Answer in effect today |
|---|---|
| Full cost of the employee | Gross salary plus 16.71% employer contributions, 15% social security, and 1.71% health insurance. |
| Minimum wage 2026 | 50,000 lekë per month, Government Decree No. 776/2025 |
| Employee Contract and Declaration | Written contract before the start of work, Article 21 of the Labor Code. Notification at least one day in advance, Law No. 9136/2003. |
| How to evaluate an investment | Annual return and monthly return time |
| Dividend Tax | 81 TP3T on the distributed amount, Article 59 of Law No. 29/2023 |
| Declared but unpaid dividend | Tax is payable by the end of the third month following the month of the decision, Article 56, paragraph 2. |
You can afford it when the employee brings at least twice his total cost to the business. Total cost starts with gross pay, not the net pay you hand him, and includes the contributions you pay as the employer.
With a gross salary of 80,000 lek, the employer's contributions are 16.71%, so 13,360 lek, and the monthly cost becomes 93,360 lek. Over the course of a year this amounts to about 1,120,000 lek, so the employee must deliver or generate roughly 2,240,000 lek in work per year. You can find the full calculation, along with the time it takes for the employee to become productive, on the page. Can I afford a new employee?.
When you answer yes, the procedure follows its own sequence. The written contract is entered into before work begins, and the employee must give at least one day's notice. You can find the elements the contract must include on the page of Mandatory elements of the contract.
You know it with two questions: how much money it returns per year and in how many months it pays back the invested amount. A device that costs 500,000 lek and brings in 300,000 lek per year has an annual return of 60% and pays back the money in 20 months.
If the payback period is longer than the device's lifespan, or the return is lower than the cost of the money you're using, the investment isn't worth it in this form. You can find the step-by-step calculation on the page of return on investment.
Credit is worthwhile when what you buy with it yields more than the cost of the credit. It becomes harmful when used to cover ongoing losses, because the installment is added to the loss.
Before you sign, set the monthly installment in your cash flow forecast and see if it's sustainable even in slow months. You can find the full comparison on the website. Business credit, yes or no, while the money table on the page of liquidity planning.
There are two calculations before the product hits the market. The first is the contribution margin: how much remains per unit after subtracting its direct costs. The second is the break-even point for the new line alone: how many units must be sold for it to cover its additional costs.
A product with a price of 2,000 lek and a direct cost of 1,200 lek has an 800-lek contribution margin per unit. If the new line incurs an additional 240,000-lek cost per month, 300 units per month are needed just to cover it. How do you adjust the price when this figure turns out to be high, as explained on the page? the price of the new product.
As much of the profit as remains after paying obligations, and as much as doesn't leave the business without funds for the coming months. For an LLC, the regular route is the dividend, which is taxed at 8% on the distributed amount.
The distribution is determined by the shareholders' assembly. When a dividend is declared but not paid, tax is nevertheless due by the end of the third month following the month of the decision, in accordance with Article 56(2) of Law No. 29/2023. To see how you maintain both the profit and the cash on account, see the page. How much can I withdraw from the business?.
Measure the economic denominator—profit divided by the unit that makes the most sense for your business. For an office it might be profit per employee, for a store profit per square meter. When you track it every year, it shows whether the business is getting better or just bigger. How you find your denominator is explained on the page of economic denominators.
A workshop is considering buying a machine priced at 1,200,000 lek that generates an additional 600,000 lek in profit per year. The annual return is 50.1% and the money is recouped in 24 months, so the investment is worthwhile on its own.
The machine is purchased on a three-year loan with an illustrative annual interest rate of 7.1%. The monthly installment is about 37,000 lek, while the machine generates an average of 50,000 lek per month. This leaves a difference of about 13,000 lek per month in favor of the business.
The final question is about the weak months. If in winter the machine brings in only 25,000 lekë per month, the installment for those months is paid in cash from the rest of the business. Therefore, the installment is included in the cash flow forecast before the loan is signed, not after.
Every time there is a tax or financial change that affects your business, we notify you directly by email with a practical explanation.
Send me free notificationsWith a minimum wage of 50,000 lek gross, the employer also pays 16.71% in contributions, i.e., 8,350 lek. The monthly cost is 58,350 lek, about 700,200 lek per year.
Divide the cost of the investment by the profit or savings it generates per month. A 500,000-lek investment that yields 25,000 lek per month pays back in 20 months.
When credit covers ongoing losses or expenses that don't generate any revenue. In these cases, the installment only adds to the loss.
At a rate of 81% on the distributed amount, in accordance with Article 59 of Law No. 29/2023. The company withholds the tax at source when paying the dividend and remits it by the 20th of the following month.
Choose the unit that has the greatest impact on your profit, employees, square footage, customers, or work hours. Profit divided by that unit is your economic denominator.
No. Numbers don't replace your market knowledge, but they protect it from the enthusiasm of the moment. The decision is still yours; the numbers simply tell you how much it costs and how much it brings in.
The total cost versus the revenue it is expected to generate.
Read →Return and return time, simply calculated.
Read →When debt helps and when it harms, its cost versus the return.
Read →Contribution margin and break-even point for a new line.
Read →From the remaining profit, without leaving the business cash-strapped, and as a dividend.
Read →The only metric that matters most for your business, according to Collins.
Read →Accounting, financial statements, tax returns, and financial advisory services in a monthly package. The first consultation is free and with no obligation.
You make the decisions, but you need to have the numbers ready before you decide. We calculate them together with you as part of the financial advisory included in the monthly packages.
