The calculation of social security and health insurance has some special cases that fall outside the general rule of monthly wages. Among these are the medical report, contributions by the self-employed, and voluntary payments above the minimum wage.
- The calculation of social security and health insurance is divided into five branches, with different rates for the employer and the employee.
- Total 27.91% of gross pay for an employment relationship, 16.71% from the employer and 11.21% from the employee.
- The self-employed person pays 23.1% Social Security on the minimum wage and 3.4% health insurance on twice that amount, two separate bases.
- The medical report for the first 14 days is paid by the employer; after that, it is covered by social insurance funds.
Situations when the employer does not pay the salary.
It may happen that the employee does not work for part or all of the tax period. The reason is the right to short-term benefits under the social insurance scheme. In this case, the benefits are requested from the social insurance authorities. The request is submitted through the taxpayer, according to the rules of Social Security Institute.
Benefits under the health insurance scheme are claimed in the same way. The rules are… Mandatory Health Care Insurance Fund. In the “List of Social Security, Health Insurance, and Employment Income Tax Contributions” declaration, the taxpayer does not self-report these benefits.
Medical report and the first 14 days
Law No. 7703, dated May 11, 1993, “On Social Insurance in the Republic of Albania,” as amended, and the Labor Code address the case of illness in two parts. This also applies to care for a sick child, as evidenced by a medical certificate. For the first 14 days of the certificate, payment is made by the employer. After the 14th day, the certificates are paid from social insurance funds.
The employee's earnings during the first 14 days are treated as regular pay. This applies to social security contributions, health insurance contributions, and income tax on employment income. It does not matter how the daily remuneration is calculated. From the calculated amount, the employee's contributions and income tax are withheld. The employer pays its own contributions separately.
Contribution rates by insurance branches
Two laws divide contributions into five branches. Law No. 7703/1993 on Social Insurance, and Law No. 10383 of February 24, 2011, “On Mandatory Health Care Insurance,” as amended. The rates are expressed as percentages of the monthly gross wage.
| Insurance branch | In total, the employee | The employer's share | The employee's share | The self-employed person, for himself |
|---|---|---|---|---|
| Illness, temporary disability | 0.30% | 0.12% | 0.18% | |
| Birthday | 1.40% | 0.83% | 0.57% | 1.40% |
| Pensions | 21.60% | 12.79% | 8.81% | 21.60% |
| Accidents and occupational diseases | 0.30% | 0.30% | 0.00% | 0.00% |
| Unemployment | 0.90% | 0.90% | 0.00% | 0.00% |
| Amount, social security | 24.5% | 15% | 9.5% | 23% |
| Amount, health insurance | 3.4% | 1.7% | 1.7% | 3.4% |
| Total | 27.9% | 16.7% | 11.2% | 26.4%* |
Social security contributions for the employee are calculated on the monthly gross wage. The base falls within the minimum wage limit and the maximum wage limit for contribution purposes. Both limits are approved by a decision of the Council of Ministers. The health insurance contribution is also calculated on the monthly gross wage. The base cannot be lower than the minimum wage, but there is no upper limit.
For the purpose of contributions, the gross salary also includes the amount the employer pays into voluntary pension funds as the employee's contribution. This amount is not included in the gross salary for the purpose of income tax on employment income.
The self-employed person and unpaid family workers
The self-employed individual calculates the social security contribution on the national minimum wage. The same base applies with or without employees. It also applies to unpaid family workers with whom he legally co-resides. The health insurance contribution is calculated on twice the minimum wage.
An individual may choose for himself a wage higher than the minimum. On that basis, he pays social security contributions of his own accord. The upper limit remains the maximum wage for the purpose of calculating contributions.
Source, General Directorate of Taxes.
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