It is important to know that when you register as a business, you will simultaneously need to become self-employed, hire employees, or contract someone to assist in developing your activity.
If you do so, an employer-employee relationship will be established, according to the terms set forth in Law No. 9136, dated 11.09.200, "On the collection of mandatory social and health insurance contributions in the Republic of Albania," as amended, as well as the Labor Code.
Employers, through employment contracts with employees, define rights and obligations as well as the salary for the work performed. Based on these contracts, employers must guarantee the declaration of the employee, as well as the calculation, withholding, and payment to the tax authorities of social and health insurance contributions, and payroll tax (income tax).
A brief guide to social and health insurance obligations.
The responsible body for collecting contributions is the Tax Administration, on behalf of the Social Insurance Institute (ISSH) and the "Mandatory Health Care Insurance Fund" (FSDKSH).
A self-employed person is a taxpayer registered with the National Business Center and the tax authorities as a "natural person".
The self-employed person may exercise their economic activity under the following statuses:
The term “self-employed” does not include persons self-employed in agriculture.
The self-employed person is responsible for the payment of contributions for themselves and for unpaid family workers.
Self-employed pensioners who receive a pension and conduct a professional economic activity alone are not obligated to pay social and health insurance contributions.
The employer is responsible for withholding the employee’s contributions and for paying them to the tax authorities, along with the employer’s own contribution obligations as follows:
Mandatory health insurance contributions – contributions paid pursuant to Article 5 of Law No. 10 383, dated 24.2.20111, “On mandatory health care insurance in the Republic of Albania,” as amended.
Mandatory social insurance contributions – contributions paid pursuant to Articles 9 and 13 of Law No. 7703, dated 11.5.1993, “On social insurance in the Republic of Albania,” as amended.
Mandatory social insurance contributions of the employer for the employee and the employee’s own contributions are calculated on the employee's gross salary and other permanent bonuses arising from the employment relationship, within a minimum gross wage and a maximum wage level for the purpose of calculating social insurance contributions.
Mandatory health insurance contributions of the employer for the employee and the employee’s own contributions are calculated according to the established level on the employee’s gross salary and other permanent bonuses arising from the employment relationship, which cannot be lower than the minimum wage set by the Council of Ministers.
Mandatory social insurance contributions for the self-employed person, including the self-employed employer and the unpaid family worker, are calculated according to the predicted level as a percentage of the minimum wage approved for the purpose of calculating social and health insurance contributions, as determined by the Council of Ministers.
Mandatory health insurance contributions for the self-employed person, including the self-employed employer and the unpaid family worker, are calculated according to the predicted level as a percentage of double the minimum wage approved for the purpose of calculating social and health insurance contributions.
Declarations and payments of contributions are made according to the deadlines set by law.
When acting as an employer in an employer-employee relationship, you pay the employees' salaries, contributions, and obligations according to the declarations submitted periodically:
You must submit periodic tax declarations as shown in the table below:
| Type of Declaration | Declaration Deadline | Payment Deadline |
| Monthly Declaration of Personal Income Tax (Payroll Tax / TAP) | No later than the 20th day of the month following the tax period for taxpayers registered under Corporate Income Tax; for taxpayers registered under Simplified Corporate Income Tax, it is performed within the 20th day of the first month following the end of each calendar quarter. | No later than the 20th day of the month following the tax period for taxpayers registered under Corporate Income Tax; for taxpayers registered under Simplified Corporate Income Tax, it is performed within the 20th day of the first month following the end of each calendar quarter. |
| Monthly Declaration of Social and Health Insurance Contributions | No later than the 20th day of the month following the tax period for taxpayers registered under Corporate Income Tax; for taxpayers registered under Simplified Corporate Income Tax, it is performed within the 20th day of the first month following the end of each calendar quarter. | No later than the 20th day of the month following the tax period for taxpayers registered under Corporate Income Tax; for taxpayers registered under Simplified Corporate Income Tax, it is performed within the 20th day of the first month following the end of each calendar quarter. |
| Withholding Tax Declaration | No later than the 20th day of the following month. | No later than the 20th day of the following month. |
In this case, the declaration shall include self-employed persons, unpaid family workers, as well as employees.
You can find the tax declaration models below.
Source: General Directorate of Taxes.