It is important to know that when you register as an enterprise, you will also need to self-employ, hire someone, or contact someone to help develop your business activity. If you do this, an employer-employee relationship will be created, in accordance with the terms set forth in Law No. 9136 of September 11, 2003, “For the collection of mandatory social security and health insurance contributions in the Republic of Albania,” as amended, as well as in the Labor Code. Employers, through employment contracts with the employee, determine rights and obligations as well as the wage for the work performed. Based on employment contracts, employers must ensure the declaration, calculation, withholding, and payment to the tax authorities of contributions for social and health insurance, as well as payroll taxes.
Briefly, how to navigate our obligations regarding social and health contributions, etc.
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 with the tax authorities as a “natural person.”.
The self-employed person may exercise their economic activity under the following statuses:
- solely self-employed;
- self-employed with employees;
- self-employed with employees and unpaid family workers;
- self-employed without employees, with unpaid family workers.
The term “self-employed” does not include a person who is self-employed in agriculture. The self-employed person is responsible for paying contributions and for unpaid family workers. Self-employed pensioners who receive a pension and who carry on professional economic activities on their own are not required to pay social security and health care contributions.
As in the case of the self-employed and for all other enterprises. The employer is responsible for withholding the employee's contributions and for paying them to the tax authorities, together with the employer's own contribution obligations as follows:
Mandatory health insurance contributions – are contributions paid in accordance with Article 5 of Law No. 10,383 of February 24, 2011, “On Mandatory Health Care Insurance in the Republic of Albania,” as amended.
Mandatory social security contributions – are contributions paid in accordance with Articles 9 and 13 of Law No. 7703 of May 11, 1993, “On Social Security 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 security contributions for the self-employed person, including the self-employed employer and the unpaid family worker, They are calculated at the level prescribed as a percentage of the minimum wage approved for the purpose of calculating social security 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 at the rate prescribed as a percentage of twice the minimum wage approved for the purpose of calculating social security 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 report every employee starting work for the first time as a newly hired employee at least one calendar day before they begin work.
- You must declare any person leaving work to the tax authority within 10 calendar days from the date of departure. These declarations also serve as notifications for the State Labor Inspectorate, as defined in Article 22, points 4 and 5, of Law No. 9634, dated 30.10.2006, “On the Labor Inspectorate,” as amended, and are made available to the latter by the tax administration electronically.
- You must declare the payroll (listëpagesa).
You must submit periodic tax declarations as shown in the table below:
| Type of Declaration | Declaration Deadline | Payment Deadline | Calculation of wage garnishments |
| 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. | TAP 0–30,000: 0 TAP 30,001–130,000: 0.13 TAP 130,001+: 0.23 Employee health contributions: 0.017 Employee social contributions: 0.095 Employer health contributions: 0.017 Employer social contributions: 0.15 |
| 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.
Source: General Directorate of Taxes.