The administrator of a trading company is not appointed under the Labor Code. His appointment, powers, and responsibilities are governed by the law on merchants and trading companies. However, when the administrator performs actual work in exchange for remuneration, his relationship may also constitute an employment relationship under Article 12 of the Code, and then obligations for wages, contributions, and reporting arise.
This page shows the difference between a mandate and an employment contract, when contributions arise, and how the administrator's remuneration is handled.
Read also: The Boundaries of the Employment Relationship: The Complete Guide
The administrator simultaneously holds two different positions arising from two different laws.
| Role | Source | Content |
|---|---|---|
| Organ of society | Law on Commercial Companies | Appointment, representation, powers and responsibility to the company |
| Employee | Labor Code | Work performed in exchange for an organization's compensation. |
The first role always exists. The second role exists only when the conditions of Article 12 are met, namely when there is real work, continuity, and remuneration.
Caution: Appointment as an administrator in the commercial register neither creates nor excludes an employment relationship. These are two separate matters. A person can be an administrator without being an employee, and can be both at the same time.
Read also: Business Registration and Corporate Bodies
The criterion is the same as for any other relationship. Content determines it, not the label.
When these are fulfilled, the proper form is the employment contract with the company, including all the mandatory elements of Article 21.
Read also: Mandatory elements of the employment contract
Contributions do not stem from the Labor Code but from social security and tax legislation. The basic rules for 2026 are as follows.
| Element | Value in force |
|---|---|
| Minimum wage for contribution purposes | 50,000 LEK |
| Maximum salary for contribution purposes | 186,416 LEK |
| Employer contribution | 16.7 percent |
| Employee contribution | 11.2 percent |
| Payroll period | By the 20th of the following month |
When the administrator is declared an employee of the company, the contribution base cannot be lower than the applicable minimum wage, regardless of the agreed compensation.
The specific contributory status of an administrator depends on the form of the relationship and on his overall situation; therefore, it is verified on a case-by-case basis with the tax administration before being recorded on the payroll.
Read also: Contributions on gross pay and the rates in effect
The reward can come in two forms, and each is treated differently.
| Form | Treatment |
|---|---|
| Salary under the employment contract | Contributions and income tax on wage income, with a monthly pay slip. |
| Award as an organ of society | Treatment under tax legislation for this type of income. |
| Dividend as a partner | Withholding tax on dividends, separate from any employment compensation. |
Confusing the three forms is the most common mistake. Dividends do not replace salary, and salary does not replace dividends.
Read also: Dividend and withholding tax
When the administrator has an employment contract, the usual rules apply to him, with some practical exceptions arising from the position itself.
The scheduling rules also apply, but in practice they are difficult to document for a managerial position. This does not eliminate the obligation, so records of hours are kept for the administrator as well.
Here too, two levels are distinguished. Removal from office as a corporate body is governed by the Commercial Companies Act and by the decision of the partners or the assembly.
The employment contract, if it exists, does not automatically end with termination. It requires its own resolution through the procedures and deadlines of the Labor Code, including notice periods and, where applicable, severance pay.
Read also: The removal procedure and its deadlines
Not automatically. It is an organ of the company under the Commercial Companies Code, and it also becomes an employee when the conditions of Article 12 of the Labor Code are met.
Yes, when he performs actual daily work in exchange for compensation. In this case, the contract must include the mandatory elements of Article 21.
The current minimum wage is 50,000 LEK as of January 1, 2026. The base cannot be lower than this amount.
The dividend is income from equity participation and does not replace compensation for work performed. When actual work is involved, it is treated separately.
Yes, when he has an employment contract. No fewer than 22 working days per year, according to Article 92.
The employment contract does not end automatically. It must be terminated in accordance with the procedures and deadlines of the Labor Code.
Yes, when he is an employee. The managerial position makes documentation more difficult, but it does not eliminate the obligation.
To the tax administration, according to the specific form of the relationship and the individual's situation.
