Employers who hire a new employee have the right to use tax incentives related to the refund of part of the paid tax and contributions. These are incentives that are obtained for the withdrawal of workers from the bureau, who are on the record for a certain period. They can be used to claim refunds of 65%, 70% and 75% of taxes and contributions.
He realizes this right when he establishes an employment relationship with a new employee and it refers exactly to the following:
- refund of part of the paid salary tax, based on the salary for a newly employed person,
- refund of part of paid contributions for mandatory social insurance, based on wages for a newly employed person.
The use of these incentives has been extended for 2024 as well, so employers can use them until December 31, 2024. This refers to the salary paid as of December 31, 2024. years.
Tax incentives for new office workers – rates
Employers for new jobs for workers who were previously registered with the NES will receive significant reductions in taxes and contributions. The benefits that can be obtained are for the employment of one or more workers:
- 65% – if he employs at least one and at most nine workers,
- 70% – if it employs at least ten and at most 99 workers,
- 75% – if it employs at least 100 workers.
#If the employer establishes an employment relationship with at least one and at most nine newly employed persons, he will receive a refund of 65% of paid taxes and contributions.
# When he establishes an employment relationship with a minimum of 10 and a maximum of 99 newly employed persons, he will receive a 70% refund.
# If he establishes an employment relationship with at least 100 newly employed persons, he will receive a refund of 75%.
When hiring new employees, the state provides many benefits and tax breaks for employers who hire new employees, because in this way it enables them to save money.
In addition to the mentioned benefits, there are other current tax incentives in Serbia that make it easier for employers to hire new people. We have written in detail about this topic – All tax benefits for employment in Serbia.
Conditions for obtaining tax incentives for employers
In order to be entitled to benefits for new employees, certain conditions must be met. It applies both to the company and to the new person who is employed.
An employer that can use these benefits for new workers can only be a company from the private sector, that is:
- legal entity,
- entrepreneur,
- lump sum entrepreneur,
- farmer entrepreneur.
In that case, the company will exercise the right to use tax incentives if it concludes an employment contract with the employee, in accordance with the Law, and registers him for compulsory social insurance in the Central Registry of Compulsory Social Insurance.
Additionally:
- the condition for companies that registered their activity before 2014 – that by establishing an employment relationship with a new employee, the number of employees at the employer should increase compared to the number of employees on March 31, 2014. years;
- reductions can also be used by companies that started their activities after 31.03.2014. years.
Conditions for new employees
In parallel with the conditions for employers, there are also conditions for new employees, and the basic thing is that the person being employed must be registered in the records of the National Employment Service as unemployed for at least six months without interruption before starting the employment relationship, and if a trainee is employed then 3 of the month. So, these are workers from the employment office, who were actually registered with the NES for 6 months before employment, or 3 months if they were employed as trainees.
Also, in the period before establishing the employment relationship, the newly employed employee must not be employed by the employer. In addition, if the employer where you are employed has a related legal entity, the condition is that you must not have been employed by a legal entity related to that future employer in the previous period.
Who cannot use the benefits
In accordance with the current regulations, the following legal entities from the state and public secret cannot obtain tax benefits for office workers:
- state bodies and organizations,
- Protector of Citizens,
- Commissioner for the Protection of Equality,
- State audit institution,
- Commissioner for Information of Public Importance and Protection of Personal Data,
- Anti-Corruption Agency,
- Republic Commission for the Protection of Rights in Public Procurement Procedures,
- Commission for the Protection of Competition,
- Securities Commission,
- Fiscal Council,
- Republic Broadcasting Agency,
- Energy Agency of the Republic of Serbia and other public agencies,
- public companies,
- public services,
- other direct or indirect budget users, i.e. users of public funds.
Expiry date of incentives for new employees
These incentives are valid for employers who pay wages for new employees as of December 31, 2024. years.
Employers who use the benefits will receive a refund of taxes and contributions paid by newly hired employees. They receive a refund after submitting a refund request.
Example: If the employer hires one worker, he can get a 65% discount. If he employs 20 workers, he will receive a 70% reduction. If he hires 200 workers, he will get a return of 75%.
Tax incentives 75%
An employer – a micro and small legal entity, an entrepreneur, a lump-sum entrepreneur or an agricultural entrepreneur can use another type of tax incentives for hiring workers, also in the form of a refund of 75% of paid taxes and contributions. The use has been extended for the year 2024, so the benefits can be used for earnings ending on December 31, 2024. years.
In order to be entitled to a refund in the amount of 75% of paid taxes and contributions, the condition is that he hires at least two new employees and thus increases the number of employees compared to the previous period. The tax relief of 75% for two newly employed workers can be used only from the month in which the right to the relief is acquired.
The condition for the company to realize the possibility of using the discount is to increase the number of employees by at least two in relation to the number of employees that the company had on 31.10.2015 by establishing an employment relationship with new persons. years. The condition for workers is that in the previous period they were registered with the NES for at least 6 months without interruption, and for trainees at least 3 months.
For additional questions, clarifications, or if you need payroll services in Belgrade, please contact us. The team of expert tax advisors and accountants of the accounting agency HLB TM DOO will respond to your requests as soon as possible.
