Serbia to increase the minimum wage from 2027
As of January 1, 2027, the minimum wage in Serbia will increase. The minimum net hourly wage will rise to RSD 405, which is RSD 34 higher than the current rate of RSD 371 per hour.
Based on the average number of working hours per month, the new minimum monthly wage will amount to approximately RSD 70,000, or around EUR 600.
The decision to increase the minimum wage was adopted by the Government of the Republic of Serbia after the social partners — representatives of the government, trade unions and employers — failed to reach a joint agreement on the new minimum wage level. Compared with the current rate, the increase amounts to 9.2%.
Increase in the tax-free salary allowance
The increase in the minimum wage will also be accompanied by an increase in the tax-free portion of salary. The amount is expected to rise from the current RSD 34,521 to RSD 37,369.
This measure is particularly relevant for employers, as the higher tax-free allowance may partially offset the increase in total employment costs resulting from the higher minimum wage.
The proposed 9.2% increase was also accepted by representatives of employers.
How will the change affect businesses?
The direct impact of the higher minimum wage will be most evident for companies employing workers whose salaries are set at the minimum level. However, the effects of the increase may extend beyond employees who formally receive the minimum wage.
When the minimum wage increases, employers often face pressure to adjust the salaries of employees earning slightly above the minimum. This is intended to maintain appropriate differences between salary levels based on employees’ responsibilities, qualifications and the complexity of their positions.
As a result, an increase in the minimum wage can affect the overall salary structure within a company, rather than only employees who are officially paid the minimum wage.
At the same time, increasing the tax-free salary allowance to RSD 37,369 is intended to partially mitigate the additional financial burden placed on employers.
