Albania

Employer of Record in Albania

Expanding your business in Albania can become complicated without any local assistance because understanding and implementing Albanian employment laws can be time-consuming. Skuad is a major EOR solutions provider in Albania for companies looking to hire local professionals without going through the hassle of establishing a physical office in the country.

With our comprehensive service offerings in dozens of countries and a high-tech HR platform, you can hire employees, run payrolls, and comply with local regulations without breaking a sweat over due diligence. We fulfill your requirements within days of receiving a request. Book a demo to know more about our EOR solutions.

Albania at a Glance

Official language: Albanian

Capital: Tirana 

Area: 11,100 sq. miles

Population: 2.8 million 

GDP: USD18.92 billion

Currency: Lek (ALL)

Calling code: +355

Internet TLD: .al

Fiscal year: Calendar year

Employment in Albania

The geographical proximity of Albania with major trade routes across Europe makes it an ideal destination for business expansion. For employment in Albania, the government demands written or verbal contracts between the employer and the employee.

As a global EOR partner, Skuad ensures your compliance with Albania labor laws and other regulations guiding your employee management process. Additionally, we oversee employee expenses, documentation, work permits, severance, termination, payroll, and contract best practices, as required.

Employment entitlements in Albania

Minimum wages

ALL 19,000

Statutory working hours

As per Article 83 of the Albanian Labor Code, reasonable working hours are eight hours per day, five days a week.

Maximum working hours

The maximum working hours are 50 hours weekly.

Overtime compensation

According to Article 91 of the Albanian Labor Code, an employer must provide 125% of normal pay for overtime on weekdays and 150% for weekends. If an employee works overtime during the evening (7 pm to 10 pm), they must not receive less than 120% of normal pay. 

Only adults (over 18 years old) are permitted to work between 10 pm and 6 am. An employee can only work for eight hours straight (without a break) including the day’s work and night’s overtime. The employer must immediately provide one day off after such night overtime. An employee must not receive less than 150% of normal pay for night overtime.

Public holidays

• Christmas
• National Youth Day
• Liberation Day 
• Nevruz 
• Independence Day
• Mother Teresa Beatification Day 
• Eid al-Adha
• Eid ul-Fitr
• Labor Day
• Martyrs Day 
• Easter Sunday
• Summer Day
• New Year Holiday 
• New Year’s Day

Paid leaves

An employee gets 20 days a year that can be redeemed by the first three months of the next calendar year if they have worked for at least one year at a company. Employees are permitted to take up to five days of paid leave straight. However, it can be extended based on the agreement between the employer and the employee.

An employee must provide notice for vacation leaves 30 days before the leave date. 

In case of a family member’s death, employees get 10 days of paid leave. Also, 15 days of paid leave can be availed of for caring for children under three years of age, and 12 days for children above three years.

If an employee is unable to take their paid leaves until March of the next calendar year, the employer must compensate them in salary for the number of leaves that were not taken.

Sick leave

At 80% pay, employees are awarded up to 14 days of sick leave on furnishing a medical report duly signed by a practicing doctor. If the employer deems it necessary, the employee must consult another doctor as required. The medical details of the employee must be kept confidential in such cases. 

After 14 days of sick leave, an Albanian employee can benefit from the social insurance scheme.

Maternity leave

Article 104 of Albania’s Labor Code dictates that pregnant women must not work 63 days after and 35 days before childbirth. 

According to Article 27 of Social Security Law, a pregnant employee will receive payment according to the social security contribution scheme for 365 days. 

If a woman gives birth to more than one child, the number of maternity leave days increases to 390. Further, the Social Security Institute pays up to 80% of their salary for the first 150 days of the leave and 50% for the remaining days. The employer is not required to pay for maternity leave.

Paternity leave

A male employee is eligible for a paid leave of three days. An insured employee can take up to 63 days of leave after childbirth only if the mother goes back to work or is not insured.

Other paid leaves

• Marriage: Five days
• Serious illness of a close family member (with medical proof): Ten days

Unpaid leaves

Decisions regarding unpaid leaves can be taken based on mutual agreement between the employer and the employee.

Bonus

The bonus is awarded based on performance.

Healthcare

The Albanian government provides universal health benefits.

‍Connect with Skuad experts to learn more.

Contractors Vs. Full-time Employees

The labor laws in Albania allow the following types of engagement between the employer and employee.

• Home-based employment: The employer assigns an alternative of working from home or any other establishment as deemed to be fit by the employee instead of working from the physical business location of the company. 
• Part-time employment: In part-time employment, the employee works for a shorter duration than a full-time employee working in the same condition. In this type of employment, the employer pays based on per hour or half-day. ‍
• Commercial agent agreement: Within a particular geographical area of Albania, one party permanently agrees to make contracts on behalf of the other party. The latter cannot sign this agreement with more than one party in the same area and at the same time.

Employment contracts in Albania must be provided in writing, even when the employer discusses the terms verbally with the employee. In this case, the contract must be drawn within thirty days from the date of the oral employment agreement. This agreement must contain every legal element along with the signatures of the employer and the employee.

Listed below are the mandatory legal elements of an employment agreement in Albania.

• Information about the employer and employee
• Workplace details
• General job description
• Starting date of the job
• Duration of contract (if it is fixed-term)
• Duration of paid vacations 
• Termination conditions
• Primary aspects of salary and day of receipt of the mentioned salary 
• Normal working hours (for a contractor or full-time employee)

The basic laws and rules are common for both contractors and full-time employees in Albania. According to the employment contract law in Albania, unless mentioned otherwise, a full-time employee’s contract lasts indefinitely. If an employer appoints an employee for a fixed period, it must be mentioned. Skuad does the heavy lifting for your company by drawing employment contracts and ensuring compliance with local laws, whether you require a full-time or part-time employee. Talk to Skuad experts to learn more.

Hiring in Albania

The Labor Code of 1995 governs the employment procedures in Albania. According to a study, Albania was the only country in Europe where the ratio of graduates in science and technology was lower for men than for women in 2018. Another study by the Institute of Statistics showed that 32,889 Albanian graduates and postgraduates completed their education in 2019–20. This knowledge hub of Albania can be recruited in your company to expand its services in Europe.

The legislation applicable to an employer and employee in Albania is as follows.

• The Albanian Constitution 
• International conventions
• Labor Code and sub-legal acts
• Collective employment contract
• Individual employment contract
• Employer’s internal regulations
• Local customs and occupational customs

Within seven days of appointing a new employee, the employer must report to the labor office in Albania. You must also inform the relevant tax authorities about new employment at least 48 hours before commencing an employer-employee relationship.

Candidates below 16 years of age cannot be employed according to the Albanian Labor Code. As per law number 7995, for every 25 employees, an employer must hire one disabled person. A seriously disabled employee could take the place of five employees with a mild disability. The employer must make the required special arrangements for the disabled employee with the help of a subsidy from the labor office. However, the employer must pay a fund amount to the National Employment Service if they choose against hiring disabled people.

The mandatory and supplementary employee health benefits in Albania are listed below.

• Compensation
• Healthcare
• Health insurance
• Life insurance
• Personal accident insurance
• Retirement
• Travel health insurance

Hire employees in Albania with the local Skuad experts. Skuad’s comprehensive suite of services makes it one of the leading hiring companies in Albania and dozens of other countries for onboarding employees. Book a demo to experience the process.

Probation & Termination

The standard probation period in Albania is three months unless specified otherwise in the employment contract. If the contract makes no mention of the probationary period, Albanian labor laws specify that for a fixed or indefinite term of employment, the probation period is three months. If an employer wishes to terminate an employee or the latter wants to resign, they can both do so by sending a five-day notice.

As per Article 147 of the Albanian Labor Code, an employer is not permitted to terminate an employee when, as per the laws, the employee:

•  Is completing military service
• Receiving payment from the Social Insurance Institute or the employer for a temporary inability to work 
• Is on leave approved by an employer

For termination of employment in Albania, prior notice is not required when the employment is fixed-term. The employer can terminate a contract with or without a cause by providing a written notice. However, an employee can also be terminated immediately for special reasons.

If an employer terminates an employee after the probation period, the following procedure must be followed.

• The employer must convene a meeting to discuss the reason for termination. In this case, the employee must receive 72 hours’ notice of the meeting. 
• The employer can only terminate the employee on a date that is 48 hours or one week after the meeting date.

Failing to comply, the employer will be obliged to pay two months’ salary to the employee along with other compensations.

In case of termination without a reasonable cause, the employer must pay 12 months’ salary as severance to the employee. Article 146 of the Labor Code specifies the following cases under termination without cause.

• When the employee provided evidence in court 
• The employee had reasonable complaints regarding the employment contract
• When the employee is terminated based on physical or social characteristics (race, sex, color, political beliefs, etc.)
• When an employee participates in lawful activities of lawful labor organizations
• When an employee must exercise rights

Skuad manages the compliance required for individual or collective dismissals according to the Albanian laws. By operating as your local partner, the legal and HR responsibilities of your organization are completely managed by our experienced professionals. Talk to an expert at Skuad to learn more about our services.

EOR Solution

Establishing a physical location in Albania for expanding your business can be a daunting task in terms of compliance. Employers of Record (EOR) are third-party organizations that hire employees for your company on their payroll. They manage the responsibility of handling due diligence and the required formal procedures relating to HR and employment contracts. By working with an employer of record companies in Albania, your company can efficiently hire overseas without worrying about the risk of violating local laws.

Through Skuad’s employer of record service, you can get professionals to carry out immigration, payroll, and employment responsibilities without interfering in your day-to-day operations.

Minimum service duration

Three months

Accepted currencies

USD/EUR/GBP

Book a demo to understand the process of creating your remote Albanian team.

Types of Visas in Albania

An Albania work visa is mandatory for foreigners who wish to work in the country. However, there are certain exceptions to this rule. Citizens of the United States can live in Albania without a residence permit for up to 365 days. Also, the citizens of Schengen countries and the European Union are permitted to work in Albania under the same employment laws as Albanians. People outside these exemptions must satisfy Albania work visa requirements to be eligible for employment.

The documents listed below are required for getting different types of work visas in Albania.

• The standard form of application duly signed by the employer
• Passport copy
• Employment contract
• Five photos
• National Registration Center extracts for confirming employer registration

After submitting the required documents at the Albanian Consulate or regional Labor Office and paying EUR 45 as fees, the procedure for getting a work visa and permit will commence.

Every foreigner must apply for a visa from the options listed below.

• Aeroportual visa: For airway transit
• Type C: For short-term visa‍
• Type D: For long-term visa

A residence permit in Albania cannot be renewed more than five times. Get in touch with Skuad to sponsor a work visa for your foreign employees in Albania.

Work Permits

As per law number 9959, foreigners are permitted to work without any restrictions. However, they must have the required work permit in Albania before starting work. Tabulated below are the issuing offices of an Albania work permit for foreigners.

A foreigner residing in Albania must have a residence permit issued by the Regional Directorate of Border and Migration. Skuad can reduce the complications of getting an Albania work permit without a job offer by sponsoring visas for your employees if required. Get in touch to know more about the procedures.

Payroll & Taxes in Albania

Albania payroll tax rates are common for part-time and full-time employees. According to the legislation, every employer and employee must pay for health insurance and social contributions. The employer must pay 15% of the monthly salary for social security and 1.7% for state health insurance. Similarly, an employee must pay 1.7% of the monthly salary for health insurance and 9.5% for social security. The salary range for paying social security taxes is 18,820 to 84,100.

An employee’s income is taxable as follows.

Albania employer payroll and taxes are listed below.

Corporate tax

• Turnover more than ALL 14 million: Fifteen percent
• Turnover less than ALL 14 million: No tax
• Agricultural cooperatives, automotive industry, software developers/produce, and agritourism: Five percent

Delivery of shares

No specific provision

Dividends generated from shares that are delivered to employees

10%

Social security

• Employer: 15%
• Employee: 9.5%

State Health Insurance

7%

VAT

• Voluntary registration: Annual income above ALL 5 million
• Mandatory registration: Annual income above ALL 10 million

Local taxes

Annual turnover of ALL 0 – ALL 8 million: 0%

Partner with local payroll specialist Skuad for efficient payroll outsourcing in Albania.

Incorporation: How to Set Up a Subsidiary in Albania

Exploring business opportunities in Albania? You can set up the following types of businesses in this European country.

• Sole entrepreneurship 
• General partnership 
• Partnerships 
• Limited partnerships 
• Limited liability companies (LLCs)
• Joint-stock companies
• Representative branches or foreign company branches

To incorporate a holding company in Albania, you must register your business entity with the National Registration Center which instantly registers your business with the social institute, health insurance institute, tax administration, and labor office. After receiving the Registration Certificate, your business must be registered with the Municipality Bureau of Internal Revenue. The current information along with the history of an organization is provided publicly on the portal of the National Registration Center.

Your company can get registered within two days of providing the listed details.

• Company name
• Description of business activities
• Registered local business address
• Particulars of shareholder(s) and percentage
• Particulars of director(s)
• Paid-up capital (ALL 100 or more)
• Articles of Association 
• Memorandum

Skuad makes it easier to expand your business in Albania without worrying about incorporation-related technicalities. With our local physical location in place, your company will seamlessly operate in Albania without getting entangled in the complex maze of legalities.

Professional Employer Organization (PEO)

A professional employer organization in Albania (PEO) shares the responsibility of managing employees and payroll with your company. Unlike EOR services where the complete responsibility of compliance management lies with the outsourced company, a PEO works jointly with your business.

Skuad provides comprehensive HR services for globally managing your employee teams. Learn more by connecting with our professionals today.

Conclusion: What Gives Skuad’s Albania Solutions an Edge?

Selecting Skuad as your global partner for managing the workforce, payroll, and taxes in Albania and other countries will allow you to focus your time and resources on improving your operations. Without any interference in your daily business, our professionals will draw employment contracts, advice regarding termination, probation, and severance, sponsor work visas in Albania, and help your expansion without requiring a local business address.

Connect with the legal and technical experts at Skuad today to build your Albanian team of employees.

FAQs

1) What is an employer of record in Albania?

Employer of record becomes the legal employer for your Albanian staff, handling HR burdens like payroll, taxes, and social security. This eliminates the need for a local setup, saving you time and money. EORs ensure compliance with Albanian labor laws, minimizing legal risks as you build your international team. Calculate cost to employ in Albania with Skuad’s free calculator. 

2) What is the employer of record for international employees?

Employer of Record services helps companies hire international talent without setting up a local entity. They take up legal responsibilities for your global team. 

3) What is the difference between EOR and PEO?

An employer of record (EOR) legally employs individuals on behalf of another company and handles all compliance, payroll, and HR tasks. A Professional Employer Organization (PEO) co-employs staff, sharing responsibilities with the client company but needs the client to set up a local entity.

4) What is the difference between payroll and employer of record?

EORs act like your global HR department, handling everything from hiring to benefits for your global team, including payroll. Payroll companies, however, focus on software solutions for salary and wage disbursement.