Employee cost in Albania: the 2026 numbers behind one hire

Two statutory charges sit on top of every Albanian salary. The employer pays sigurime shoqërore (social insurance) at 15% and sigurime shëndetësore (health insurance) at 1.7%, a combined 16.7% of gross pay for 2026.

The employee carries a bigger share than the employer does: 9.5% social insurance and 1.7% health insurance, 11.2% in total, plus personal income tax. Those amounts come out of the gross salary, so they shape what the person takes home but do not change what you spend.

Both employer and employee charges are reported on the monthly listëpagesa (payroll list) and paid to the General Directorate of Taxes (DPT) no later than the 20th day of the month after the one being paid. DPT then passes the money on: the Social Insurance Institute (ISSH) pays pensions and cash benefits, and the Compulsory Health Care Insurance Fund (FSDKSH) runs health cover. Our guide to how Albanian payroll runs each month covers the filing side in detail.

For budgeting, then, the formula is short. Annual cost equals twelve months of gross pay, plus 1.7% of all of it, plus 15% of whichever is lower: the gross salary or ALL 186,416 a month.

Contributions are never charged on less than ALL 50,000 a month, and the social insurance part is never charged on more than ALL 186,416. Both limits were raised on 1 January 2026: the floor moved up from ALL 40,000 in line with the new minimum wage, and the ceiling rose from ALL 176,416.

The cap is the detail that most cost estimates miss. Once a salary passes ALL 186,416 a month (about €2,026.70), employer social insurance freezes at ALL 27,962.40 a month, however much higher the pay goes. Health insurance has no such ceiling and keeps running at 1.7% of the full gross.

So the effective uplift drifts down as pay rises. At ALL 186,416 or below you pay the full 16.7%. At ALL 200,000 it is 15.68%. On a very senior salary the social element shrinks further as a share of pay, and the total on-cost edges towards the 1.7% health rate plus a fixed lek amount.

At the other end, the floor protects the contribution base. A part-time or low-paid contract still carries contributions calculated on at least ALL 50,000 a month, which is worth knowing before you model a small role on a few hours a week.

A quick comparison shows how much the January 2026 changes moved the bill. Under the 2025 ceiling of ALL 176,416, the most an employer paid in monthly social insurance for one person was ALL 26,462.40. The new ceiling lifts that to ALL 27,962.40, an extra ALL 1,500 a month for every employee earning above the old cap. Firms with several senior people on the books felt that rise straight away.

Our example engineer is senior, works in Tirana and earns ALL 2,400,000 gross over the year, which arrives as twelve monthly payments of ALL 200,000. Converted with the euro at ALL 91.98 (the Bank of Albania figure published on 2 October 2026), the salary is about €26,093, and about one and a half times the Q1 2026 average wage that INSTAT reports for information and communication jobs.

The employer side looks like this for the year. Social insurance at 15% applies to the capped base of ALL 186,416, giving ALL 27,962.40 a month or ALL 335,548.80 a year. Health insurance at 1.7% applies to the full ALL 200,000, giving ALL 3,400 a month or ALL 40,800 a year. Add everything up and the statutory cost is ALL 2,776,348.80 for the year (about €30,184), which works out to ALL 231,362.40 in each pay month.

On the employee side, social insurance of 9.5% on the capped base comes to ALL 212,514.24 for the year, and health insurance takes another ALL 40,800. Income tax is worked on gross pay without first subtracting those contributions: (2,400,000 minus the ALL 360,000 annual deduction) at 13% gives ALL 265,200. What the engineer keeps is ALL 156,790.48 per pay month, which adds up to ALL 1,881,485.76 over twelve months (around €20,455).

Two quirks of this salary are worth flagging. The taxable amount, ALL 2,040,000, sits exactly at the top of the 13% band, so not a single lek is taxed at 23%. And total employee deductions come to 21.60% of gross, against an employer on-cost of 15.68%. Monthly, the employer transfers ALL 231,362.40 in total: ALL 156,790.48 reaches the engineer’s bank account, and the remaining ALL 74,571.92 goes to DPT as contributions and withheld tax in a single payment with the listëpagesa.

Our separate piece on what a senior developer in Tirana costs takes this profile further, including pay benchmarks.

Three salary points make the pattern easy to see: the lower the salary, the closer the uplift sits to the full 16.7%. All figures are monthly, 2026 rates.

• Minimum wage, ALL 50,000 (about €543.60). On top go ALL 7,500 social and ALL 850 health insurance, ALL 58,350 a month in all. The employee keeps ALL 44,400, because a salary at this level pays no income tax at all.
• Information and communication average, ALL 131,747. Still under the cap, so the whole 16.7% bites: ALL 22,001.75 extra, and ALL 153,748.75 (about €1,671.55) leaves your account each month.
• Senior developer, ALL 200,000. Past the cap. The employer charges total ALL 31,362.40, taking the month to ALL 231,362.40 (about €2,515.36).

The minimum wage line explains why entry-level hiring in Albania is cheap in absolute terms but not in percentage terms: every lek of it attracts the full employer rate. The full background is in our article on the ALL 50,000 minimum wage.

Statutory contributions are the predictable part. Several Labour Code rules add cost in quieter ways, and a realistic budget allows for them.

• Paid leave of at least 22 working days a year, plus public holidays (15 holiday dates in the 2026 calendar). When a holiday coincides with a weekly rest day, the day off is carried to the following working day rather than lost.
• Sick pay: a medically certified absence costs the employer a minimum of 80% of salary across its first 14 days, and ISSH benefit replaces that from day 15.
• Premiums: overtime costs at least 25% extra, or 50% when the overtime falls on a weekly rest day or an official holiday; work between 19:00 and 22:00 earns at least 20% more, and night work between 22:00 and 06:00 at least 50%.
• Work expenses and tools, which the employer must reimburse or provide unless agreed otherwise. A clause that folds expenses into salary is void.
• A seniority payment if you terminate someone with three years’ service or more. The Code’s minimum is 15 days of wages per completed year, so a five-year employee costs at least 75 days’ wages on exit.

Benefits in kind can form part of the package, but no more than 20% of monthly pay may be given that way, and salary must go through the banking system, in lek unless agreed otherwise. Income tax on a bonus falls in the pay month it lands in, which can push that month’s withholding up sharply even if the annual picture is modest.

Leave is the cost line that people underestimate. Untaken days cannot simply be bought out. Cash instead of leave is possible under the Labour Code at one point only, when the employment comes to an end. Days are meant to be taken within the leave year, with a grace period running to 31 March, and an untaken claim does not expire for three years. If a departing employee has a backlog, the final payslip has to cover it, so it pays to track balances from the start.

Hiring via Employer of Record Albania means a monthly service charge as well, which we set from €599 per employee per month. That charge has its own invoice line, kept apart from salary and contributions. The fee is a service charge, not a tax, and it does not alter the statutory figures above.

For the Tirana developer, €599 a month adds €7,188 a year, about ALL 661,152. Statutory cost plus the fee comes to roughly €37,372 a year. Set that against the alternative of founding an SHPK (limited liability company), keeping an accountant, filing monthly payroll yourself and running a bank account in lek; the article weighing an EOR against forming an SHPK lays out where the break-even tends to fall.

What the fee pays for is the employment itself: you choose the person, the Albanian contract names us as employer, and from then on our team processes pay, files the listëpagesa, pay contributions and tax, and handle leave and sick-pay administration. If you are still working out what that arrangement looks like day to day, our plain-English explanation of how an EOR works in Albania is the best place to begin.

Agree the salary in gross lek, monthly. Albanian candidates usually think in net monthly pay, so show both figures in the offer and make sure everyone is reading the same number. A salary quoted in euros invites currency drift; the Labour Code expects payment in lek unless the parties agree otherwise.

Check where the salary sits against the tax thresholds. Annual pay just above ALL 600,000 triggers a sharp drop in the basic deduction, from ALL 600,000 to ALL 420,000, so a small raise near that line can leave the employee with less net pay than before. Above ALL 200,000 a month, every extra lek is taxed at 23%.

Price in rises you already know about. Contribution floors and ceilings move with the minimum wage, which has been raised by Council of Ministers decision before; the 2027 budget was still under consultation at the end of September 2026, with nothing adopted. Revisit the model every January.

Keep the euro figures as a guide only. Everything in this article converts at ALL 91.98 to the euro, the Bank of Albania rate on 2 October 2026. Payroll itself runs in lek, so a firm budgeting in euros carries the exchange movement between the offer and each pay date.

Finally, run any profile through a full calculation rather than a flat 16.7% mark-up. For lower salaries that rate is exact; for anyone above the cap it overstates cost, sometimes by enough to change a hiring decision.