Employing in Albania: the 14 questions employers bring us, answered for 2026

1

How can a business employ someone in Albania?

There are two routes. You can register an SHPK, the Albanian limited company, open a bank account and run payroll yourself, or bring in an employer of record that signs the Labour Code contract with your hire, files the monthly listëpagesa (payroll list) with the General Directorate of Taxes (DPT) and pays salary in lek. The statutory rules for 2026 are identical either way: 16.7% employer contributions, at least 22 working days of leave and the same notice scale. An SHPK suits firms that will also trade in Albania.

2

What does the 2026 bill for one Albanian employee look like?

Expect gross pay plus 16.7% in employer contributions for 2026, split 15% social and 1.7% health. Social insurance is only charged on the first ALL 186,416 of monthly pay, so the uplift shrinks as salaries rise. An engineer paid ALL 200,000 monthly therefore costs ALL 231,362.40, an on-cost of 15.68%.

Then budget for our fee as well: from €599 per employee per month. That engineer’s full year comes to about €37,372, converting at ALL 91.98 per euro (Bank of Albania, 2 October 2026).

3

When can a new Albanian hire begin work?

Usually once the candidate has worked out notice with their current employer, which runs from two weeks to three months on the 2026 Albanian scale. With no company to register first, the remaining steps are short: a signed written contract and a new-hire declaration to DPT at least 24 hours before the first working day. A hire who needs a unique permit gets a provisional one a working day after applying, under rules in force since April 2026.

4

Do you need to register an SHPK before hiring in Albania?

No. An employer of record can hold the employment contract, run payroll and pay contributions, so a business without an SHPK can still hire. Forming one is cheap: the minimum share capital is ALL 100 (about €1.09) and QKB, the National Business Centre, usually registers it within a working day in 2026. The costs come afterwards: a bank account, an accountant, monthly filings, 15% corporate tax and annual accounts. An SHPK makes sense when you plan to sell or invoice in Albania; for a handful of hires it rarely pays.

5

Can you engage a freelancer instead of an employee?

Yes, provided the person truly works for themselves. Albanian courts judge the relationship on how the work is done and paid, not on the contract’s title (Labour Code Art. 12). The income tax law in force since 2024 adds a numeric test that still applies in 2026: a self-employed person receiving at least 80% of income from a single client, or 90% from two clients or fewer, is taxed as an employee. Labour inspectors can fine up to ALL 1,500,000 in 2026 for core breaches, and back contributions follow.

6

Which clauses does Albanian law require in a contract?

A written contract is compulsory, and the Labour Code’s Article 21 sets out the minimum contents: who the parties are, the job and where it is done, when it starts, any fixed term, paid leave, notice, pay and pay date, weekly hours and probation. In 2026 probation lasts three months at most, with five days’ notice either way. Normal hours stop at 40 a week, and overtime earns a premium of at least 25%. Contracts are open-ended unless the work is temporary by nature.

7

How is an Albanian salary taxed?

Through the employer, who withholds income tax and both sides’ contributions, then files one listëpagesa with DPT and settles both by day 20 of the month after. For 2026, income tax takes 13% of yearly taxable income below ALL 2,040,000, then 23% on the slice beyond it, after a basic deduction, so anyone earning ALL 50,000 monthly owes none. Employees also lose 9.5% to social insurance and 1.7% to health insurance, while the employer adds 15% and 1.7% on top of gross pay.

8

How high is the minimum wage in 2026?

Since 1 January 2026 it has been ALL 50,000 gross per month, roughly €543.60, under Council of Ministers Decision 776 of December 2025. That is 25% above the ALL 40,000 paid through 2025. Pay at the floor attracts no income tax, though contributions remain due, and ALL 50,000 is also the lowest monthly base for contributions in 2026, part-time staff included.

9

How many days off a year must staff in Albania get?

The 2026 floor sits at 22 working days’ paid leave a year, with public holidays on top rather than counted in. The 2026 calendar has 15 holiday dates, and one that falls on a weekend moves to the next working day. First-year entitlement is proportional to time served, days should be used by the end of March the following year and cannot be paid out except when employment ends. The contract guide covers leave clauses.

10

Who pays for sick days?

The employer covers the opening fortnight of an illness backed by a medical certificate, paying 80% of salary or more in 2026 (Labour Code Art. 130). From the fifteenth day the Social Insurance Institute (ISSH) takes over, paying sickness benefit worth 70% of the daily net average for the previous six months, rising to 80% for people insured over 10 years, for up to six months in all. Sick days count as working time when leave is worked out, and dismissal is barred during paid sick leave.

11

Where do pension and health contributions go?

First to DPT, which takes them in alongside income tax in the monthly payroll filing. The Social Insurance Institute (ISSH) then pays state pensions, sickness and maternity benefit out of social insurance, funded in 2026 by a 15% employer share plus 9.5% withheld from staff, charged on monthly earnings from ALL 50,000 up to ALL 186,416. Health insurance, 1.7% from each side with no cap, funds the Compulsory Health Care Insurance Fund (FSDKSH). Accurate filings matter, because they build the employee’s pension record.

12

How do you end a contract in Albania?

A reason, a hearing and written notice. Article 144 says the employee must be invited in writing to a meeting with 72 hours’ warning, then given a reasoned decision 48 hours to a week later. Notice in 2026 runs from two weeks, for up to six months’ service, to three months after five years. After three years’ service, an employer ending the contract owes a seniority payment worth 15 or more days’ wages for each full year. A dismissal without reasonable cause can cost up to a year’s pay.

13

Can staff work remotely or cross-border?

Yes. The telework article of the Labour Code (Art. 15) lets the contract name the home or another agreed place as the workplace, with the employer supplying and maintaining IT equipment. The Code’s weekly hours, overtime and night-work rules do not bind teleworkers, so the contract has to fix hours and availability. For anyone living outside Albania, tax residency in 2026 turns on 183 days in the country or the centre of vital interests, and a non-EU national working in Albania needs a unique permit.

14

Which jobs does an EOR handle for you?

The employment administration. In 2026 that means drafting the Labour Code contract, declaring the hire to DPT before day one, running monthly payroll, filing the listëpagesa by the 20th, paying salary by bank transfer with a payslip, and handling leave, sick-pay claims and the termination procedure. Picking the person, setting the salary and steering daily work stay with you. All of that comes from €599 per employee per month.