Pension contributions in Albania: ISSH social insurance and health cover in 2026

Albanian payroll carries two separate contributions, each split between employer and employee. Social insurance (sigurime shoqërore) pays for old-age pensions and for the money people receive when sickness or a birth keeps them off work. Health insurance (sigurime shëndetësore) funds the public health care scheme.

For 2026 the rates are:

• Social insurance: 15% paid by the employer, 9.5% deducted from the employee
• Health insurance: 1.7% paid by the employer, 1.7% deducted from the employee
• Employer total: 16.7% on top of gross pay
• Employee total: 11.2% taken out of gross pay

Below the cap, that makes 27.9% of each gross salary flowing into the two schemes. The employer’s share is a cost on top of salary; the employee’s share is part of the salary the contract states, withheld before net pay reaches the bank.

The rates themselves did not change for 2026. What moved on 1 January was the base they apply to, through a higher floor and a higher cap. Both changes were announced by the General Directorate of Taxes alongside the rise in the minimum wage.

The base is the actual gross wage, with two limits: nothing is calculated on less than ALL 50,000 in a month, and the social insurance part ignores anything above ALL 186,416. In euros, at ALL 91.98, the floor is about €543.60 and the cap about €2,026.70.

The floor tracks the minimum wage, which rose from ALL 40,000 to ALL 50,000 on 1 January 2026. The cap moved too, up from ALL 176,416. For anyone earning above it, social insurance becomes a fixed monthly sum: ALL 27,962.40 from the employer and ALL 17,709.52 from the employee.

Health insurance works differently. It has the same ALL 50,000 floor but no ceiling, so both sides keep paying 1.7% on every lek of salary. A finance director on ALL 400,000 a month pays health insurance of ALL 6,800, and so does the employer, while their social insurance is frozen at the capped amounts.

The floor matters most for small or part-time roles. Someone whose contract pays less than ALL 50,000 a month still has contributions worked out on ALL 50,000, which makes the effective rate on their actual pay higher than the headline figures suggest. If you are pricing a few hours a week of help, run the numbers on the floor, not the salary.

Employers do not pay ISSH directly. The General Directorate of Taxes (DPT) collects both contributions together with the income tax withheld from salaries, through one monthly filing.

That filing is the listëpagesa (monthly payroll list), submitted on the DPT e-filing system. It lists each employee, their gross pay, the contributions on both sides and the tax withheld. Filing and payment share one cut-off, the 20th, one month in arrears: contributions on October salaries must reach DPT by 20 November.

From DPT the money is passed to the two funds. The Social Insurance Institute (ISSH, Instituti i Sigurimeve Shoqërore) pays pensions and the cash benefits linked to work: sickness benefit from the 15th day of a certified illness, maternity benefit and the birth grant. Health money goes to FSDKSH, the fund behind compulsory health care, which uses the two 1.7% shares to finance public cover.

Two declarations sit around the monthly cycle. Each new hire must be declared electronically at least a day before their first working day, and each leaver must be declared after the employment ends. Between those two points, every month’s listëpagesa adds to the person’s contribution record.

Every declared month adds to the person’s insurance history at ISSH. Pensions are the obvious long-run payoff, yet sickness and maternity money also hang on that history, and those can arrive within the first year of a job.

Sickness benefit is a clear example. Once an illness reaches its 15th day, ISSH takes over the payments. The benefit is a percentage of what the person earned, net, on average per day across the last six months: 70% for those insured for 10 years or less, 80% beyond that. Under-declared pay in those six months shrinks the benefit directly, and the insurance years decide which rate applies. Our guide to sick pay and the ISSH benefit covers the employer’s first 14 days as well.

Maternity benefit has an entry condition: 12 months of contributions. With it, ISSH pays for up to 365 calendar days (390 after a multiple birth), The rate is 80% of the same net daily average from the start of the leave until 150 days after the birth, and 50% after that. On top comes a one-off birth grant, ALL 25,000 in 2026, set at half the monthly minimum wage.

This is why candidates in Albania ask about declared pay. An offer that reports only part of the salary to DPT may look generous in cash, but it leaves the person with a thinner record for every one of these benefits, and it exposes the employer to back contributions and inspection. Pay through the bank, declare it in full and the record takes care of itself.

Take an account manager in Durrës whose contract says ALL 80,000 gross per month (roughly €869.75). The contribution lines on her payslip and on the employer’s bill look like this:

• Withheld from her for social insurance (9.5%): ALL 7,600
• Withheld from her for health cover (1.7%): ALL 1,360
• Income tax withheld: ALL 6,500
• Net pay to her bank account: ALL 64,540
• Added by the employer for social insurance (15%): ALL 12,000
• Added by the employer for health cover (1.7%): ALL 1,360
• Total monthly cost to the employer: ALL 93,360

One detail surprises people who know other systems: employee contributions are not deducted before income tax is worked out. The tax base is the gross salary, so her ALL 6,500 of tax is calculated on ALL 80,000, not on ALL 71,040. The progressive rates are explained in our article on Albanian income tax in 2026.

At this salary she is well below the cap, so both sides pay the full rates. Move her to ALL 250,000 and her social insurance stops rising at ALL 17,709.52, while health insurance keeps climbing to ALL 4,250 a month.

The floor and cap are monthly limits, so contributions follow the shape of pay across the year rather than an annual total. That has two practical effects.

First, a one-off payment lands in the month it is paid. Give the account manager a ALL 90,000 year-end bonus and her December gross becomes ALL 170,000. That is still under ALL 186,416, so the full rates apply to the whole amount: ALL 16,150 of social insurance from her and ALL 25,500 from the employer, plus 1.7% health on each side. Spread the same bonus over the year and the totals would be identical, because her monthly pay never reaches the cap either way.

For someone already above the cap the arithmetic changes. A developer on ALL 200,000 who receives the same bonus pays no extra social insurance at all, because that month’s base was already frozen at ALL 186,416. Only the uncapped 1.7% health contribution and income tax rise. The same applies to raises: every extra lek above the cap costs the employer just 1.7% in contributions.

Second, the employee’s own record is built on capped pay. A senior engineer earning twice the cap is insured, for social insurance purposes, as if they earned ALL 186,416. Benefits that ISSH calculates from that base will reflect the cap rather than the full salary, which is worth explaining to senior hires who compare offers. If you top up with benefits in kind, remember that Article 118 of the Labour Code limits them to 20% of monthly pay.

Self-employed people contribute on a fixed notional base rather than on what they earn. For 2026 the social insurance charge is 23%, applied to a monthly base of ALL 50,000; health insurance is 3.4%, worked out on ALL 100,000.

For a well-paid freelancer that is far less than an employee on the same income would contribute, and the gap is one reason some firms are tempted to keep long-term workers on service contracts. The tax rules push back. Article 12(ç) of the income tax law treats a freelancer’s earnings as salary for tax purposes once a single customer supplies at least 80% of them, or two customers together at least 90%. A court can also find that the relationship was employment all along.

If that happens, contributions that should have been declared can be claimed back, with interest. The tests are set out in freelancer or employee in Albania.

To declare contributions, an employer needs a tax number and access to DPT e-filing, which normally means its own SHPK. A foreign business without one can hand the employment to an employer of record.

Through Employer of Record Albania, each person you recruit joins our Albanian payroll on a Labour Code contract, and we handle the new-hire declaration before day one, the monthly listëpagesa, payment of both sides’ contributions and the tax, and the leaver declaration at the end. The insurance record builds in the employee’s own name, exactly as it would with any Albanian employer.

Each invoice lists contributions separately from salary. Our own charge sits outside the contribution lines altogether. It starts at €599 a head each month, and what it includes is listed on the pricing page. For a full annual costing of one hire, see employee cost in Albania, and for how the arrangement works day to day, our plain-English EOR guide.

Plan for change each January. The floor follows the minimum wage, and in 2026 the cap rose alongside it. As of late September 2026 the 2027 fiscal package was only a draft under discussion, so check next year’s floor and cap once they are published before you fix salary budgets.

Q01What percentage goes to pension contributions in Albania?+

A.In 2026 social insurance, the scheme that funds pensions and cash benefits, costs employers 15% and employees 9.5% of monthly pay up to ALL 186,416.

Q02Is there a ceiling on Albanian health insurance contributions?+

A.No. Each side pays 1.7% on the whole gross wage. There is a minimum base of ALL 50,000 but no maximum.

Q03Who pays the money to ISSH?+

A.Nobody pays ISSH directly. The employer sends contributions and withheld tax to DPT along with each month’s listëpagesa, and DPT forwards the money to the two funds.

Q04What is the most an employee pays in social insurance each month?+

A.ALL 17,709.52, which is 9.5% of the ALL 186,416 cap. The employer’s maximum is ALL 27,962.40.

Q05Do contributions reduce the income tax an Albanian employee pays?+

A.No. Income tax is calculated on gross pay, so employee contributions are not deducted first.