Employer of Record (EOR) in Albania

Employment Laws and Regulations in Albania

Employment Contracts

All employment relationships in Albania must be documented by a written employment contract. The primary governing statute is the Labour Code (Law No. 7961/1995), as amended, which sets minimum contract requirements. The contract must specify the employee’s name, position, workplace location, job responsibilities, probationary period (if applicable), compensation (gross and any performance-based components), working hours, leave entitlements, and termination terms. Contracts may be concluded for a definite term (fixed-term employment) or indefinite term (permanent employment). Fixed-term contracts may only be used for specific and temporary tasks, and their total duration including any renewal cannot exceed 3 years under the Labour Code. If the employee continues working after the fixed term expires without a new contract, the arrangement automatically converts to an indefinite-term contract. Indefinite contracts continue until either party terminates with proper notice.

Any contract changes (pay, hours, duties) must be written. The EOR prepares amendments for both parties to sign. Verbal changes don’t count and create risk.

Working Hours and Overtime

The standard full-time work week in Albania is 40 hours, distributed as 8 hours per day across 5 working days. Most employers operate Monday through Friday; the weekend consists of Saturday and Sunday. Time worked beyond 40 hours per week constitutes overtime and must be compensated at premium rates. Total overtime is capped at 200 hours per calendar year under Article 91 of the Labour Code. Employees are also entitled to a minimum daily rest of 11 consecutive hours and a weekly rest of 36 consecutive hours under Articles 83 and 86 of the Labour Code.

Employers must track overtime hours accurately and ensure premium payments are reflected in payroll.

Contracts can include flexible or task-based work if both sides agree. Remote work is standard in Albania; just clarify the arrangement (fully remote, hybrid, in-office) and any sync requirements. Work-from-abroad is fine if the role doesn’t need office time.

Minimum Wage

Albania’s monthly minimum wage is ALL 50,000 (approximately $605 USD), effective 1 January 2026. This rate applies to all full-time employees regardless of sector or industry. Part-time employees must be compensated at a pro-rata minimum based on hours worked. The minimum wage is a floor; employers may pay more. Every employment contract must specify compensation at or above this threshold.

The minimum wage increases annually on 1 January based on inflation and economic conditions as determined by government decree. An EOR automatically adjusts compensation schedules to reflect minimum wage increases, ensuring compliance and avoiding wage underpayment penalties.

Probation Period

Employment contracts may include a probation period of up to 3 months. During probation, either the employer or employee may terminate the relationship with 5 days’ notice and without cause. This shorter notice period allows both parties to assess fit before committing to longer-term employment.

They’re optional and work well for technical roles. Just state the period upfront in the contract. Probationary staff get the same minimum wage, overtime, benefits, and legal protections as permanent employees.

Leave Entitlements

Annual Leave

All employees in Albania are entitled to 22 working days of annual paid leave per year under Law No. 91/2024, effective 24 August 2024. This entitlement applies to all employees, regardless of employment type or tenure. Working days are calculated as weekdays excluding public holidays. For a standard 5-day work week, 22 working days equals approximately 4.4 calendar weeks or roughly 30-31 calendar days when holidays are included.

Leave must be scheduled with the employer’s approval. You’re required to let employees take their full allotment each year or carry days forward (unless your policy restricts it). If they leave the company, they get paid for unused leave.

Sick Leave

Sick leave is administered in two phases under the Labour Code. For the first 14 days of absence due to illness per year, the employer pays 80% of the employee’s regular salary. Medical certification is required, typically a doctor’s note or health certificate. Beyond 14 days, the social insurance system assumes responsibility and pays either 70% of salary (standard benefit) or 80% of salary (if the employee has 10 or more years of contributions). The employee must provide medical documentation to claim social insurance benefits.

Sick leave is separate from annual leave and does not reduce annual leave entitlements. Employees should notify their employer as soon as possible when unable to work due to illness, and provide a medical certificate within three days (or as specified by the employer’s policy).

Maternity Leave

Maternity leave totals 365 days, comprised of two phases. During the first 150 days, the employee receives 80% of her regular salary, paid by the Social Insurance Institute (the employer does not directly pay this benefit; the social insurance system covers it). For the remaining 215 days, the employee receives 50% of salary, also paid by social insurance.

The leave must be continuous around the birth and the employee’s job is protected. She returns to the same position or equivalent role afterward.

Paternity Leave

Albania does not have a statutory paternity leave entitlement under the Labour Code. Some employers offer 3 days of voluntary paid leave around the birth as a contractual benefit, but this is not required by law. A 2020 proposed amendment to introduce a statutory 3-day paternity right was not enacted. If the EOR’s employment contract grants paternity leave as a contractual benefit, it should be stated explicitly in the contract.

Other Statutory Leave

Employees are entitled to paid time off for specific life events: 5 days for the employee’s own marriage and 5 days for the death of a spouse, parent, or direct descendant, under Article 96(1) of the Labour Code. These are granted separately from annual leave and sick leave and are intended to address significant personal events. Documentation (marriage certificate or death certificate) is typically required as proof.

Albania observes 13 public holidays per year. Employees don’t work them and get paid the regular rate if the holiday falls on a work day. Work on a holiday? That’s 150% pay.

Statutory Employee Benefits

All employers in Albania must enroll employees in the mandatory social insurance and health insurance systems, which function as statutory benefits independent of internal company benefits programs. Enrollment occurs automatically upon contract signature; the EOR handles registration with the social insurance institute and tax authority.

Social insurance covers old-age pension, disability, and survivor benefits. Both employer and employee contribute to this system. Health insurance provides access to Albania’s public healthcare system and covers medical examinations, hospitalization, prescription medications, and other medical services. The insured employee and dependents (spouse, children) are entitled to healthcare under the public system. Contributions are withheld from the employee’s salary and remitted to the social insurance and health insurance funds by the employer.

Beyond statutory benefits, some employers offer supplementary benefits such as private health insurance, life insurance, professional development allowances, or transportation subsidies. These voluntary benefits are negotiated individually and documented in the employment contract or a separate benefits agreement. They are not required by law but can be valuable recruitment and retention tools, especially for competitive roles.

Recent Regulatory Updates (2026)

The most significant recent change is the adjustment of the minimum wage effective 1 January 2026 to ALL 50,000 per month. This represents the annual minimum wage adjustment. Additionally, Law No. 91/2024 updated annual leave entitlements to 22 working days, effective 24 August 2024, improving employee leave protections.

The Albanian government has signalled ongoing labour law modernization, including potential updates to remote work regulations, digital employment platforms, and non-standard work arrangements. EORs monitor these developments and update practices accordingly. At present, no major legislative changes are imminent, but organizations should remain aware that additional updates may occur throughout 2026.

Work Permits and Visas in Albania

Work Permit Requirements

Who Needs a Work Permit

Non-EEA citizens (US, Canada, Australia, India, etc.) need a work permit. EU/EEA citizens can work freely; they just register locally. Albanian citizens need nothing.

Albanian citizens can work anywhere. EEA citizens just register at the local police directorate.

Eligibility and Required Documents

Non-EEA nationals apply through the Ministry of Interior or state police (the EOR usually handles this). You’ll need a permit application, passport, signed contract, proof of employer registration, credentials, and a medical certificate.

Some countries have bilateral agreements with Albania that speed things up or exempt professions. The EOR will advise on your specific case.

An important consideration: the work permit is issued to the individual employee, not the employer. If an employee changes employers, a new work permit application is typically required. This is a practical reason why EORs are valuable; the EOR holds the formal employer status, so employee mobility within the organization (role changes, internal transfers) does not require permit renewal.

Processing Time and Validity

Processing usually takes 15-30 days, though it can be faster if the credentials are solid or the role is in a priority sector like tech or finance.

Permits last one year and renew easily. The EOR watches the deadline and applies early so there’s no gap. Working past expiration is illegal, so timing matters.

Renewal Process

Renewal starts 30-60 days before expiration. The EOR preps updated documents and submits everything. It usually takes 10-20 days. Major changes to role or pay might slow things down.

Common Visa Types for Foreign Workers

Albania’s 2022 Unique Permit (also called the Single Permit) consolidates work authorization and residence into one application, per Fragomen. Foreign nationals employed by Albanian entities, intracompany transferees, digital nomads working remotely for foreign employers, and self-employed investors all apply through this single track, with processing targeted at 4 to 12 weeks. Nationals of visa-required countries must also obtain a Type D long-stay entry visa before collecting the permit in Albania.

How an EOR Handles Work Permits

An EOR coordinates the entire work permit process on behalf of the employee and the organization. Upon hiring a non-EEA national, the EOR assesses work permit requirements, gathers necessary documents from the employee (passport, medical records, credentials), completes all application forms, and submits the application to the Albanian authorities. The EOR tracks the application status, follows up if additional information is requested, and notifies you and the employee when the permit is granted.

The EOR also advises on visa options and, if necessary, provides documentation (employment contract, proof of sponsorship) to support visa applications at the Albanian embassy or consulate in the employee’s home country. Some organizations arrange visa sponsorship directly, while others ask the EOR to coordinate. The EOR can facilitate either approach.

For more detailed information on work permits and visa requirements, see the full guide to work permits and visas in Albania.

Payroll, Taxes, and Social Security in Albania

Employer Contributions

You must contribute to social insurance and health insurance for every employee. These are percentages of gross salary paid directly to the funds; they don’t reduce employee take-home pay.

The employer contribution rate for social insurance is 15% and for health insurance is 1.7%, totalling 16.7%. These contributions are subject to a monthly ceiling; contributions are calculated on wages up to ALL 186,416 per month (approximately $2,254 USD). Wages above this ceiling are not subject to employer contributions, creating a cost savings for higher-compensation roles. For example, an employee earning ALL 200,000 per month (above the ceiling) triggers contributions only on ALL 186,416, not the full salary.

Employee Contributions

Employees also contribute (deducted from gross salary) under the same monthly ceiling as employers.

The employee contribution rate for social insurance is 9.5% and for health insurance is 1.7%, totalling 11.2%. These deductions reduce the employee’s net take-home pay. For example, an employee with a gross monthly salary of ALL 100,000 (approximately $1,209 USD) has deductions of ALL 11,200, resulting in net pay of ALL 88,800 (approximately $1,073 USD).

Income Tax

Albania imposes a progressive personal income tax (PIT) on employment income. Under Law No. 29/2023 (effective 1 January 2024), monthly salaries are taxed using a notched 4-tier structure. Employees earning up to ALL 50,000 per month pay nothing, while higher earners pay 13% or 23% only on the portion above defined deductions.

Because the brackets are applied monthly, an employee earning ALL 41,350 (about $500 — the salary level used throughout this guide) owes zero income tax, since gross pay falls below the ALL 50,000 exemption. By contrast, an employee earning ALL 100,000 per month (roughly $1,209) would pay 13% × (100,000 − 30,000) = ALL 9,100, or about $110 per month. The EOR withholds the calculated amount from each paycheck and reconciles any difference at year end based on cumulative earnings.

Payroll Cycle

Monthly payroll is standard in Albania, usually on the 25th or 30th. Some do bi-weekly. Most use bank transfer; cash or cheque work if both agree.

The EOR handles payroll on your schedule: calculates gross pay, withholds taxes and contributions, sends employer portions to the right funds, generates payslips, and transfers net pay. Payslips show all earnings, deductions, and take-home; employees keep copies.

Keep payroll records for five years; they’re open to inspection. The EOR maintains them and gives you regular reports on costs, deductions, and government payments.

13th Month Salary and Bonus Pay

A 13th month bonus isn’t required in Albania. Some employers offer it as a holiday gift or performance reward. If you do, document it in the contract and pay it on schedule.

Bonuses are fine and encouraged. They’re taxed like regular salary. A $500 bonus triggers the same tax and contribution withholding as regular pay.

Severance is usually not taxed if it’s per law or policy. Unused leave paid out? That’s taxed like regular income.

Cost of Hiring Through an EOR in Albania

EOR Service Fees

EOR fees range from $300-600/employee/month depending on complexity and support level. Some charge flat fees, others a payroll percentage (5-15%), or a hybrid model. Ask what’s included: payroll, taxes, benefits, HR, recruitment. Check for hidden fees.

Total Employment Cost Breakdown

Total cost includes gross salary, employer contributions (16.7%), and the EOR fee. Budget all three when planning headcount.

Figures converted at 1 USD ≈ 82.7 ALL (April 2026). Monthly USD totals rounded to the nearest dollar.

At $1,200 gross, your total cost is $1,800 (salary + 16.7% insurance + $400 EOR fee). Percentages shift with salary. A $2,500 earner costs closer to 46% above gross because contributions hit the ceiling. Higher earners = lower percentage.

A lower earner at $600/month costs $501, or 83.5% above gross, because the EOR fee stays fixed. This shows why fees hit harder on lower wages. Hiring multiple employees can help you negotiate volume discounts.

Costs are standard across most providers, though fees vary. Some offer tiering for 10+ employees or performance pricing. Always get a detailed breakdown upfront and ask about hidden costs: visa work, recruiting, penalties.

Rapid scaling can lower per-employee costs. Plus, you save on legal and accounting fees you’d spend setting up a subsidiary. You also avoid penalties for employment law violations.

Ready to hire your first employee in Albania? Contact Remote People for a free consultation on EOR services, cost estimates, and hiring timelines. Our team will guide you through the entire process, from role definition to first payroll, ensuring your Albania team is compliant, cost-effective, and productive from day one.

Benefits of Using an EOR in Albania

An EOR skips the bureaucracy of setting up a local entity. No weeks of registration, no local director hire, no office lease. You hire your first employee in days. That matters when you need to move fast.

Your EOR handles all compliance: payroll withholding, the 16.7% employer and 11.2% employee contributions, government filings. This transfers legal risk to them. They know the Labour Code inside and out and update as laws change.

A local entity costs $2,000-5,000 upfront plus $3,000-8,000 yearly for maintenance. An EOR costs $300-600/employee/month, no hidden fees. You skip the local finance hire, office rent, and tax hassles. For teams under 15, the EOR is cheaper and simpler. Employees get statutory leave, security, and local payroll, which boosts retention without adding internal overhead.

Termination and Offboarding in Albania

Notice Periods

Notice periods vary by tenure and contract type. During probation (up to 3 months), either side gives 5 days’ notice. This lets both parties test the fit.

These notice periods apply equally to resignations and employer-initiated no-cause terminations. Just-cause terminations (documented misconduct, serious breach) can bypass notice requirements.

Severance Pay

Albania mandates severance for employees with 3 or more years of continuous service, calculated at 0.5 months of salary per full year, based on the average gross salary of the last 3 months. The formula is set out in Articles 145–146 of the Albanian Labour Code (WIPO Lex). The worked examples below use the $500/month average salary assumed throughout this guide.

Calculation Method

Severance applies after 3+ continuous years: 15 days’ salary per year of service, based on the last 3 months’ average pay. A 5-year employee earning $500/month averages gets $1,250.

Caps and Exceptions

No severance for: just-cause terminations, resignations, fixed-term contract expiry, or probationary periods.

Wrongful termination (retaliation, discrimination, rights violations) can lead to damages of up to 12 months’ wages instead of severance. Document everything and follow procedures. Your EOR ensures legal compliance.

Grounds for Termination

You can terminate for cause (performance, rule violations) or no cause (restructuring), with proper notice. Cause terminations need documentation. No-cause terminations follow the notice periods and may trigger severance.

Termination for discrimination (age, gender, race, religion, disability, pregnancy, union activity) is illegal. Retaliation for reporting safety violations is also unlawful. Work with your EOR to document everything and stay protected.

For indefinite-term contracts, Albanian law requires a specific termination procedure. The employer must first send a written meeting invitation at least 72 hours in advance; hold the meeting to discuss the reasons for termination; and then issue the written termination notice no sooner than 48 hours after the meeting. Skipping any of these steps can expose the employer to a wrongful dismissal claim of up to 12 months’ salary under the Labour Code.

EOR vs. Other Hiring Models in Albania

EOR vs. Setting Up a Local Entity

Choosing between an Employer of Record and setting up a local legal entity in Albania comes down to timeline, cost, and how long you plan to employ people there. The table below compares both approaches across setup time, upfront cost, ongoing administrative burden, compliance risk, and how quickly you can wind operations down if needed.

An EOR gets your first hire live in 1-2 weeks for zero setup cost; a local entity takes 2-4 months and $2,000-5,000. The trade: monthly fees ($300-600/employee) versus annual maintenance ($3,000-8,000 for your own entity). The math favors EOR.

The EOR model works for testing markets, scaling gradually, or dodging the admin of entity ownership. You get all the operational benefits (payroll, tax, benefits) without the legal burden. Perfect if headcount bounces or you plan a short-term entry.

Switch to a local entity when you hit 15+ employees or need government contracts. Albania restricts public work to registered locals. You get more control over hiring and culture, but you inherit complexity, legal liability, and exit headaches like dissolution and remaining leases.

The choice comes down to team size, how long you’ll stay, and what contracts you need. For early entry and small distributed teams, EOR wins on speed, cost, and flexibility. At 15+ employees, a local entity starts making financial sense.

EOR vs. Hiring Independent Contractors

Misclassifying a full-time worker as an independent contractor in Albania can trigger back taxes, unpaid social contributions, and reclassification penalties from local labour authorities. The table below contrasts EOR employment with contractor engagement across tax treatment, benefits eligibility, intellectual-property ownership, and misclassification exposure so you can pick the right model for each role.

Employees get statutory protections; contractors don’t. Contractor rates look higher upfront, but when you add EOR fees, contributions, and benefits, they often cost about the same.

The legal difference matters. Employees get statutory protections: minimum wage, paid leave, social security, notice, severance. Contractors get none of that; they’re self-employed under a commercial contract.

Use contractors for short projects: marketing audits, dev sprints, compliance reviews, translations. They cost more per hour (they cover their own taxes and benefits), but no payroll obligations, notice periods, or severance when done.

Misclassification risk arises when work that resembles full-time employment (regular schedule, ongoing management, integration into your team, reliance on your tools and systems) is incorrectly labeled as contractor work. Albanian labor authorities may reclassify such arrangements as employment and assess back payroll taxes, social contributions, and penalties. The safest approach is to use contractors for genuinely short-term, specialized, project-based work and to use the EOR model for recurring, managed roles. Remote People offers dedicated contractor solutions for organizations that need both models, with clear contractual and operational frameworks to minimize misclassification exposure.

EOR vs. PEO

EORs and PEOs both simplify international hiring, but only an EOR acts as the legal employer of record in Albania — a critical difference when you don’t have a local entity. The table below maps the practical distinctions across legal employer status, entity requirements, liability allocation, and scope of coverage.

Here’s the key difference: with an EOR, the provider is the legal employer from day one. With a PEO, you stay the legal employer and they help manage HR. EOR is for market entry; PEO works once you have an entity but want HR outsourcing. EOR takes 1-2 weeks and full liability; PEO requires you already have a local entity and shares liability.

Both provide outsourced HR, but the structure differs. EOR: the provider is your legal employer. PEO: you stay the employer and they assist. The difference matters for liability, control, and setup.

PEOs suit companies that already have a local entity and want to offload HR while keeping control. You decide hiring and pay; they handle compliance. But you share liability if things go wrong. PEOs are rare in small markets like Albania; most providers focus on big economies.

EOR is the practical choice for market entry and early scaling. You skip the setup delay and cost, and the EOR takes full compliance liability. When you’re ready for more control or government contracts, migrate to your own entity with PEO support. Remote People’s EOR solution is built for this path.

Public Holidays in Albania

Albania observes a set of official public holidays on which most private-sector employers must give staff a paid day off (timeanddate.com). The table below lists the statutory holidays employers need to build into payroll and leave calendars, along with the date rule for each.

Albania has 13 public holidays in 2026, mixing national celebrations with religious observances. Employees get paid leave or premium pay (150%) if they work. Weekend holidays often get a compensatory weekday. Your EOR tracks it all.

How to Get Started with an EOR in Albania

• First, define your role. Specify the position, start date, skills, and salary range. This helps your EOR assess feasibility and timeline.
• Second, pick an EOR with real Albania experience. Check they are registered with the Tax Authority, know employment law, and have transparent pricing. Ask for references.
• Third, complete onboarding. You provide company info, bank details, and hire details. The EOR registers with tax authorities and social insurance.
• Fourth, finalize the contract. Your EOR drafts it per the Labour Code, covering salary, role, benefits, probation, and notice periods. Both sides sign before start date.
• Fifth, start payroll. The EOR sets up records, calculates withholdings and 16.7% contributions, processes first payment, and sends you reports. You manage the employee; they handle compliance.

You’re up and running in 1-2 weeks from contract to first pay. The EOR handles every government filing and regulatory step. Ready to get started? Contact Remote People. We’ll walk through your timeline, team size, and strategy.

Where companies hiring in Albania expand next

Teams hiring in Albania commonly expand across Central and Eastern Europe, where competitive labor costs and EU market access anchor regional growth. After building a team in Albania, employers often look to operations in Poland for aligned compensation ranges and delivery speed, then the Czech Republic for matching cost-to-quality tier. Hiring in Romania follows with similar cost profile and comparable hiring speed, and an EOR partner in Hungary typically closes the regional footprint via parallel labor-cost tier and talent supply.