Kosovo, officially known as the Republic of Kosovo, is a country in Southeast Europe, bordered by Albania, Montenegro, Serbia, and North Macedonia. The workforce in Kosovo is made up of approximately 1 million people (2024), and the GDP is 11.27 billion US dollars (2025).

Many employers are choosing Kosovo when hiring abroad, as it offers competitively priced labor in comparison with the rest of Europe, particularly in the tech and software development industries. Kosovo also offers tax breaks and low corporate tax rates to attract businesses, and its economy has seen consistent growth in the last few decades.

This guide will provide employers with the information they need to familiarize themselves with employee benefits in Kosovo, including overtime compensation, leave entitlements, and severance pay. We’ll explain Kosovo labor laws and relevant legislation, plus how Remote People can assist companies in improving hiring in Kosovo.

Kosovo Employment Laws

The main legislation that provides details on Kosovo labor law is the Labor Law of the Republic of Kosovo, Law No. 03/L-212.

This act was adopted in 2010 and has been amended as recently as 2023. It explains a range of elements related to Kosovo labor law, including working hours, annual leave, public holidays, and sick leave.

Other acts that are relevant to employment practices include:

  • Law on Labour Inspectorate (No. 2002/9)
  • Law on Health and Safety at Work (No. 2003/19)
  • Law on Pensions (No. 04/L-131)
  • Law on Vocational Education and Training
  • Law on Trade Unions (In draft, pending)

When putting together employee contracts for workers in Kosovo, it’s important to consult legal experts for detailed compliance. This ensures that your employment practices comply with the most recent legislation set by labor laws and simplify the process of hiring in Kosovo.

Mandatory Employee Benefits in Kosovo

There is a range of mandatory employee benefits that companies operating in Kosovo must abide by. We’ve detailed some of these in the sections below:

Social Security Contributions

Kosovo operates under a Social Security System, which is designed to offer workers health insurance, disability benefits, social assistance, and access to an old-age pension.

This is overseen by the Ministry of Finance, Labor, and Transfers, as well as the Kosovo Pension Savings Trust, the Employment Agency of the Republic of Kosovo, and local Social Work Centers.

Both employees and employers are responsible for contributing to social security as per the following rates:

ContributorRate
Employers5%
Employees5%

Annual Paid Leave

Employees in Kosovo are entitled to at least 4 weeks or 20 working days of annual leave per year. Most companies also provide an extra working day of leave for every 5 consecutive years of service with the same employer.

It is the responsibility of the employer to schedule annual leave; however, they must consider the employee’s preferences when doing so. If employees request leave, they must provide 15 days of notice to their employer.

Working Hours

Unless otherwise specified, working hours in Kosovo are 40 hours per week split across 5 8-hour work days. 

Employees must receive a daily break of at least 30 minutes, and a minimum of 1 uninterrupted rest period of 24 hours per week.

Hours worked at night must incur a wage supplement of at least 30%.

Overtime Pay

Overtime is only permitted in Kosovo under exceptional circumstances, such as a spontaneous increase in company workload.

Overtime must be paid at a rate of 130% of an employee’s normal wage, with overtime carried out on public holidays or weekends incurring an increased rate of 150%.

There is a weekly limit on overtime of 8 hours.

Public Holiday Leave

There are various public holidays celebrated in Kosovo that provide employees with a paid day off. The public holidays in Kosovo are as follows:

  • New Year’s Day (1 January)
  • Second Day of the New Year (2 January)
  • Christmas Day (7 January)
  • Independence Day of the Republic of Kosovo (17 February)
  • Eid al-Fitr (30 March) (date varies)
  • Constitution Day of the Republic of Kosovo (9 April)
  • Easter (Catholic & Orthodox) (20 April) (date varies)
  • Easter Monday (Catholic & Orthodox) (21 April) (date varies)
  • International Labour Day (1 May)
  • Europe Day (9 May)
  • Kurban Bayrami (Eid al-Adha) (6 June) (date varies)
  • Christmas Day (25 December)

Sick Leave

Workers in Kosovo are entitled to 20 days of paid sick leave per year if they are too unwell to attend work.

Employers are responsible for paying employees in full during sick leave. If an employee is sick for more than 3 days, the employer can request a certified medical certificate.

Up to 90 days of sick leave is provided to workers who have experienced a workplace injury, receiving up to 70% of their salary after the first 10 days.

Unpaid sick leave may be provided for longer periods of absence, but this must be mutually agreed upon with an employer.

Maternity Leave

Mothers in Kosovo may take 12 months of maternity leave if they have a baby. This is payable as follows:

Period Payment Source Salary Coverage
First 6 months Employer 70% of normal salary
Next 3 months Government 50% of normal salary
Final 3 months Unpaid 0%

Employees may commence maternity leave up to 45 days before the expected delivery date, and employers may request that workers start maternity leave up to 28 days before birth if they deem work duties to be unsuitable in the late stages of pregnancy.

Paternity Leave

Fathers in Kosovo are entitled to 10 days of paid paternity leave, which is funded in full by the employer.

They are also entitled to take 2 weeks of unpaid leave to care for their child, which must be taken before the child’s third birthday.

Paternity leave is a legal right; however, employees must seek approval from their employer with fair notice.

Severance Pay

There is no statutory right to severance pay for individual dismissals in Kosovo.

However, employers are responsible for paying severance to workers with indefinite contracts that have been collectively dismissed. This is calculated as follows:

Years of Service Severance Pay
2 – 4 years 1 month’s salary
5 – 9 years 2 months’ salary
10 – 19 years 3 months’ salary
20 – 29 years 6 months’ salary
30+ years 7 months’ salary

Pensions

The pension system in Kosovo is a multi-pillar system comprised of a non-contributory basic pension, a mandatory contributory scheme, and voluntary private pensions.

The basic pension provides retirement income to all legal residents over 65 who won’t receive a contributory/privileged pension, and is funded by the state budget.

The contributory schemes are for all formally employed workers since 2002, and require 5% contributions from both employers and employees each month.

Voluntary private pensions are designed for people looking to make additional contributions to their pensions.

Supplementary Employee Benefits in Kosovo

It’s advised that companies offer employees supplementary benefits to improve employee retention and increase job applications when hiring for new roles. A few examples of supplementary benefits include:

  • Performance bonuses
  • Flexible working hours
  • Company car
  • Transport, housing, or food allowances
  • Enhanced leave entitlement
  • Advanced training schemes

Optimize Employee Benefits with Remote People

There is a range of services Remote People can provide to make hiring in Kosovo an easier process.

Our Employer of Record (EOR) services take on the legal responsibility of hiring workers in Kosovo—ensuring full compliance with local labor laws and that employees receive all entitled benefits. This helps reduce the administrative burden on your business, allowing you to focus on other key areas of operations.

We have a range of recruitment services that can help with direct hiring in Kosovo, from hiring contractors to setting up employment contracts. Our team is highly experienced in the Kosovo recruitment market, understanding the local language/culture and knowing the best places to advertise job openings.

Our PEO services may also be of interest to you if you need to outsource HR, payroll, or compliance tasks. Instruct our team, and they’ll connect you with a qualified PEO that can ensure smooth employee management at every stage of the hiring process.