Employment incentives to be active from 2020 – Jobs for 5,000 people

The state secretary at the Ministry of Finance, Slavica Savicic, announced on RTS that a set of laws on incentives for new employments would go through the parliament procedure in November 2019 and come into effect on January 1, 2020.

According to her, the key measure is in the Law on Personal Income Tax, which envisages certain tax exemptions for employment, but there will be changes in other regulations as well.

– This year, we tried to find an optimal measure to stimulate employment in some way. This primarily pertains to those with university and high school degrees, that is, those who didn’t work this year. The idea is for them to be employed next year, which will bring benefits to employers. The proposition is for the employers to be exempt from 70% of the wage taxes in the first year, 65% in the second one and 60% in the last one. Full exemption from pension and disability insurance taxes is planned for the first year and then at 95% and 85% in the next two – Savicic explains.

She added that the exemptions apply even if the employee moves to another company, whereby the former employer has the right to keep benefiting from the exemptions.

– The initial estimates are that, thanks to these measures, around 5,000 people will be employed, but some analyses show that the number might be higher – Savicic says.

Ministarstvo finansija Republike Srbije

Ministry of Finance

Slavica Savičić

employment incentives

Law on Personal Income Tax

tax exemptions for employment

stimulation of employment

contributions for pension and disability insurance