Albania: New minimum salary and changes in employment income taxation

Minimum salary amended and a new taxation method for employment income adopted

Minimum salary amended and a new taxation method for employment income adopted

The Albanian government has amended the national-level minimum salary and adopted a new taxation method for employment income.

The amendments are effective from 1 April 2022, and were published in Official Gazette No. 40 (dated 14 March 2022).

New minimum salary

The minimum monthly salary at the national level will increase to ALL 32,000 (from current ALL 30,000). This increase of the minimum salary automatically indexes the annual maximum salary for purposes of calculating the mandatory social security contributions. Thus, the new annual maximum salary levels will increase to ALL 141,132 (from current ALL 132,312).

The rates applicable for the computation of the monthly mandatory social security (employer: 15%; employee: 9.5%) and health insurance (employer: 1.7%; employee: 1.7%) remain unchanged.

Individual (personal) income tax on employment income

The taxation of employment income in Albania will change by introducing new levels of non-taxable salary and adding more taxable layers.

The new taxation method for employment income was planned to become effective in July 2022, but the government advanced its application to 1 April 2022.

Read an April 2022 report prepared by the KPMG member firm in Albania

 

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