Good to know
The Albanian economy relies on various sectors, including agriculture, manufacturing, services, and tourism. The service sector has been growing and is a significant source of employment.
Are you ready to hire in Albania?
Albania offers a competitive labour market with relatively lower labour costs compared to many Western European countries. This can lead to significant cost savings for your business, especially for roles that can be performed remotely. They also have a well-educated and skilled workforce. Many Albanians are fluent in multiple languages, making them valuable assets in international business, customer support, and outsourcing roles.
The country offers a good quality of life with a pleasant Mediterranean climate, beautiful landscapes, and a relatively low cost of living. This can be appealing to potential employees relocating to the country.
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The minimum wage is 34,000 Albanian Lek (ALL) to 40,000 ALL.
Standard Working Hours
According to Albanian law, adult employee’s standard working hours are 40 hours per week and 8 hours per day. However, if an employee is under 18, the maximum daily hours reduce to 6. The standard working week is Monday – Friday.
Any work exceeding the standard 40 hours should be compensated at a minimum rate of 25% more than the regular pay. Collective agreements and contracts govern overtime regulations, but the Albanian Labor Code specifies that an employee cannot work more than 200 hours of overtime in a single year. On weekends or public holidays, the minimum rate increases to 50% more. Furthermore, Instead of payments, overtime can be compensated with time off.
In Albania, the payroll cycle is monthly. Employees are paid by the last working day of each month.
Paid time off
Employees are entitled to 20 working days of paid leave after completing 1 year of service. This leave must be taken either within the working year or within the initial 3 months of the subsequent year.
Employers have the option to request sick leave throughout the entirety of their illness, pending confirmation from their medical practitioner regarding their fitness to resume work. Throughout the initial 14 days of sick leave, the employer is obligated to provide 80% of the employee’s salary. Starting from the 15th day onward, social insurance takes over, providing the employee with compensation amounting to 70% of their average salary from the preceding 6 months.
Pregnant women with a continuous service of 12 months are eligible for a maximum of one year’s paid maternity leave. This typically consists of 35 days of paid leave prior to childbirth and 63 days post-delivery.
Following this initial 63-day period, the employee has the option to continue the leave or resume work. In cases of multiple births, women are entitled to a total of 390 days of maternity leave.
There is currently no paternity leave in Albania. In October 2020, an amendment was proposed to the Albanian Labor Code and Social Security Law (96.3) to allow fathers to have three days of paid paternity leave. However, the implementation of this amendment and its specifics could have varied based on the legislative process and subsequent regulations.
Termination of Employment
In Albania, termination of employment is governed by the Labour Code. Employers can terminate contracts based on valid reasons such as employee misconduct, inadequate performance, or economic difficulties. Notice periods vary depending on the length of service, ranging from 15 to 60 days. Severance pay might be required for employees with over a year of service if the termination isn’t due to employee fault.
In Albania, employees can terminate contracts by giving notice, ranging from 30 to 60 days based on the duration of employment. During the probation period, only a 5 day notice period is required to the employer.
In Albania, probation periods typically last for 3 months, during which either the employer or employee can terminate the employment with a notice period of 5 days.
To enter Albania, all foreign visitors are required to obtain a visa, and if they wish to reside there, a residence permit is necessary.
Foreigners aiming to work in Albania may need specific types of employment permits based on their citizenship and the nature of their intended work. These permits include a) work registration certificate, applicable for certain listed activities lasting up to 60 or 90 days; b) employment declarations; and c) work permit, essential for those intending to work and stay in Albania for more than 90 days within a 180-day period. The application for a work permit is lodged with the Migration Directorate of the National Employment Service. Typically, the permit is granted within a period of ten days following the submission by the applicant. Albania’s work permit system comprises four primary categories: Type A, which covers economic activities for employers and employees; Type B, for independent economic activities; Type C, meant for special occasions; and Type D, designed for eligible foreign nationals seeking permanent work permits. Longer periods of stay and permanent stay may be granted but this is only through the provision of a residence permit.
The standard rate of VAT in Albania is 20.00%.