Gross vs Net Salary in Albania: How Contributions and Payroll Tax Are Calculated

Employees talk about take-home pay, the contract shows gross pay, and the business pays more than both. This article explains the net salary calculation in Albania from gross pay under the 2026 rules, with a step-by-step example.

What gross salary includes

Gross salary is the contract salary before any deductions, plus anything paid through payroll: overtime, bonuses or a thirteenth salary. The 2026 gross minimum wage is ALL 50,000 a month for full-time employees.

How contributions and tax work

1. Employee contributions

• 9.5% social insurance on gross pay up to the maximum contribution base (ALL 220,520 in 2026);
• 1.7% health insurance on the full gross salary.

2. Payroll tax

Under Law No. 29/2023, a personal tax-free amount is deducted from gross pay:

• salary up to ALL 50,000: ALL 50,000 deducted (so no tax);
• salary from ALL 50,001 to 60,000: ALL 35,000 deducted;
• salary above ALL 60,000: ALL 30,000 deducted.

The remaining base is taxed at 13% up to ALL 170,000 and 23% above that. In practice, 23% starts for gross salaries above ALL 200,000. Contributions are not deducted from the tax base.

3. Employer contributions

These don’t affect net pay but they do affect the business’s cost: 15% social insurance (up to the cap) and 1.7% health insurance.

Example: gross salary ALL 80,000

Gross salary	ALL 80,000
Employee social insurance (9.5%)	−ALL 7,600
Employee health insurance (1.7%)	−ALL 1,360
Tax base: 80,000 − 30,000	ALL 50,000
Payroll tax (13% × 50,000)	−ALL 6,500
Net salary	ALL 64,540
Employer contributions (15% + 1.7%)	ALL 13,360
Total cost to the business	ALL 93,360

Try any other amount with our gross-to-net salary calculator.

Why payroll needs a monthly check

Payroll is filed, and tax and contributions are paid, every month, no later than the 20th of the following month. Pay rises, new hires, leavers, unpaid leave and overtime all change the figures. A monthly check avoids differences that later get corrected with penalties and late-payment interest.

Changes on the way

The 2027 fiscal package proposes that the 23% rate start above ALL 300,000 gross and a new 32% rate above ALL 700,000. These are still proposals. Read Albania’s 2027 fiscal package.

Mistakes to avoid

• Agreeing a “net” salary without converting it to gross in the contract.
• Using old tables after the minimum wage or contribution cap changes.
• Paying bonuses outside payroll.

FAQ

Are contributions deducted from the tax base?

No. Under current rules, tax is calculated on gross pay minus the personal deduction, not minus contributions.

Why does net pay change when gross pay stays the same?

Usually because the minimum wage, the contribution cap or the tax table changed on 1 January.

Leave payroll in safe hands

Abacus prepares payroll, payslips and monthly returns. Contact us or explore our payroll services.

This article is for general information and is not a substitute for professional advice on your situation. Sources: Income Tax Law No. 29/2023 (Articles 22, 24, 65); VKM No. 776/2025; VKM No. 77/2015; Law No. 7703/1993 (Article 10).