What Does an Employee Really Cost a Business in Albania?

When you plan a hire, the number that matters isn’t the net pay the employee takes home, but the total cost of an employee in Albania for your business. This article shows what it’s made of, with worked examples under the rules in force for 2026.

Net and gross pay are not the same

• Gross salary is the amount in the contract, before deductions.
• Net salary is what the employee receives after their contributions (9.5% social and 1.7% health insurance) and payroll tax are withheld.
• Employer cost is gross salary plus employer contributions.

For a step-by-step calculation, read Gross vs net salary in Albania.

Budget for employer contributions

On top of gross salary, the employer pays:

• 15% social insurance, up to the maximum contribution base (ALL 220,520 a month in 2026);
• 1.7% health insurance on the full gross salary.

So for salaries up to the cap, employer cost is about 116.7% of gross salary. The 2026 minimum wage is ALL 50,000 gross a month.

Examples for 2026

Gross salary	Employee net pay	Employer contributions	Total monthly cost
ALL 50,000	ALL 44,400	ALL 8,350	ALL 58,350
ALL 80,000	ALL 64,540	ALL 13,360	ALL 93,360
ALL 150,000	ALL 117,600	ALL 25,050	ALL 175,050

Work out any other amount with our salary calculator.

Costs that are often forgotten

• Paid annual leave: at least 22 working days a year under the Labour Code. You pay salary during leave without getting work.
• Overtime: paid at a premium, and capped at 200 hours a year.
• Equipment and workspace: computer, phone, uniform, software.
• Training and ramp-up time in the first months.
• Promised extras such as a thirteenth salary or bonuses: they are part of gross pay and carry contributions and tax.

Calculate cost by month and by role

A good staff budget shows, for each role, gross pay, contributions, extra costs and the revenue or work that role brings. That tells you whether, and when, a new hire pays for itself.

Changes on the way

The 2027 fiscal package proposes changes to the payroll tax table. The proposals have not been adopted yet. Read Albania’s 2027 fiscal package; we’ll update this article when changes take effect.

Mistakes to avoid

• Negotiating a “net” salary without knowing the gross cost and contributions it brings.
• Paying part of the salary off payroll. This brings penalties and leaves the employee unprotected.
• Forgetting the minimum and maximum contribution bases when calculating.

FAQ

Are contributions due on bonuses?

Yes. Bonuses paid through payroll are part of gross salary and treated the same way.

Does a part-time employee cost less?

Cost follows gross salary, but there are specific rules on the minimum contribution base. Check your case with your accountant.

Plan your staffing with Abacus

We run payroll, file the returns and help build your staff budget. Contact us or explore our payroll and accounting services.

This article is for general information and is not a substitute for professional advice on your situation. Sources: VKM No. 776/2025 (minimum wage); VKM No. 77/2015; Law No. 7703/1993 on Social Insurance (Article 10); Income Tax Law No. 29/2023 (Articles 22, 24); Labour Code (Articles 90, 92).