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Global HR Compliance in Albania via Employer of Record (EOR)

Expanding into Albania or hiring local talent requires strict compliance with the country’s labour, tax, and social security regulations. Employers must meet requirements on contracts, payroll, and statutory benefits, whether engaging local hires or relocating expatriates.

In some countries, the term Professional Employer Organisation (PEO) is used to describe a provider that manages HR and payroll for employees of an existing local entity. In Albania, and in most cross-border hiring situations, the correct model is the Global Employer of Record (EOR). This allows you to hire staff in Albania without setting up a local company, while the EOR acts as the legal employer and ensures full compliance with Albanian labour, tax, and social security laws.

Acumen International delivers compliant EOR hiring in 190+ countries, including Albania, enabling you to:

Hiring in Albania through a Global Employer of Record ensures that every stage of the employment relationship meets legal and regulatory requirements.

The EOR becomes the legal employer, while you manage the employee’s day-to-day work and performance.

This model is commonly used when:

  • Entering the Albanian market without establishing a legal entity;
  • Hiring local professionals or relocating expatriates for permanent or project-based roles;
  • Managing interim staff while a local company is being formed;
  • Testing the market before making long-term commitments;
  • Avoiding the risk of worker misclassification or permanent establishment;

Through Acumen International’s EOR service in Albania, employers gain:

  • Drafting and execution of Albanian-compliant employment contracts;
  • Registration of employees with tax, social insurance, and health insurance authorities;
  • Monthly payroll processing and statutory contributions;
  • Administration of employee benefits in line with Albanian labour law;
  • Immigration support for expatriates, linked directly to compliant in-country employment;
  • Lawful termination and offboarding procedures when the assignment ends.

This approach removes the need to coordinate multiple local providers for payroll, legal compliance, and HR administration, ensuring a single point of accountability for your workforce in Albania.

Core Employment Compliance in Albania

Albania’s Labour Code and tax regulations set clear obligations for employers hiring local staff or expatriates. These rules cover contracts, payroll, benefits, working conditions, and termination, and apply equally whether employment is direct or through a Global Employer of Record.

Employment Contracts and Probation

All employment relationships must be formalised in a written contract. The contract must state the employee’s job title, duties, salary, benefits, working hours, leave entitlements, and termination provisions.

  • Types of contracts: indefinite-term (default), fixed-term (permitted only for temporary roles and must be justified), part-time, and special formats such as home-based or commercial agent agreements.
  • Probation: up to three months for both fixed- and indefinite-term contracts; termination during probation requires at least five days’ written notice.

Working Hours and Overtime

The standard workweek is 40 hours, with a maximum of eight hours per day. Employees must have at least 11 consecutive hours of rest in each 24-hour period and a weekly rest of at least 24 consecutive hours. Overtime is allowed with employee consent and must be paid at a premium rate or compensated with time off in lieu.

Leave Entitlements

  • Annual leave: minimum of four working weeks of paid leave per year.
  • Public holidays: 12 days annually, in addition to annual leave.
  • Maternity leave: 365 calendar days (extended to 390 days for multiple births), including at least 35 days before and 63 days after childbirth.
  • Paternity leave: up to three days, paid.
  • Sick leave: first 14 days paid by the employer, thereafter covered by social insurance.

Payroll, Tax, and Social Security Contributions

Salaries must be paid in Albanian Lek (ALL) unless otherwise agreed in writing. Employers are responsible for withholding personal income tax and social contributions, and for remitting them to the authorities monthly.

  • Employer contributions: 15 % social insurance + 1.7 % health insurance = 16.7 % of gross salary.
  • Employee contributions: 9.5 % social insurance + 1.7 % health insurance = 11.2 % of gross salary.
  • Personal income tax rates:
    • Up to ALL 50,000/month – 0 %
    • ALL 50,001–200,000 – 13 % on the amount over ALL 50,000
    • Above ALL 200,000 – 23 % on the amount over ALL 200,000

Contributions are subject to monthly minimum and maximum thresholds set by the government.

Termination and Notice Periods

Termination must comply with statutory notice periods unless dismissal is for cause:

  • Up to 6 months of service – 2 weeks
  • 6 months to 2 years – 1 month
  • 2 to 5 years – 2 months
  • More than 5 years – 3 months

Employees dismissed without just cause after at least three years of service are entitled to severance pay of at least 15 days’ salary per year of service. Compensation for unfair dismissal may reach up to 12 months’ salary.

Compliance Implications for Employers

An EOR in Albania ensures all contracts meet Labour Code standards, payroll is processed in compliance with tax and social security rules, and statutory benefits and notice obligations are fulfilled. This protects employers from fines, legal claims, and reputational risk, while providing employees with all entitlements under Albanian law.

Employment Contract Types in Albania

The Albanian Labour Code recognises several forms of employment contracts, each with specific rules on duration, scope of work, and termination. All must be in writing and registered with the appropriate authorities.

Indefinite-Term Contracts

This is the default and most common form of employment in Albania.

  • No pre-determined end date; continues until terminated by either party in line with statutory notice requirements.
  • Recommended for ongoing roles where the business expects a continuing need for the position.
  • Offers the highest level of job security for employees, which can strengthen retention.

Fixed-Term Contracts

Used for temporary roles and must be objectively justified by the nature of the work.

  • Automatically expires at the end date stated in the contract.
  • If the employee continues working after expiry without renewal, the contract is deemed indefinite.
  • Repeated renewals without valid justification risk reclassification as indefinite.
  • Not permitted for work that is permanent in nature.

Part-Time Contracts

Employees agree to work fewer hours than the standard 40-hour week.

  • Must specify hours, days, and any variable work schedule.
  • Entitlements (leave, benefits, bonuses) are granted on a pro-rata basis.
  • EOR providers must ensure contributions and taxes are calculated proportionally but in line with minimum thresholds.

Home-Based Work Agreements

Employees perform their duties from home or another agreed location.

  • Entitled to the same rights and benefits as on-site employees.
  • The employer may be required to cover certain work-related costs, such as utilities or equipment, if agreed in the contract.
  • Health and safety obligations still apply, even for remote work setups.

Commercial Agent Agreements (as Employment Contracts)

In certain cases, commercial agents can be classified as employees under Albanian law.

  • Applies when the agent works under the employer’s instructions and on their behalf, rather than operating independently.
  • These employees are entitled to all statutory rights, including paid leave and social insurance contributions.
  • Misclassification as an independent agent when employment conditions exist can lead to back payments and penalties.

Compliance Risks and How EOR Mitigates Them

Hiring in Albania without a full understanding of the Labour Code, tax rules, and social security obligations exposes employers to legal, financial, and reputational risks. Common pitfalls include:

Worker Misclassification

Engaging an individual as an independent contractor or commercial agent when the working arrangement meets the definition of employment can trigger back payment of wages, benefits, and social contributions, along with fines.
EOR mitigation: All hires are engaged under Albanian-compliant employment contracts, removing misclassification risk.

Payroll and Tax Non-Compliance

Errors in calculating income tax, social contributions, or benefit entitlements can result in penalties, interest charges, and potential audits.
EOR mitigation: Payroll is processed in line with Albanian tax and social security law, with accurate withholdings, remittances, and reporting to authorities.

Breach of Statutory Benefits

Failure to provide the minimum leave, public holidays, maternity/paternity entitlements, or sick pay required by law can lead to legal claims and compensation orders.
EOR mitigation: All statutory benefits are built into employment agreements and administered consistently.

Termination Disputes

Unlawful dismissal or failure to meet notice and severance obligations can result in awards of up to 12 months’ salary.
EOR mitigation: Terminations are managed in strict accordance with Labour Code provisions, with correct notice, cause assessment, and severance calculations.

Permanent Establishment Risk

Employing staff directly in Albania without a legal entity can create a taxable presence under corporate law.
EOR mitigation: The EOR is the legal employer in Albania, preventing direct corporate tax exposure related to employment.

By using Acumen International’s EOR service in Albania, employers maintain operational control of their workforce while we assume full responsibility for local HR compliance. This ensures employees receive all statutory protections, while the employer avoids the cost, complexity, and risk of managing these requirements directly.

Why Partner with Acumen International for HR Compliance in Albania

Managing HR compliance in Albania requires both up-to-date legal knowledge and the operational capacity to apply it correctly across every stage of employment. Acumen International combines this expertise with the ability to hire and manage staff on your behalf through our Global Employer of Record service.

When you partner with us, you benefit from:

  • Single point of accountability – Employment contracts, payroll, benefits, tax reporting, and terminations are all handled under one provider, ensuring consistency and legal compliance.
  • Full compliance coverage – Every hire is engaged in accordance with Albanian labour, tax, and social security law, reducing your legal exposure.
  • Speed to market – Hire employees in Albania without the delay and cost of establishing a local legal entity.
  • Support for local and expatriate staff – Immigration and work permit services integrated with compliant employment, ensuring both local hires and foreign nationals can start work quickly and legally.
  • Scalability – Expand or reduce your Albanian workforce in line with business needs while remaining compliant.
  • Global reach, local expertise – Access consistent service across 190+ countries while benefiting from the knowledge of in-country experts in Albanian employment law.

By entrusting HR compliance to Acumen International, you avoid the risks of fragmented service delivery and ensure that your Albanian workforce is engaged and managed to the highest legal and operational standards.

Global Payroll Calculator – Albania

Accurately forecasting employment costs is critical when hiring in a new market. Albania’s progressive income tax system, capped social security contributions, and statutory benefit entitlements can significantly impact your total cost of hire.

Acumen International’s Global Payroll Calculator gives you precise, real-time cost breakdowns for employing staff in Albania, including:

  • Gross-to-net and net-to-gross salary calculations;
  • Employer and employee social security and health contributions;
  • Personal income tax deductions based on Albanian tax brackets;
  • Statutory benefits and allowances;
  • Total monthly and annual employer cost-of-hire;

The calculator is updated with the latest Albanian tax rates, contribution thresholds, and legislative changes, allowing you to:

  • Compare costs across multiple countries;
  • Plan budgets for both local hires and expatriates;
  • Evaluate the cost impact of different salary levels or benefits packages;
  • Make informed hiring decisions before committing to the market.

When combined with our Global Employer of Record service, the Payroll Calculator helps ensure your Albania hiring plans are financially sound, fully compliant, and aligned with your wider global workforce strategy.

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