Salary Calculation & IOPPD in Montenegro
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Step-by-step guide to monthly payroll calculation in Montenegro. Gross-to-net with pension 10%, no health contribution, municipal surtax, IOPPD return.
Key facts
- Income tax: 0% up to €700, 9% from €700–1,000, 15% above €1,000 gross.
- Employee contributions: pension 10% + unemployment 0.5% = 10.5% of gross.
- IOPPD return: filed electronically with the Tax Administration by the 15th.
- Surtax (10–15% depending on municipality) is paid by the employer, not the employee.
Procedure
Gross salary is the contractually agreed amount. This includes all salary supplements (overtime, night work, holiday work) if applicable.
Deducted from the gross salary: pension (PIO) 10% and unemployment 0.5%, totalling 10.5%. Health contribution was abolished in January 2022 and is funded from the budget.
Tax base = gross salary - employee contributions - personal allowance (€700). If the result is negative or zero, the tax is €0.
Since 2022 ("Europe Now") the progressive rates apply directly to GROSS salary: up to €700 — 0%, €700 to €1,000 — 9%, above €1,000 — 15%. Example for €1,500 gross: tax = €27 (9% on the €300 between €700 and €1,000) + €75 (15% on the €500 above €1,000) = €102.
The surtax is applied to the tax and is paid by the employer (NOT withheld from the net): Budva 10%, Bar and most municipalities 13%, Podgorica and Cetinje 15%. Example: tax €102 × 15% (PG) = €15.30.
Net salary = gross − employee contributions − tax (no surtax deduction). The employer additionally pays: unemployment 0.5%, Labour Fund 0.2%, PKCG 0.27%, SSSCG 0.2% and the municipal surtax.
Example (gross €1,500, Podgorica): employee contributions €157.50, tax €102 → net €1,240.50. Surtax €15.30, employer contributions (NEZ+Fund+PKCG+SSSCG) €17.55 → total employer cost €1,532.85.
The IOPPD is submitted electronically to the Tax Administration by the 15th for the previous month. It contains data on salaries, contributions and taxes for all employees.
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Calculation example (gross €1,500, Podgorica)
| Item | Amount |
|---|---|
| Gross salary | €1,500.00 |
| Employee pension (10%) | €150.00 |
| Employee unemployment (0.5%) | €7.50 |
| Total employee contributions | €157.50 |
| Tax: 9% on €300 (700 → 1,000) | €27.00 |
| Tax: 15% on €500 (above 1,000) | €75.00 |
| Total tax | €102.00 |
| Net salary (gross − contribs − tax) | €1,240.50 |
| --- | --- |
| Surtax 15% (Podgorica, paid by employer) | €15.30 |
| Employer unemployment (0.5%) | €7.50 |
| Labour Fund (0.2%) | €3.00 |
| PKCG (0.27%) | €4.05 |
| SSSCG (0.2%) | €3.00 |
| Total employer cost | €1,532.85 |
Additional notes
The minimum wage is set by Government decision. All contributions and taxes are calculated on the minimum wage using the same procedure.
For questions and support: IRMS portal (https://irms.tax.gov.me/public/), email [email protected], tel. 19707.
Required Documents
- IOPPD form (monthly consolidated return)
- Employment contract
- Working time records
- Pay slip for the employee
Legal Basis
Competent Institutions
- Tax Administration of Montenegro
IOPPD filing and collection
- eUprava
Electronic IOPPD filing
Related guides
Social Contributions in Montenegro
Pension 10%, health abolished, unemployment 0.5% — Oct 2024 reform
Employee Registration with Tax Authority
Registering employees, IOPPD form, social insurance, Pension Fund
Income Tax in Montenegro
Rates 0/9/15% + municipal surtax 10-15%, €700 deduction, 10.5% contributions