Salary Calculation & IOPPD

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.

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.