Service and Copyright Contracts
What a company or entrepreneur pays when engaging an individual without an employment contract: service contract (15 % tax on 70 % of the fee + 10 % pension contribution if the person is not otherwise insured), copyright contract (standard costs 60/50/30 %), temporary and occasional work (up to 120 working days, taxed like salary) and supplementary work. Deadlines: tax at payout, contributions and IOPPD by the 15th of the following month.
Procedure
A service contract (ugovor o djelu) is for the independent making or repair of a thing or independent performance of a specific physical or intellectual job — for tax purposes it is income from occasional independent activity (Art. 16 of the Personal Income Tax Law). A copyright contract covers works of authorship (written, musical, photographic, audiovisual works, computer programs, architecture, design…) and related rights (Art. 37l). Temporary and occasional work (Art. 200 of the Labour Law) covers jobs outside the job systematisation that need no special expertise and last no more than 120 working days per year — the contract may only be concluded with a person on the Employment Agency's unemployment records, in writing. Supplementary work (Art. 202) is a contract with a person already working full time, up to half of full working hours. A permanent position must be covered by an employment contract.
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Comparison of contracts (payer: legal entity or entrepreneur)
| Contract | Tax base | Tax | Contributions | Legal basis |
|---|---|---|---|---|
| Service contract (ugovor o djelu) | Fee − 30 % standard costs (or actual costs) | 15 % at payout | Pension 10 % from the fee — only if the contractor is not otherwise insured; no unemployment contribution | PIT Law Art. 16, 20(2), 48a; Contributions Law Art. 5(1)13, 9(8), 15, 21(5) |
| Copyright contract — fine arts | Fee − 60 % | 15 % at payout | Pension 10 % on the same base, same condition as a service contract | PIT Law Art. 37l–37m, 50c; Contributions Law Art. 4(14), 5(1)13, 9(8) |
| Copyright contract — architecture, urban planning | Fee − 50 % | 15 % at payout | Pension 10 % on the same base, same condition as a service contract | PIT Law Art. 37lj item 2; Contributions Law Art. 4(14), 5(1)13, 9(8) |
| Copyright contract — performers and all other copyright/related rights, software, patents | Fee − 30 % | 15 % at payout | Pension 10 % on the same base, same condition as a service contract | PIT Law Art. 37lj items 3–4; Contributions Law Art. 4(14), 5(1)13, 9(8) |
| Temporary and occasional work (≤ 120 working days, person from Employment Agency records) | Gross fee (like salary) | 0 % up to €700, 9 % €700–1,000, 15 % above €1,000 | Pension 10 % + unemployment 0.5 % from the fee; unemployment 0.5 % employer | Labour Law Art. 200, 203; PIT Law Art. 14(1)5; Contributions Law Art. 5, 7, 15, 18 |
| Supplementary work (up to ½ working time, already employed person) | Gross fee (like salary, code 002) | 0/9/15 % | Pension 10 % + unemployment 0.5 % from the fee; unemployment 0.5 % employer (calculated like salary) | Labour Law Art. 202, 203; PIT Law Art. 14(1)6 |
Example: contractual (gross) fee €1,000 (author's calculation under the rules above; without surtax)
| Contract | Base | Tax 15 % | Pension 10 % | Net to contractor | Net if contractor employed elsewhere |
|---|---|---|---|---|---|
| Service contract (30 %) | €700 | €105 | €70 | €825 | €895 |
| Copyright — other (30 %) | €700 | €105 | €70 | €825 | €895 |
| Copyright — architecture (50 %) | €500 | €75 | €50 | €875 | €925 |
| Copyright — fine arts (60 %) | €400 | €60 | €40 | €900 | €940 |
| Temporary and occasional work (like salary) | €1,000 gross | €27 (9 % on €300) | €100 pension + €5 unemployment | €868 | — (+ employer unemployment €5) |
Additional notes
From 1.1.2026 (Off. Gazette 160/25) occasional independent activity is explicitly the third type of independent activity (besides principal and supplementary entrepreneurial activity), and Art. 48a specifies that the withholding tax is calculated by a payer that is a legal entity or entrepreneur.
Income from occasional independent activity is taxed at a flat 15 % (Art. 10 item 3) — the progressive salary rates do not apply.
A temporary-and-occasional-work contract may only be concluded with a person on the Employment Agency's unemployment records and only for jobs lasting no more than 120 working days in a calendar year (Art. 200 of the Labour Law); the person is entitled to health and pension insurance (Art. 203).
Non-resident contractors: a non-resident individual's service-contract fee is taxed by withholding in the same way as a resident's — the payer calculates, withholds and pays 15 % tax on the fee less 30 % standard costs. The non-resident may request a certificate from the Tax Administration of the tax paid in Montenegro, used as the basis for a tax credit in their country of residence (official Tax Administration opinion, Tax Practice January 2020).
Questions and support: IRMS portal (https://irms.tax.gov.me/public/), e-mail [email protected], tel. 19707.
Required Documents
- Written contract (service / copyright / temporary and occasional work / supplementary work)
- Contractor's data (JMB, residence, insurance status)
- Fee calculation
- Payment orders for tax and contributions
- IOPPD form (by the 15th of the month)
- Annual statement to the recipient (by 31 January)
Legal Basis
- Personal Income Tax Law — consolidated text (Art. 14, 16, 20, 37l–37m, 46–48a, 50c)
- Law amending the Personal Income Tax Law (Off. Gazette CG 160/25, applies from 1.1.2026) — Art. 13 (amended Art. 48a)
- Law on Contributions for Mandatory Social Insurance — consolidated text through Off. Gazette 160/25 (Art. 4, 5, 7, 9, 15, 18, 21, 26)
- Labour Law — consolidated text 2026 (Art. 200 temporary and occasional work, Art. 202 supplementary work, Art. 203)
- Law on Financing of Local Self-Government (Art. 7–9 — surtax on personal income tax)
- Rulebook on the form and content of the unified tax-and-contributions report (insurance-basis codes 047/048/079 for contractual fees)
- Tax Administration — Tax calendar (IOPPD by the 15th of the month for the previous month)
Competent Institutions
- Tax Administration of Montenegro (IRMS portal)
Receives IOPPD reports, collects tax and contributions
- Employment Agency of Montenegro
Unemployment records — precondition for a temporary-and-occasional-work contract
- Pension Fund (Fond PIO)
Pension insurance of persons earning contractual fees
FAQ
How much does a company pay on a €1,000 service contract?+
Tax of 15 % on €700 (fee less 30 % standard costs) = €105, and pension contribution of 10 % on the same base = €70 if the contractor is not otherwise insured. The municipality also adds a surtax on the tax amount — up to 13 %, up to 15 % in Podgorica and Cetinje — an extra €13.65–15.75 on a €105 tax. All amounts are withheld from the fee: without the surtax the contractor receives €825 (€895 if employed elsewhere), slightly less with the surtax, depending on the municipality.
Are contributions due on a service contract if the contractor is employed?+
No — persons earning contractual fees are liable to pension contributions only if not liable on another basis (Art. 5 para. 1 item 13 of the Contributions Law). The unemployment contribution is never due on contractual fees.
What is the deadline for paying the tax and contributions?+
Withholding tax is paid at each payout (Art. 48a and 50c PIT Law); the payer remits the pension contribution by the 15th of the current month for the previous month (Art. 21 para. 5 of the Contributions Law); the IOPPD is filed by the 15th of the month for the previous month.
Can I sign a temporary-and-occasional-work contract with someone for a year?+
No. Such a contract is possible only for jobs that by nature last no more than 120 working days in a calendar year, are outside the job systematisation and need no special expertise, and only with a person on the Employment Agency's records (Art. 200 of the Labour Law). The fee is taxed and contributions are paid as on salary.
Which standard costs apply to a copyright contract?+
60 % for fine-art works, 50 % for architecture, urban planning and landscape architecture, 30 % for performers and all other copyright and related-rights fees, patents and trademarks (Art. 37lj PIT Law). Tax is 15 % on the remainder, withheld by the payer at payout.
Related guides
Salary Calculation & IOPPD in Montenegro
Gross-to-net with pension 10%, no health ins., surtax, IOPPD filing
Social Contributions in Montenegro
Pension 10%, health abolished, unemployment 0.5% — Oct 2024 reform
Income Tax in Montenegro
Rates 0/9/15% + municipal surtax 10-15%, €700 deduction, 10.5% contributions
Annual Personal Tax Return (GPP-FL)
Annual income tax, GPP-FL form, April 30 deadline, all income sources