Employment in Albania is governed by the Labour Code (Law No. 7961/1995, as amended), with social and health insurance run by the Social Insurance Institute (ISSH) and income tax collected by the General Directorate of Taxation. Here is what employers need to know about leave, pay, tax and ending employment.
The Labour Code sets minimum paid annual leave, while sickness and maternity benefits are paid largely by the Social Insurance Institute (ISSH) once the employer’s share has been covered.
At least 22 working days of paid leave a year since August 2024 (previously 4 calendar weeks). Leave can now be taken in single days rather than whole weeks. Pro-rata in the first year.
The employer pays the first 14 days of certified sickness. After that ISSH pays 70% of the average daily base, or 80% with more than 10 years of insurance, for up to 6 months in total.
At least 35 days before and 63 days after the birth (390 days for multiple births). Paid by ISSH to women with 12 months of insurance.
ISSH pays maternity benefit at 80% of the average daily wage of the previous year for the period before the birth and for 150 days after it, and at 50% for the rest of the leave. A one-off birth grant is also paid. After the compulsory 63 days following the birth, an insured father can take the remaining leave and benefit if the mother returns to work. Adoptive parents are also covered.
Set up the 22 day Albanian annual leave entitlement and each other leave type in IceHrm with its own accrual, carry forward and approval rules, including pro-rata entitlements for new joiners. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
The national minimum wage is set by decision of the Council of Ministers. The latest increase took effect on 1 January 2026.
Gross, from 1 January 2026 (up from ALL 40,000), based on 174 working hours a month. That is about ALL 287.3 per hour.
Normally 8 hours a day over 5 days. Shorter limits apply to employees under 18.
Minimum supplement for overtime, or equivalent paid time off instead. Collective agreements can set higher rates.
Overtime is only allowed within the limits set by the Labour Code. Night work and work on weekly rest days or public holidays attract additional supplements or compensatory rest. There is no mandatory 13th month salary, although some employers pay one by contract.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so overtime and holiday supplements reflect what was actually worked. Time & attendance →
Under the Income Tax Law (Law No. 29/2023), employment income is taxed at progressive rates after a personal allowance. Employers withhold tax and social contributions every month and pay them to the tax administration by the 20th of the following month.
| Annual taxable base | Rate |
|---|---|
| ALL 0 – ALL 2,040,000 | 13% |
| Over ALL 2,040,000 | 23% |
| Annual employment income | Allowance |
|---|---|
| Up to ALL 600,000 | ALL 600,000 |
| ALL 600,001 – ALL 720,000 | ALL 420,000 |
| Over ALL 720,000 | ALL 360,000 |
In practice this means an employee earning up to ALL 50,000 a month pays no income tax on their salary.
Employers pay social and health insurance on top of gross salary and withhold the employee’s share. Social insurance is calculated between a monthly minimum and maximum base.
| Contribution | Employer | Employee |
|---|---|---|
| Social insurance | 15% | 9.5% |
| Health insurance | 1.7% | 1.7% |
| Total | 16.7% | 11.2% |
Build Albanian pay the way you already structure it, with your own salary components, deductions and formula columns, such as a capped social insurance column. Want to know how well IceHrm handles payroll calculations for Albania? Contact us or see Payroll →
Employment in Albania is not “at will”. Outside the probation period an employer needs a valid reason to dismiss, and must follow the Labour Code procedure, including a meeting with the employee before the decision. A dismissal without a valid reason can cost up to one year’s salary in compensation, on top of pay for the notice period.
| Length of service | Notice |
|---|---|
| Up to 6 months | 2 weeks |
| More than 6 months, up to 2 years | 1 month |
| 2 to 5 years | 2 months |
| More than 5 years | 3 months |
When the employer ends the contract after at least 3 years of continuous service, the employee is entitled to severance of at least 15 days’ salary for each full year worked, based on the salary at the end of employment. It is not payable when the employee is dismissed immediately for serious cause.
Final pay should include any unused annual leave and outstanding salary.
Albania has 15 official holidays, reflecting its Catholic, Orthodox and Muslim communities. When a holiday falls on a weekend, the following working day is a day off.
Employees who work on a public holiday are entitled to a wage supplement or compensatory time off.
Leave groups give each office its own holiday calendar, so your Albanian team gets the right days off, including movable Easter and Eid dates, while colleagues in other countries follow theirs. Holiday calendars →
Employment contracts must be in writing and signed by both parties, and should be in Albanian. Contracts can be for an indefinite or a fixed term, and full-time or part-time.
A probation period is optional and can last up to 3 months. During probation either party can end the contract with 5 days’ notice.
Send contracts for e-signing, store them on the employee’s record, and track onboarding with task lists so registrations and paperwork are done before day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Albania, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Albania? Talk to us.
Start Free Trial Explore Features Contact Us