Hire employees in Albania
What a foreign company needs to know before employing people in Albania: whether you need a local entity, what an employee costs on top of a 16.7% contribution rate that is capped for higher salaries, how the 2026 minimum wage and the monthly declarations work, what notice and severance apply, and why the temporary employment agency rules shape how you structure a hire. Written for CHROs, CFOs, General Counsel and founders.
Employer of record in Albania: quick answers
The questions leadership teams ask first.
Do I need a local entity in Albania to hire?
No. There are three routes:
- Employer of Record. Dryft Global employs the person in Albania through a compliant local employer, declares them to the tax administration before day one, files the monthly declarations and runs payroll. You direct the work.
- Direct local entity. You form a limited liability company (SH.P.K.) online through the National Business Center, register for tax and set up payroll: plan for a few weeks before the first payroll.
- Independent contractor. Lawful only for genuinely independent work. Long single-client arrangements can be reclassified as employment, and single-client freelancers are taxed at employment income rates.
When should I use an EOR instead of registering locally?
Use an EOR for your first engineers or business staff in Albania, when you want to start in days and do not want to build day-before registration, monthly declarations and compliance with the temporary agency rules yourself. Your own entity earns its keep for a sustained team or a sales office signing Albanian contracts.
What does an employee actually cost beyond salary?
Employer contributions are 16.7%: 15% social insurance on gross salary up to ALL 186,416 a month and 1.7% health insurance on full gross with no cap. Above the cap only health continues, so on a salary of ALL 250,000 the effective employer rate is about 12.9%. Budget about 13% to 17% on top of gross, before private health insurance or other extras.
How difficult is termination in Albania?
Dismissal needs a reasonable cause and the correct procedure. Notice runs from 2 weeks to 3 months by length of service, and after 3 years the employer owes severance of at least half a month's pay per year. An unjustified dismissal is void and can cost up to 1 year's pay plus notice pay, with 180 days to claim. Mutual agreement is the common clean exit.
Can Dryft Global legally employ my team in Albania?
Yes. Dryft Global employs your team in Albania through a compliant local employer structured for the temporary employment agency rules. We issue Labour Code contracts, declare employees before day one, file monthly declarations and pay tax and contributions by the 20th, administer leave and sick pay, and manage notice and severance.
Hiring routes compared
Speed, set-up burden and liability differ by route.
| Factor | Direct local entity | Dryft Global EOR | Independent contractor |
|---|---|---|---|
| Time to first payroll | A few weeks | Days to 2 weeks | Days |
| Local entity required | Yes, SH.P.K. or branch | No | No |
| Registration and monthly declarations | Your filings | Handled by Dryft Global | Contractor's own |
| Temporary agency rules | Not applicable | Structured compliantly by Dryft | Not applicable |
| Statutory liability | Direct corporate exposure | Assumed by Dryft Global | High for single-client, employee-like work |
| Best fit | Sustained team, local sales | First hires, engineering and BPO teams | Short independent projects |
What an employee costs in Albania
Employer contributions in Albania are moderate, and the social insurance cap brings the effective rate down for higher salaries. The model below is a Tirana software engineer on ALL 250,000 gross a month in 2026, a senior-level salary.
| Component | Employer share | Notes |
|---|---|---|
| Social insurance | 15% | On gross up to ALL 186,416 a month; employee pays a further 9.5% |
| Health insurance | 1.7% | On full gross, no cap; employee pays a further 1.7% |
| Nominal rate | 16.7% | Applies in full up to the cap |
| Effective rate at ALL 250,000 | ~12.9% | ALL 32,212 a month above gross salary |
For an employee on ALL 250,000 a month, budget roughly ALL 3.39 million (about EUR 37,300 or USD 41,600) a year before the EOR fee, at the Bank of Albania rate of 11 November 2026. The lek is historically strong, so euro and dollar figures move with it. The employee's own deductions are ALL 21,960 in contributions and ALL 33,600 in income tax, leaving net pay of about ALL 194,440 a month. Ask us for a cost model with current rates applied.
Payroll and tax
Salaries are paid monthly in lek by bank transfer, with a written payslip for each payment; another currency is allowed only by agreement. Each new employee must be declared to the tax administration at least one day before work starts. The monthly payroll declaration is filed electronically, and income tax and contributions are paid by the 20th of the following month.
Income tax withholding
Employment income is taxed at 13% on annual taxable income up to ALL 2,040,000 and 23% above. A monthly personal deduction applies through one employer: ALL 50,000 for pay up to ALL 50,000, ALL 35,000 for pay up to ALL 60,000 and ALL 30,000 above that. For pay above ALL 60,000, monthly tax is 13% of gross minus ALL 30,000 up to ALL 200,000 of gross, then 23% on the excess. Employees with annual income above ALL 1,200,000 or more than one employer file an annual return by 31 March.
Minimum wage 2026
The national minimum wage is ALL 50,000 gross a month (ALL 287.3 an hour) from 1 January 2026, up from ALL 40,000, set by Decision of the Council of Ministers No. 776. It binds every employer, domestic or foreign.
Leave and mandatory benefits
- Annual leave. At least 22 working days a year, excluding public holidays, since August 2024.
- Public holidays. New Year, Summer Day, Nevruz, Catholic and Orthodox Easter, Labour Day, the two Bajram holidays, Mother Teresa Day, Alphabet Day, Independence and Liberation Days, National Youth Day and Christmas, with substitute days when a holiday falls on a weekend.
- Sick pay. The employer pays at least 80% for the first 14 days, and the Social Insurance Institute pays from day 15.
- Maternity. 365 days of maternity benefit (390 for multiple births), paid by the Social Insurance Institute at 80% and then 50%.
- Fathers. 3 days' paid leave from the employer on the birth of a child.
- Working time. 40 hours a week. Overtime is capped at 200 hours a year with a premium of at least 25%, and 50% on rest days and public holidays.
- Common extras. Private health insurance, meal allowances, flexible hours and remote work.
Termination and notice periods
Probation can last up to 3 months, with 5 days' notice. After that, the rules are as follows.
| Length of service | Notice |
|---|---|
| Up to 6 months | 2 weeks |
| 6 months to 2 years | 1 month |
| 2 to 5 years | 2 months |
| Over 5 years | 3 months |
- Severance. At least half a month's pay per full year of service when the employer terminates after 3 years or more.
- Unjustified dismissal. Void, with compensation of up to 1 year's pay plus notice pay.
- Claim deadline. 180 days from the end of the notice period.
- Protected periods. Employees on maternity leave, sick leave or annual leave are protected from dismissal.
- Collective dismissal. Thresholds start at 10 employees within 90 days, with at least 30 days of consultation and notice to the labour ministry.
Can I use independent contractors?
Only for genuinely independent work. The competent authority or a court can determine the true nature of a working relationship, and self-employed people who earn most of their income from one client are taxed at employment income rates rather than the small business rate. Employing someone to work under another company's direction is also regulated by the Labour Code's temporary employment agency rules, which require a licence, equal treatment with the user's own staff and a 2-year limit on the same assignment. Albanian law has no separate EOR category, so the employing structure matters. For anyone who works like an employee, an EOR set up through a compliant local employer is the safe route.
The legal framework in brief
Albania is a civil law system where the Labour Code sets minimum terms and collective agreements and contracts can only improve on them. The instruments you will hear most:
- Labour Code. Contracts, probation, working time, leave, notice, severance and temporary agency work, last amended by Law No. 91/2024.
- Law No. 29/2023 on Income Tax. The 13% and 23% employment income rates and the monthly personal deduction.
- Social and health insurance. 16.7% employer and 11.2% employee, with a capped social insurance base.
- Data protection. Law No. 124/2024, aligned with the GDPR and in force since January 2025, overseen by the Commissioner for the Right to Information and Personal Data Protection.
- Immigration and right to work. A unique residence and work permit under Law No. 79/2021, filed through e-Albania, with a 7-day labour market test; US, EU and Schengen citizens need no employment authorisation but still need a residence permit after 90 days.
- Corporate tax. 15%, with a 0% small business rate until 2029 and no tax treaty with the United States.
- Authorities. The State Labour Inspectorate, the General Directorate of Taxation, the Social Insurance Institute, the National Agency for Employment and Skills and the National Business Center.
Where the talent is
About 2.4 million people, with unemployment of 8.3% in the second quarter of 2026. Albania's ICT and BPO sector employs about 49,000 professionals, and the average gross wage in information and communication was ALL 131,747 in the first quarter of 2026. Italian and English are strengths of the workforce. Time is UTC+1 (UTC+2 in summer). Albania is an EU candidate country, not an EU member, and uses its own currency, the lek.
| Region | Talent and industry concentration |
|---|---|
| Tirana | Main ICT, BPO and headquarters hub, technology parks |
| Durrës | Port city, logistics and business services |
| Shkodër | Services and university talent in the north |
| Vlorë | Services and tourism in the south |
Albania Implementation Kit
This page tells you the rules. The kit tells you what to do, in what order, and what goes wrong when you skip a step.
- Step-by-step checklist, from route selection to first payroll
- Contract, probation and registration before day one
- Gross to net and employer cost set-up under the 2026 rates and the social insurance cap
- Monthly declaration and payment calendar
- Temporary agency and contractor risk checklist
- Notice, severance and mutual agreement pack
- Every official Albanian authority with direct links
Hiring in nearby markets
Employer of record and hiring guides for other countries in Europe: Armenia · Austria · Belgium · Bulgaria · Croatia · Cyprus · Czechia · Denmark. See all global hiring guides or compare routes in EOR vs PEO vs entity.
This guide is general information, not legal, tax or immigration advice. Albania changes the minimum wage and the contribution bases from time to time, and the temporary agency and permit rules are applied case by case. Confirm current figures and the employment structure with a qualified adviser or with Dryft. Last reviewed November 2026.
Ready to hire in Albania?
Tell us who you want to hire and where they sit. You will get a cost model and a compliant route within a day, from a person who has done this before.