Hire in Macedonia through our Employer of Record (EOR)

North Macedonia's employment landscape is characterized by a young workforce, with a significant portion aged between 25-54. The country faces challenges such as emigration of skilled workers and a persistent gender gap in the labor market. While the service sector dominates employment, industry and agriculture continue to play important roles. The workforce is increasingly focusing on digital skills and English proficiency to meet modern market demands.

Overview of Labor Laws

North Macedonia's labor laws aim to protect workers' rights while promoting economic growth. Key aspects include:

• A standard 40-hour workweek with provisions for overtime
• Minimum wage regulations that are periodically reviewed
• Mandatory social security contributions for both employers and employees
• Provisions for annual leave, sick leave, and maternity/paternity leave
• Protections against discrimination and unfair dismissal

These laws apply to both local and foreign workers, ensuring a level playing field for all employees in the country.

Cultural Considerations

Understanding North Macedonian work culture is crucial for successful employment relationships:

• Family and personal relationships are highly valued, with an emphasis on work-life balance
• After-work socializing is common and often seen as an extension of the workday
• Communication style balances directness with formality, especially when addressing seniors
• Building rapport through small talk is important before engaging in business discussions
• Nonverbal cues play a significant role in communication
• Organizational structures often reflect a respect for hierarchy, with decision-making power concentrated at higher levels

Challenges of Direct Hiring

Employers considering direct hiring in North Macedonia may face several challenges:

1. Navigating complex labor laws and regulations
2. Understanding and adapting to local work culture and expectations
3. Managing the recruitment process in a market with skill shortages in certain sectors
4. Addressing language barriers, particularly in non-English speaking roles
5. Dealing with administrative tasks such as payroll, tax compliance, and social security contributions
6. Keeping up with frequent changes in employment legislation
7. Retaining talent in a market where skilled workers often seek opportunities abroad

These challenges highlight the importance of thorough preparation and local expertise when engaging in direct hiring in North Macedonia.

North Macedonia's payroll and tax system is designed to ensure both employers and employees contribute to the country's social security and healthcare systems. The system involves a combination of employer contributions, employee deductions, and personal income tax. This structure aims to provide a comprehensive safety net for workers while also funding essential government services.

In North Macedonia, employers are responsible for calculating, withholding, and remitting both employee contributions and their own contributions to the relevant authorities. The country operates on a Pay-As-You-Earn (PAYE) system, where taxes and social security contributions are deducted from employees' salaries before they receive their net pay.

Employer Contributions

Employers in North Macedonia are required to make significant contributions to various social security funds on behalf of their employees. These contributions are calculated based on the employee's gross salary and include:

1. Pension and Disability Insurance: Employers contribute 18.8% of the employee's gross salary towards this fund, which provides for retirement benefits and disability support.

2. Health Insurance: A contribution of 7.5% of the employee's gross salary goes towards the national health insurance system.

3. Additional Health Insurance: An extra 0.5% is contributed for additional health coverage.

4. Employment Insurance: Employers must pay 1.2% of the employee's gross salary towards unemployment insurance.

It's important to note that there is a maximum monthly salary base for calculating these contributions. Any portion of an employee's salary exceeding this base is not subject to social security contributions.

Employers are also responsible for providing severance pay in cases of redundancy, as outlined in the North Macedonian Labor Law. They must calculate these contributions monthly and remit them to the appropriate government authorities along with the employee's portion of social security contributions.

Employee Contributions

Employees in North Macedonia also bear a portion of the social security contributions, which are automatically deducted from their gross salaries. These contributions mirror the employer's contributions and include:

1. Pension and Disability Insurance: 18.8% of gross salary
2. Health Insurance: 7.5% of gross salary
3. Employment Insurance: 1.2% of gross salary
4. Additional Health Insurance: 0.5% of gross salary

In addition to these social security contributions, employees are subject to Personal Income Tax (PIT). North Macedonia operates a flat PIT rate of 10% on taxable income. To calculate taxable income, social security contributions and a fixed tax-free allowance (currently MKD 8,000) are deducted from the gross salary.

Employers are responsible for calculating both the social security contributions and PIT, withholding them from the employee's salary, and remitting these deductions to the tax authorities. They also manage the submission of necessary tax reports on behalf of their employees.

It's worth noting that there may be certain tax deductions or credits available for employees in specific circumstances. However, as labor regulations and tax codes can be complex and subject to change, it's advisable for both employers and employees to stay informed about current requirements and seek professional advice when necessary.

By understanding and adhering to these payroll and tax obligations, both employers and employees in North Macedonia contribute to the country's social welfare system while ensuring compliance with local labor laws.

North Macedonia offers a comprehensive set of employee benefits, balancing mandatory requirements with optional perks to create an attractive work environment. As an Employer of Record (EOR), Rivermate expertly navigates these benefits, ensuring compliance with local labor laws while helping companies provide competitive packages to attract and retain top talent. By managing both mandatory and optional benefits, an EOR like Rivermate simplifies the complexities of employment in North Macedonia, allowing businesses to focus on their core operations.

Mandatory Benefits

• Paid Time Off:

  • Minimum 20 working days of paid annual vacation for full-time employees
  • Maximum 26 days of paid annual vacation for full-time employees
  • Minimum 10 days of paid annual vacation for part-time employees
  • Paid leave for all national holidays

• Sick Leave:

  • 70% of regular salary for up to 7 days
  • 80% of regular salary for up to 15 days
  • 90% of regular salary for over 15 days

• Parental Leave:

  • Paid maternity leave for female employees
  • Paid paternity leave for fathers

• Social Security Contributions:

  • Pension and disability insurance: 18.8% employer contribution
  • Health insurance: 7.5% employer contribution
  • Employment insurance: 1.2% employer contribution

• Additional Paid Leave:

  • May include leave for marriage, bereavement, or military service (as per collective agreements or employment contracts)

Optional Benefits

• Financial and Educational Support:

  • Assistance for further education or professional development courses
  • Support for formal and non-formal education
  • Managerial insurance for senior staff

• Health and Wellness Benefits:

  • Private health insurance plans
  • Additional coverage beyond the public health system

• Work-Life Balance Benefits:

  • Flexible work arrangements
  • Remote work options
  • Compressed workweeks

• Employee Perks:

  • While less common, some companies may offer:
    • Gym memberships
    • Discounts on various services

By offering a mix of mandatory and optional benefits, employers in North Macedonia can create attractive compensation packages that support employee well-being and job satisfaction. As an EOR, Rivermate ensures that all mandatory benefits are properly administered while also helping companies implement optional benefits that align with their organizational culture and goals.

The process of termination and offboarding in Macedonia is governed by specific legal requirements designed to protect both employers and employees. This process involves several key steps and considerations that companies must adhere to when ending an employment relationship.

Grounds for Termination

In Macedonia, employers can terminate employment contracts for various reasons, including:

• Economic, technological, or structural changes
• Employee incapability
• Breach of contract or work obligations
• Cessation of the employer's activities

It's crucial for employers to have a valid and justifiable reason for termination to ensure compliance with Macedonian labor laws.

Notice Requirements

When terminating an employment contract, employers must provide proper notice to the employee:

• A minimum of one month's notice for standard terminations
• Two months' notice when terminating more than 150 employees or 5% of the total workforce

Employees are also required to give a one-month notice when resigning. These notice periods can be extended through contractual agreements but cannot be shorter than the legal minimums.

Severance Pay

In certain situations, employers are obligated to provide severance pay to terminated employees. This applies particularly to dismissals due to economic, technological, or structural reasons. The amount of severance pay is calculated based on the employee's length of service and average salary.

Procedural Requirements

To ensure a lawful termination process, employers must follow specific procedures:

1. Communicate the termination in writing
2. Clearly state the reason for dismissal
3. Provide evidence justifying the termination

Employees have the right to challenge the termination through legal channels if they believe it to be unfair or unjustified.

Offboarding Process

An effective offboarding process is essential for a smooth transition. This typically includes:

1. Conducting an exit interview
2. Retrieving company property
3. Revoking access to company systems and facilities
4. Finalizing payroll and benefits
5. Providing necessary documentation (e.g., reference letters, certificates of employment)

By following these guidelines and adhering to Macedonian labor laws, companies can ensure a compliant and professional approach to termination and offboarding in Macedonia.

Macedonia, officially known as North Macedonia, has specific visa and work permit requirements for foreign nationals seeking employment in the country. Here's a concise overview of the process:

Entry Requirements

Most foreign nationals need a visa to enter Macedonia. However, citizens of certain countries, including EU member states, can enter visa-free for up to 90 days within a 180-day period.

Work Permit Process

To work legally in Macedonia, foreign nationals typically need to obtain a work permit. The process generally involves the following steps:

1. Job offer: Secure a job offer from a Macedonian employer.

2. Residence permit application: The employer must apply for a temporary residence permit on behalf of the foreign worker.

3. Work permit application: Once the residence permit is approved, the employer can apply for a work permit.

4. Visa application: If required, the foreign national should apply for a long-stay visa (type D) at a Macedonian embassy or consulate.

Important Considerations

• Processing times: The entire process can take several weeks to a few months.
• Document requirements: Various documents, such as a valid passport, criminal record check, and proof of qualifications, may be needed.
• Renewal: Work permits are usually valid for up to one year and can be renewed.

It's important to note that regulations may change, and specific requirements can vary based on the applicant's nationality and job position. Employers and foreign workers should consult with the Macedonian Ministry of Labor and Social Policy or a qualified immigration specialist for the most up-to-date information and guidance.