Albanian Labor Code and the cost
For companies operating or planning to invest in Albania, it is essential to understand the labour regulations and the cost of employees. The Albanian Labour Code provides the main legal framework governing the relationship between employers and employees.
This guide provides an overview of the main rules regarding employment contracts, working hours, annual leave, salaries, and the cost of employment in Albania.
1. Employment Contract
According to the Albanian Labour Code, employment relationships must be regulated by an employment contract.
Types of employment contracts
| Contract Type | Maximum Duration |
|---|---|
| Open-ended contract | No limit |
| Fixed-term contract | Up to 3 years |
| Probation period | Up to 3 months |
During the probation period (maximum 3 months), either party may terminate the contract with 5 days’ notice.
2. Working Hours and Annual Leave
Working hours
According to the Albanian Labour Code, the standard working schedule is:
- 8 hours per day
- 40 hours per week
| Working Days | Working Hours |
|---|---|
| 5 days per week | 8 hours per day |
| Weekly total | 40 hours |
Paid Annual Leave
According to the current legislation, employees are entitled to at least 22 working days of paid annual leave for each full year of employment.
Annual leave is calculated in working days, meaning the following days are not included:
- Saturday
- Sunday
- Official public holidays
Example of leave calculation
| Leave Period | Working Days |
|---|---|
| 1 week | 5 days |
| 2 weeks | 10 days |
| 4 weeks | 20 days |
| Minimum annual leave | 22 days |
If the employment relationship ends and the employee has unused leave days, these must be compensated financially.
3. Salary and Compensation
The salary system in Albania is regulated by specific legal provisions.
Minimum wage
As of 2026, the minimum gross salary in Albania is:
50,000 ALL per month
No employee may be paid less than the legally established minimum wage.
Salaries must be paid at least once per month.
Overtime and Work on Holidays
Overtime work and work performed on holidays must be compensated with additional pay.
| Type of Work | Salary Increase |
|---|---|
| Overtime work | +25% |
| Work on weekends or public holidays | +50% |
4. Health and Safety at Work
Employers are responsible for ensuring a safe working environment for employees.
Key obligations include:
- Providing safety equipment
- Conducting regular inspections of working conditions
- Organizing training on emergency procedures
The main objective is to prevent workplace accidents and occupational diseases.
5. Termination of Employment
Employment relationships may end in several situations:
- Mutual agreement between the parties
- Expiration of the contract
- Termination by the employer
- Resignation by the employee
Notice periods
| Length of Service | Notice Period |
|---|---|
| Less than 6 months | 15 days |
| 6 months – 1 year | 1 month |
| 2 – 5 years | 2 months |
| More than 5 years | 3 months |
6. Protection of Women and Minors
Maternity leave
Pregnant employees are entitled to 365 days of maternity leave.
| Period | Salary Percentage |
|---|---|
| First 150 days | 80% of salary |
| Remaining days | 50% of salary |
Young workers
Employees under 18 years old:
- cannot be employed in hazardous jobs
- must have reduced working hours
- benefit from additional labour protections
7. Trade Unions and Collective Bargaining
Employees have the right to form or join trade unions in order to protect their labour rights.
The relationship between trade unions and employers is regulated through collective agreements.
Employers may not discriminate against employees for union membership or union activities.
8. Employer Obligations
Employers in Albania must:
- register employees with the social security authorities
- maintain payroll records
- pay social security and health insurance contributions
Cost of Employment in Albania
The cost of employment includes:
- gross salary
- income tax
- social security contributions
- health insurance contributions
These contributions are shared between the employer and the employee.
Social Security and Health Contributions
| Contribution | Rate |
|---|---|
| Social Security (Employer) | 15% |
| Social Security (Employee) | 9.5% |
| Health Insurance (Employer) | 1.7% |
| Health Insurance (Employee) | 1.7% |
Example of Net Salary
Gross salary: 50,000 ALL
| Description | Amount |
|---|---|
| Social security contribution | 4,750 ALL |
| Health insurance | 850 ALL |
| Net salary | 44,400 ALL |
(Income tax does not apply to salaries up to 50,000 ALL.)
Total Employer Cost
| Description | Amount |
|---|---|
| Gross salary | 50,000 ALL |
| Social security contribution | 7,500 ALL |
| Health insurance | 850 ALL |
| Total employer cost | 58,350 ALL |
Conclusion
Labour costs in Albania remain competitive compared to many European countries, making the country an attractive destination for investment, outsourcing, and international business operations.
Key indicators include:
- Minimum annual leave: 22 working days
- Minimum gross salary: 50,000 ALL
- Minimum net salary: 44,400 ALL
- Total employer cost: 58,350 ALL
For this reason, Albania is increasingly considered an attractive destination for companies looking to expand their business or outsource services.
