Payroll in Montenegro: Taxes, Contributions, and How to Calculate Net Salary
Payroll in Montenegro is not complicated — until it is. The math is straightforward: a few contribution rates, three tax brackets, and a surtax. But the system uses two different “gross” concepts that confuse nearly every employer, and the rules on when you pay are stricter than most expect. Get the timing wrong and you have a compliance problem, not just an accounting error.
Net, bruto 1, and bruto 2: the three numbers you need
Every salary discussion in Montenegro involves three figures. Mixing them up is the single most common payroll mistake employers make.
Net salary is what the employee receives in their bank account — after all deductions.
Bruto 1 (gross salary) is the base from which employee contributions, personal income tax, and municipal surtax are calculated. When Montenegrin law says “gross salary,” this is the number it means.
Bruto 2 (total employer cost) is bruto 1 plus all employer-side levies calculated on top. This is the actual cash the company spends per employee per month.
A practical way to remember: bruto 1 answers “what gross corresponds to this net?” Bruto 2 answers “what does this employee actually cost me?”
In Montenegro, the gap between bruto 1 and bruto 2 is unusually small — often under 2% — because employer-side rates are low. This regularly catches employers from neighboring countries off guard. In Serbia or Croatia, the employer “uplift” is substantial. Here, it is modest but still mandatory.
Rates, calculations, and minimum wage
Montenegro’s payroll structure changed materially in 2022 and again in late 2024 through the Europe Now reforms. For the full rate tables, a worked net-to-gross calculation, and minimum wage figures, see our complete guide to hiring your first employee in Montenegro.
Three structural points worth keeping in mind:
Employer-side charges are approximately 1.17% above gross — one of the lowest burdens in Europe. Small, but mandatory. Forgetting them means your budget and filings are both wrong.
The tax base is full gross salary. Employee contributions are not deducted before calculating income tax — both are computed independently on the same gross amount. Apply the brackets to gross minus contributions and every payslip is incorrect.
The municipal surtax (prirez) applies to the income tax amount, not to income directly. If income tax is zero (gross ≤ €700), surtax is also zero — but all contributions remain due from the first euro regardless.
Payroll deadlines and reporting
When to pay
The Labour Law requires wages to be paid to the employee’s bank account at least once per month. The employer must deliver a wage calculation (obračun zarade) at the time of payment. This document has the legal force of an enforceable instrument — the employee can use it to initiate collection proceedings if wages are not paid on time.
When to remit tax and contributions
Article 46(2) of the Personal Income Tax Law is explicit: tax is calculated, withheld, and paid simultaneously with salary payment. Not within a few days. Not by the end of the month. At the same moment you transfer the net salary, you transfer income tax, contributions, and surtax to the prescribed government accounts.
This is the rule that trips up employers used to batching payroll tax payments. In Montenegro, the payment and the remittance are legally coupled.
Monthly reporting
The primary payroll report is the IOPPD — the unified report on calculated and paid taxes and contributions. It is filed by the 15th of the following month for the prior month’s salary payments. Electronic filing has been mandatory since June 2019.
The IRMS portal
All payroll reporting and employee registration goes through the IRMS (Integrisani sistem za upravljanje prihodima), the Tax Administration’s integrated revenue management system. IRMS launched on 12 January 2026, replacing the previous CRPS and TAXIS portals. Access requires a qualified digital certificate from Pošta CG or CoreIT.
Common mistakes that create real risk
Payroll errors in Montenegro are rarely about arithmetic. They are about misunderstanding the structure.
Treating bruto 1 as total cost. The employer-side levies are small — but mandatory. Forgetting unemployment (0.5%), Labour Fund (0.2%), and the other employer charges means your budget is off and your filings are wrong.
Applying income tax to the wrong base. Income tax is calculated on full gross, not on gross minus contributions. Deduct contributions first and every payslip downstream is incorrect.
Deducting health contributions. They do not exist — abolished in January 2022. If your payroll template still has a health insurance line, every calculation using it is wrong.
Paying salary without simultaneous remittance. Transferring salaries on the 5th and taxes on the 15th is not a best practice — it is a violation of Article 46(2).
Applying prirez to the wrong base. The municipal surtax is calculated on the income tax amount, not on income. Small error, consistent underpayment, cumulative exposure.
AQ Accounting handles payroll
Montenegro has changed its payroll structure materially twice in four years. The contribution rates, tax brackets, and filing systems from 2021 are all different today. The IRMS portal replaced the previous system entirely in January 2026.
If you are running payroll on a spreadsheet built from pre-2022 rates, your numbers are wrong. A professional provider keeps current with the rules and handles the bruto 1/bruto 2 budgeting, the simultaneous remittance cadence, and the electronic filing.
At AQ Accounting, we handle payroll end-to-end: monthly calculations, IOPPD filing, contribution remittance, and employee payslips — on time, every month. Get in touch and stop running payroll on outdated numbers.
This article reflects the Personal Income Tax Law, Labour Law, Law on Mandatory Social Insurance Contributions, and administrative guidance in force as of April 2026. Tax and labour law change, and the information above should not be relied upon as legal advice. For any compliance decision, verify current rules with a qualified Montenegrin adviser.