Changes to the New Law on the Minimum Wage

 

 

 

In the Republic of Albania, legislative changes have been approved that provide for an increase in the monthly minimum wage and the introduction of a temporary scheme for covering social and health insurance contributions by the State.
These changes apply to all employment relationships in both the public and private sectors.

Monthly minimum wage

The gross monthly minimum wage is set at 50,000 (fifty thousand) lek.

  • Entry into force: 1 January 2026
  • Mandatory application: for all employers
  • Standard monthly working hours: 174 hours
  • Indicative minimum hourly wage: approximately 287 lek/hour gross

No employment contract may provide for a gross monthly wage lower than this amount.
The minimum wage serves as the minimum legal basis for calculating social and health insurance contributions.

Definition of the minimum wage

The minimum wage represents the employee’s gross monthly base salary and does not include:

  • rewards or bonuses,
  • payments for overtime hours,
  • other occasional payments or benefits outside the base salary.                                 
  • Minimum and maximum limits for the calculation of contributions
  • Minimum limit for contribution calculation: 50,000 lek gross/month
  • Maximum limit for contribution calculation: 186,416 lek gross/month

The portion of the gross salary exceeding the maximum limit is not subject to social and health insurance contributions, but may be subject to personal income tax in accordance with the legislation in force.

State contribution coverage scheme

The law provides that, for a limited period of time, the State covers the additional contributions arising as a result of the increase in the minimum wage.

Practical example of scheme application

Illustrative example:

  • Minimum wage before the change: 40,000 lek
  • New minimum wage: 50,000 lek
  • Difference: 10,000 lek

For the period January – September 2026:

  • the employer pays the gross wage of 50,000 lek,
  • the contributions related to the difference of 10,000 lek are paid by the State,
  • the base contributions continue to be paid by the employer.
  1. Period of scheme application

The contribution coverage scheme applies for 9 months, from January 2026 to September 2026.
After the end of this period, full payment of contributions transfers to the employer.

Included subjects

The scheme applies to:

  • employees receiving the minimum wage,
  • employees whose wage is increased up to the minimum wage level,
  • all employers who declare wages in accordance with the legislation in force.           Employer obligations

The employer is obliged to:

  • adapt employment contracts,
  • declare the new minimum wage,
  • comply with legal deadlines for declaration and payment.

Failure to comply results in administrative measures in accordance with the legislation in force.

Practical implementation procedure

Implementation is carried out as follows:

  • The employer declares the new wage in the electronic tax system.
  • The system automatically calculates the base contributions and the difference covered by the State.
  • Payment of contributions covered by the State is carried out through the State budget, without additional action by the employer.
  • Monthly declarations continue according to standard legal deadlines.

Clarification on Personal Income Tax (PIT)

As of this moment, there is no official information on changes to the method of calculating PIT.
Personal income tax continues to be applied in accordance with the existing legislation.