Individual - Other taxes

Last reviewed - 12 June 2024

Social security contributions

Social security contributions for pension and disability insurance and unemployment insurance are calculated and withheld by an employer from the salary paid to an employee. Unlike unemployment insurance contributions, pension and disability insurance contributions are subject to a specific annual cap.

Social security contributions are payable by the employer and employee at different rates. The amount borne by the employer is treated as an operating cost while the portion payable by the employee is taken from the gross salary.

The rates paid by the employer are as follows:

  • Pension and disability insurance 5.5%.
  • Unemployment insurance 0.5%.

The rates paid by the employee are as follows:

  • Pension and disability insurance 15%.
  • Unemployment insurance 0.5%.

Consumption taxes

Value-added tax (VAT)

The main principles of the Montenegrin VAT are in line with the European Union (EU) Sixth Directive guidelines. Taxable supplies are subject to a general 21% VAT rate; however, certain supplies are taxed at a reduced 7% rate (e.g. bread, milk, books, medicines) and 0% rate (e.g. export of goods, supply of gasoline for vessels in international traffic).

See the Other taxes section in the Corporate tax summary for more information.