North Macedonia taxes employment income at a flat 10%, after deducting social contributions of 28% and a monthly personal allowance of 10,932 denars (≈ €178). All of it is withheld from the gross salary: there is no separate employer contribution, so the cost of an employee is approximately the gross salary. On a gross salary of 60,000 denars (≈ €976) the employee takes home 39,973 denars (≈ €650).
The rates at a glance
| Item | Rate or amount (2026) | Base |
|---|---|---|
| Pension and disability insurance | 19.9% | Gross salary |
| Health insurance | 7.5% | Gross salary |
| Unemployment insurance | 0.5% | Gross salary |
| Additional health contribution (injury at work, occupational disease) | 0.1% | Gross salary |
| Total social contributions | 28% | Gross salary |
| Personal allowance | 10,932 MKD per month (131,184 MKD per year) | Deducted before tax |
| Personal income tax | 10% flat | Gross − contributions − allowance |
| Employer-side contributions | None | — |
The contribution split above applies from the July 2026 payroll (Сл. весник 148/2026). Before that the split was 18.8 / 7.5 / 1.2 / 0.5, also 28% in total, so the change moved money between the funds without changing anyone's net salary.
Social contributions: 28%, all inside gross
Contributions are calculated on the gross salary and deducted from it. Two limits apply to the base. The maximum monthly base is 16 times the average gross salary, which for 2026 is 16 × 69,141 = 1,106,256 denars (≈ €17,988); above that, no contributions are charged. The minimum base for full-time work is at least half of the average gross salary. The cap matters only for a handful of executive salaries; for everyone else, contributions are simply 28% of gross.
Personal income tax: flat 10% after the allowance
Personal income tax (данок на личен доход) on salaries is 10% regardless of the amount. The base is gross minus contributions minus the personal allowance of 10,932 denars a month (131,184 denars a year in 2026), which is indexed every January. The allowance applies to employment income only; it is not applied to contractor or dividend income.
Worked example: 60,000 MKD gross
| Line | MKD | EUR |
|---|---|---|
| Gross salary | 60,000 MKD | ≈ €976 |
| Pension and disability 19.9% | 11,940 MKD | ≈ €194 |
| Health 7.5% | 4,500 MKD | ≈ €73 |
| Unemployment 0.5% | 300 MKD | ≈ €5 |
| Injury-at-work health contribution 0.1% | 60 MKD | ≈ €1 |
| Total contributions 28% | 16,800 MKD | ≈ €273 |
| Personal allowance | 10,932 MKD | ≈ €178 |
| Taxable base (60,000 − 16,800 − 10,932) | 32,268 MKD | ≈ €525 |
| Income tax 10% (3,226.8, rounded) | 3,227 MKD | ≈ €52 |
| Net salary (60,000 − 16,800 − 3,227) | 39,973 MKD | ≈ €650 |
| Employer cost | ≈ 60,000 MKD | ≈ €976 |
In total 20,027 denars (≈ €326) is withheld from this salary, about a third of gross. Tax is calculated in whole denars, so 3,226.8 becomes 3,227. Run any other amount, in either direction, through the salary calculator.
Employer cost ≈ gross
Unlike in most European countries, there is no employer-side social contribution layer in North Macedonia. What the employer pays out (net to the employee, contributions to the funds, tax to УЈП) adds up to the gross salary, and all of it is reported through the monthly МПИН filing to УЈП.
What does come on top of gross are non-tax costs: paid annual leave (at least 20 working days a year), the annual leave allowance (at least 40% of the average net salary under the private-sector collective agreement), seniority pay of 0.5% of the base salary per year of service, employer-paid sick leave for the first 30 days, and supplements for overtime (+35%), night work (+35%), and Sunday and holiday work (+50%).
Contractors: договор за дело
Income under a service contract (договор за дело) is taxed at 10% with no social contributions and without the personal allowance. The paying company withholds the tax and reports it to УЈП through the е-ПДД system; the contractor receives the net. Example: 30,000 denars gross (≈ €488) → 3,000 denars tax (≈ €49) → 27,000 denars net (≈ €439).
That looks cheap, but a service contract is for a defined piece of work, not for continuous work under the company's direction. When the elements of employment are present (working hours, instructions, the company's premises, continuous work), the Labour Relations Act treats the relationship as employment, and the Labour Inspectorate can order the company to employ the person and impose fines. The trade-offs are covered in EOR vs contractor: misclassification risk.
Dividends and other income
Dividends paid to individuals are taxed at 10%, withheld at payment. Other categories of personal income (rent, copyright) are also taxed at 10%, each on its own base after the standardised cost deduction the law prescribes. Corporate profit is taxed separately at 10% before any dividend is paid.
The annual pre-filled tax return
УЈП prepares a pre-filled annual tax return (ДЛД-ГДП) for every individual by 30 April of the following year, based on the amounts employers and other payers reported during the year. The taxpayer confirms or corrects it by 31 May. For an employee with salary income only there is normally nothing further to pay, because the 10% was withheld every month.
FAQ
What is the income tax rate in North Macedonia? A flat 10% on employment income, after social contributions and the monthly personal allowance of 10,932 denars. Dividends and contractor income are also taxed at 10%.
How much is deducted from a salary in North Macedonia? 28% social contributions plus 10% tax on the remainder after the allowance. On 60,000 denars gross that is 16,800 in contributions and 3,227 in tax, leaving 39,973 net.
Does the employer pay social contributions on top of the salary? No. All contributions are inside the gross salary; employer cost is approximately gross.
Is there a cap on contributions? Yes. The monthly base is capped at 16 times the average gross salary, 1,106,256 denars for 2026.
Do employees file a tax return? УЈП pre-fills the annual return by 30 April and the individual confirms or corrects it by 31 May. Salary tax is withheld monthly by the employer.
Payroll with the right rates every month
Merot HRS runs payroll for companies in North Macedonia: contributions, tax, allowance and the МПИН filing, updated whenever the rates change, as they did in July 2026. Merot also helps foreign employers run compliant payroll in the country. For integrating payroll into your own systems, read about the North Macedonia payroll API; product details are at Merot HRS payroll.
Sources
- Law on Personal Income Tax (Закон за данокот на личен доход)
- Law on Mandatory Social Insurance Contributions; contribution rates from July 2026 (Сл. весник 148/2026)
- Labour Relations Act (ЗРО), elements of an employment relationship
- Law on Obligations (ЗОО), service contracts
- Law on Profit Tax (Закон за данокот на добивка), dividends
- Public Revenue Office (УЈП), е-ПДД and the annual return: https://ujp.gov.mk
- State Statistical Office, average gross salary used for the 2026 contribution cap: https://www.stat.mk