Guide
Entrepreneur personal salary (lična zarada)
We assess whether the personal salary pays off for you, file your election with the Tax Administration, and each month calculate and report the tax and contributions on time.
As an entrepreneur on books you have a choice: to pay yourself a wage (a personal salary) or to be taxed on your whole profit. It sounds technical, but it comes down to one question, on how much money you pay the expensive contributions. Below we explain the difference between the two options in plain terms, when a personal salary really pays off, the minimum you must pay every month, and why many people set a salary just above the lowest base. If you want to compare the amounts, our salary calculator is right here.
What you should know
- A personal salary is only for entrepreneurs who keep business books, not for flat-rate traders. It is a monthly wage you pay yourself, booked as a business expense.
- The key difference is contributions. Without a personal salary you pay contributions (about 35%) on your whole taxable profit; with one, only on the salary you take, and the profit above it is taxed at just 10%. That is why a personal salary saves most when profit is high and steady.
- When it pays off: as a rule of thumb it pays off on higher, regular profit (it can save 20 to 40%), and on small profit (roughly up to 30,000 dinars a month) it usually does not.
- A popular tactic: set the salary just above the lowest base (around 52,000 dinars), because you pay contributions on at least 51,297 dinars anyway. For a small extra cost you get a noticeably higher net.
- The main downside: you pay contributions on the minimum base (about 17,980 dinars) every month, even when you pay no salary or have no income, which matters for seasonal work.
- Your money is not locked in. On top of the salary you can freely withdraw the firm's profit to your account with no extra tax at the moment of withdrawal, and a documented monthly salary also helps with loans, a mortgage or a visa. The election is filed by 15 December, effective from the following year.
| Item | Without personal salary | With personal salary |
|---|---|---|
| What is taxed | Entire taxable profit | Paid salary plus remaining profit |
| Contributions are paid on | The entire taxable profit (up to the max base) | Only the paid salary (at least 51,297 RSD) |
| Tax rate | 10% on the whole profit | 10% on the salary and the remaining profit |
| Money withdrawn from the business | Not a deductible cost | Paid salary is an expense |
| Filing | Annual tax return | PPP-PD before each payment |
How we handle it
- 01 Analysis and cost-benefit check We compare your expected profit, costs and take-home income in both scenarios, with and without a personal salary, to determine which option is more favorable for you.
- 02 Filing the election If the personal salary pays off, we prepare and electronically file the election notice with the Tax Administration, mindful of the 15 December deadline, with effect from the following year.
- 03 Setting the salary amount Together we set the monthly personal salary amount, checking the non-taxable portion and the prescribed minimum and maximum contribution bases.
- 04 Monthly calculation and PPP-PD Each month we calculate the tax and contributions on the personal salary, prepare and electronically submit the PPP-PD return before payment, and obtain the filing identification number.
- 05 Orders and deadlines We prepare the payment orders for the personal salary, tax and contributions and track the deadlines, so obligations are settled no later than the payment date.
- 06 Bookkeeping and annual review We book the personal salary as an expense, reconcile it with the annual tax on income from self-employment, and recommend changing your election in good time when it becomes more favorable.
Frequently asked questions
Personal salary or just tax on my whole profit, which costs less?
It depends on your profit. Without a personal salary you pay about 35% in contributions plus 10% tax on your entire profit. With a personal salary you pay contributions only on the salary you set (at least the minimum base), and just 10% tax on the profit above it. So the higher and steadier your profit, the more a personal salary saves you. If your profit is small (roughly 30,000 RSD a month or less), it usually is not worth it.
How much will a personal salary cost me each month in 2026?
On the salary you pay 10% income tax on the part above the non-taxable 34,221 RSD, plus contributions of 35.05% (PIO 24%, health 10.3%, unemployment 0.75%). Contributions are calculated on at least the minimum base of 51,297 RSD, which is about 17,980 RSD per month, even if you pay yourself less. If you are already insured elsewhere, only the 24% PIO applies.
By when do I have to decide, and can I change it later?
You notify the Tax Administration through the ePorezi portal by 15 December, and it applies from 1 January of the next year. New entrepreneurs can choose at registration. Once you opt in it stays in force until you file a notice to stop, also by 15 December for the following year. You cannot switch back and forth during the year.
If I set a low salary, can I still take money out of the business?
Yes. Beyond the salary you can withdraw the firm's profit (from the current or earlier years) to your personal account, and that profit withdrawal is not taxed again at the moment you take it. So a low salary keeps your contributions low without locking your money inside the business.
Can a flat-rate (paušal) entrepreneur pay a personal salary?
No. Personal salary is only for entrepreneurs who keep business books (single or double-entry). A flat-rate trader pays a fixed monthly amount set by the Tax Administration and does not use this option. To use a personal salary you first have to be on the book-keeping regime.
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