Competitive Costs
Average salaries in Serbia are low enough to ensure cost-effective production. While slightly higher than in neighboring countries, such as Romania and Bulgaria, total costs for employers stand at merely 40% of the level in EU countries from Eastern Europe.
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Source: EUROSTAT, Statistical Office of the Republic of Serbia
Labor costs are particularly low in a number of industries. For example, the ratio of average salaries among processing industries is 9:1, with a large number of them reporting average salaries below €300. Production of furniture, motor vehicles, apparel, footwear, and several other industries fall within this category, while very few industries, such as tobacco and oil processing, record significantly higher salaries.
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Source: Statistical Office of the Republic of Serbia
Currently, salary tax and social insurance contributions are already among the lowest in Central and Eastern Europe. Additional tax cuts–introduced last year–reduced total labor costs for employers from 73% to 63% of the net salary. With only modest real salary growth in the coming years forecast at around 5%, cost competitiveness of Serbia’s labor force will be further bolstered.
