The average net salary in Serbia in August 2016 was 45,286 dinars [around €367]. Photo: Beta.

A frequently heard complaint in Serbia, both in the business community and among many ordinary people, is that taxes imposed on salaries of workers in Serbia are a huge burden. A common assertion is that incomes in Serbia are taxed at a far higher rate than in the rest of Europe.

That this perception is so firmly rooted is puzzling, given that several studies and international comparisons during the last few years have shown that the tax burden on wages and salaries in Serbia is around the European average.

Much the same model as Germany

The Serbian system of labour taxation is similar to the model used in many European countries, including Germany.

There is a general income tax, which in Serbia stands at 10 per cent. In addition, employers and employees pay three types of social insurance contributions – for pensions, healthcare and for the eventuality of unemployment.