Summary
The Albanian social security system is a compulsory, pay-as-you-go (PAYG) system, primarily managed by the Social Insurance Institute (SII). It covers employees, self-employed individuals, and agricultural workers for risks such as old age, disability, and death. Overall coverage and benefit levels are low by Western European standards.
Details
Contributions
Employees pay social security contributions at the rate of 11.2%, of which 9.5% are social insurance contributions and 1.7% health insurance contributions. Employers contribute 16.7% of gross salary, of which 15% is social insurance contributions and 1.7% health insurance contributions. The minimum monthly wage for contribution purposes is $610, and the maximum is $2,275, implying a maximum combined employee and employer charge of $466 a month.
Treaties
Albania has 16 active bilateral social security agreements, including with Germany, Canada, Switzerland and Belgium. The majority of its agreements are with other countries in South Eastern Europe. Most agreements provide for up to five years of continued home country coverage, meaning that assignees to Albania from the above countries usually continue to pay social security contributions in their home country.
UK and US expatriates moving to Albania are likely to be exposed to double social security contributions, at least for part of their assignment.
Exemptions
Given the low level of contributions, implementing planning to reduce employer or employee charges is unlikely to be cost effective.
Administration
The social security contributions are withheld and paid by the employer.
The submission of monthly payrolls and tax returns, including the declaration and payment of PIT and social and health contributions, must be done electronically by the 20th of the following month.
Benefits
The pension age is currently 65 for men and 61 years and 8 months for women, with a goal of reaching 67 for both by 2056. More than 38 years of contributions are required for a full pension. Aside from pensions, the Albanian social security system provides sickness and maternity benefits, employment injury compensation, unemployment benefits and limited family-related support. Benefit levels are generally low.
Other
Social and health insurance payments are fully deductible from taxable income.
Contributions to private or voluntary pension funds are also deductible.
Social security insights are intended to provide quick and straightforward insights into social security regimes. Always seek professional advice based on actual circumstances before acting.
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