Euro Model in Montenegro: Announced Minimum Salaries for 2027
Updated:
Montenegro's Government has announced a new salary calculation framework, the Euro Model, proposing higher minimum net salaries from January 2027. Prime Minister Milojko Spajić's proposal forms part of broader economic reform aimed at living standards, the domestic economy and preparation for future European Union membership.
The announcement sets out minimum net salaries of €1,000–€1,400, depending on the education level required for the position. These changes could significantly affect employees, employers, labour costs and business planning in Montenegro.
Below we explain the proposed framework, its possible business impact and the preparations employers should consider for 2027.
1. What is the Euro Model?
The Euro Model is a government salary programme presented by Prime Minister Milojko Spajić in September 2026. The official announcement envisages implementation from January 2027, supported by legislative changes enabling the new payroll framework.
Its central aim is to raise minimum salaries and reduce the tax burden on labour, increasing employees' net income while keeping overall employment costs sustainable for employers.
The Government presents the programme as part of preparation for European economic standards, seeking to improve living standards and reduce outward labour migration.
2. What minimum salaries are proposed for January 2027?
According to the Government's announcement of 17 September 2026, the proposed minimum net salaries are:
| Education level required for the position | Announced minimum net salary |
|---|---|
| Primary education or below | €1,000 per month |
| Secondary education | €1,250 per month |
| Higher education | €1,400 per month |
These amounts refer to the category of the position, not an automatic salary entitlement for everyone holding a particular qualification. Correct application requires identifying the qualifications required by the job and how the applicable rules define each category.
Employers will therefore need to review job classifications, employment contracts and payroll arrangements to identify the changes their companies require.
3. What does the Euro Model mean for employees?
The announced reform aims to raise employees' net income and improve purchasing power.
Higher salaries may support household financial security, domestic consumption and a narrowing of income differences between Montenegro and some European countries.
The Government has also identified workforce retention and encouraging emigrants to return as objectives.
The ultimate effect on living standards will also depend on prices, housing costs, productivity and labour market conditions.
A nominal salary increase does not automatically produce an equal percentage increase in real purchasing power. Assessing its impact requires looking at the goods and services the new salary can buy.
4. How could the Euro Model affect employers?
Companies operating in Montenegro should consider the Euro Model in their financial planning for 2027.
Changes to minimum salaries may affect:
- Total employment costs.
- Payroll calculations and related taxes and contributions.
- Employment contracts and internal company documents.
- Budgets and cash-flow planning.
- Recruitment policies and job structures.
- Product and service prices, depending on the company's cost structure.
The Government has also announced a reduced tax burden on labour, intending employers to share the benefits. Actual effects on total costs must be calculated using the final legal rules and each company's salary structure.
Net salary alone is therefore insufficient for business planning. The relevant figure is the total employment cost, including the salary and applicable taxes and contributions.
5. Will payroll taxes and contributions decrease?
According to the Prime Minister's announcement, the Euro Model envisages further reductions in the tax burden on labour.
The aim is for employees to retain a larger share of the total amount allocated by employers. Under the calculations presented publicly, the Prime Minister referred to employees retaining approximately 92 cents per euro at higher salary levels and up to 97 cents at the lowest levels.
These figures illustrate the announced framework and should not be used as a universal payroll calculation without checking the relevant legislation.
Before calculating salaries for 2027, employers should verify the applicable tax rates, contributions and other statutory charges, including transitional provisions.
6. What should companies do before 2027?
Preparations should begin before the first payroll period in which new rules apply.
We recommend the following steps:
- Review current salaries
List employees, agreed salaries, positions and the qualifications prescribed for those positions.
- Check job categories
Establish the minimum salary for each position under the final legal provisions. An employee's education level should not automatically be equated with the job category.
- Prepare the 2027 budget
Calculate expected salary costs using the final tax and contribution rates, employee numbers and planned business changes.
- Review contracts and internal documents
Identify any necessary amendments to employment contracts, job classification rules or other internal documents.
- Update payroll processes
Check that accounting software and payroll procedures comply with the new rules.
- Plan cash flow
Assess the impact on monthly costs, liquidity and planned investments.
- Monitor official rules
Follow legislation, secondary regulations and official guidance so payroll reflects the rules applicable from January 2027.
7. How could the Euro Model affect foreign companies and investors?
Montenegro attracts international companies through its location, tourism potential, business opportunities and European integration process.
Minimum salary changes matter to foreign investors planning incorporation, local recruitment or expansion.
An investment assessment should consider total operating costs, suitable staff availability, tax treatment, administrative obligations and expected productivity, not salaries alone.
Higher salaries may support purchasing power and consumption, but may also require business model adjustments, particularly in labour-intensive sectors.
Foreign companies should therefore understand employment costs and their obligations under Montenegrin legislation before entering the market.
8. How can Office Montenegro help?
Office Montenegro provides accounting, tax and administrative support to businesses in Montenegro, including foreign investors and international companies.
In preparing for the announced salary changes, we can assist with:
- Reviewing existing salary structures and employment costs.
- Planning payroll for the next business period.
- Assessing the effect of tax and contribution changes on labour costs.
- Regular payroll calculations and related tax filings.
- Information about company accounting and tax obligations.
- Preparation for regulatory changes and coordination with relevant professionals where necessary.
Every company has a different workforce, cost structure and business model. Assess the Euro Model individually using actual company data and the final legal rules.
Conclusion
The Euro Model is an announced change to Montenegro's minimum salary framework, with implementation planned for January 2027.
Proposed minimum net salaries are €1,000 for positions requiring primary education or below, €1,250 for positions requiring secondary education and €1,400 for positions requiring higher education.
For employees, the reform aims to increase income. For employers, it calls for careful cost planning and timely payroll adjustments.
Office Montenegro can help assess the potential impact on your business and prepare payroll and accounting processes in accordance with the applicable rules.
Contact us for accounting and tax support for your company in Montenegro.