Guides an employer or payroll agent through a complete monthly payroll cycle in Montenegro: gross-to-net calculations using the post-Europe Now 2.0 rates (employee 10.5%, employer 1.17%, PIT 0/9/15% on gross), municipal surtax (prirez), minimum-wage compliance, and filing the IOPPD return with the Revenue and Customs Administration (Uprava prihoda i carina) by the 15th of the following month.
Collect or confirm all data needed before any computation begins: each employee's gross monthly salary (bruto plata), municipality of residence (to set the correct prirez rate — 15% for Podgorica and Cetinje, 13% everywhere else), the pay month and year (to confirm the post-1-Oct-2024 Europe Now 2.0 rates apply), job qualification tier (for the dual-net minimum wage check: EUR 670/800 net), and whether any employee's gross exceeds the monthly PIO base cap (~EUR 5,730.42). Flag any stale or missing data before proceeding.
Compute each employee's net pay deterministically using the post-Europe Now 2.0 rates. PIT is calculated on gross using the three marginal bands (0% up to EUR 700, 9% on EUR 700.01–1,000, 15% above EUR 1,000), then the municipal surtax (prirez) is applied to the assessed PIT amount (not to income). Employee social contributions are 10.5% of gross (PIO 10% + unemployment 0.5%; health is 0%). Net pay = gross minus employee contributions minus PIT minus surtax. For employees above the monthly PIO cap (~EUR 5,730.42), PIO is applied only to the capped base while the 0.5% unemployment contribution applies to full gross.
Calculate the total employer-borne cost for the month: employer social contributions are 1.17% of gross per employee (unemployment 0.5% + Labour Fund 0.2% + Chamber of Commerce 0.27% + Prevention of Disability Fund 0.2%; PIO and health are both 0% post-reform). Total employer cost = gross + 1.17% employer contributions. Prepare the payroll journal entries — gross wages and employer contributions are expenses; withheld PIT, surtax, and employee contributions are current liabilities until remitted via the IOPPD filing.
Prepare the IOPPD (Obrazac IOPPD) — the integrated monthly return that covers both personal income tax (and municipal surtax) and all mandatory social security contributions. The IOPPD is filed online via the ePrijava/Taxis portal (https://eprijava.tax.gov.me) to the Revenue and Customs Administration (Uprava prihoda i carina). One IOPPD covers all employees for the month. Review the computed figures line by line against the payroll working paper before submission.
Submit the IOPPD electronically via ePrijava by the 15th of the month following the payroll month, and remit the total tax and contributions simultaneously. Separately disburse net salaries to employees. Archive all payroll records — IOPPD submission confirmation, payment receipts, and the payroll working paper — for audit purposes. If the 15th falls on a weekend or public holiday, confirm whether the deadline shifts to the next business day under current Tax Administration guidance.
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Montenegro Payroll
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Montenegro Social Security Contributions & Salary Tax
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