How to Use An Employer of Record in
North Macedonia

North Macedonia requires employers to register employment contracts with the Employment Service Agency (Агенција за вработување) within eight days of the start date, navigate collective agreements that set industry-specific minimum wages above the national floor of MKD 21,850 per month, and withhold personal income tax at progressive rates up to 18%. An Employer of Record in North Macedonia becomes your legal employer on record, handling registrations, payroll tax withholding, and social security contributions while you direct the employee's work. This removes the administrative burden of maintaining a compliant HR function under the Labour Relations Law (Закон за работните односи), which mandates written contracts, probation limits, and strict termination procedures that expose foreign companies to penalties and wrongful dismissal claims if mishandled.

What Is an Employer of Record in North Macedonia?

An Employer of Record in North Macedonia is a third-party organisation that becomes the legal employer of your staff under North Macedonia law, handling all statutory obligations, payroll, and compliance while you retain full operational control. The EOR signs the employment contract, registers the employee with the Employment Service Agency and the Public Revenue Office (Управа за јавни приходи), withholds income tax and social contributions, and assumes responsibility for adherence to the Labour Relations Law and any applicable collective agreements.

Under the Labour Relations Law (Official Gazette 151/2015 and subsequent amendments), every employment relationship in North Macedonia must be documented in a written contract containing mandatory clauses on job description, salary, working hours, and probation period. The law also requires employers to pay employer social contributions totalling 27.9% of gross salary, covering pension and disability insurance (18.8%), health insurance (7.3%), and unemployment insurance (1.8%). If your employee works in a sector covered by a collective agreement, the EOR must also ensure compliance with any enhanced terms on minimum pay, notice periods, or severance that exceed statutory minimums.

You retain complete day-to-day control: assigning tasks, setting performance objectives, approving leave, and managing the employee's role within your team. The EOR owns the legal employment relationship: issuing payslips, remitting taxes to the Public Revenue Office, filing monthly and annual reports with the Employment Service Agency, and executing termination procedures in line with the Labour Relations Law and any applicable collective agreement.

How Does an Employer of Record Work in North Macedonia?

When you hire through an EOR in North Macedonia, the process begins with defining the role and ends with the EOR managing all ongoing compliance and payroll. The EOR acts as the legal employer under North Macedonia's Labour Relations Law, while you direct the employee's daily work. Here is how the process unfolds from offer to onboarding.

Step 1: Define Role and Employment Terms

You specify the job title, responsibilities, salary, and start date. The EOR confirms whether the role falls under a collective agreement covering your industry, which may set sector-specific minimum wages, probation lengths, or notice periods above the statutory floor. If a collective agreement applies, the EOR ensures your offer meets or exceeds those terms. The EOR also confirms that the proposed salary meets the national minimum wage of MKD 21,850 per month for full-time work.

Step 2: EOR Compliance Check

The EOR verifies that your proposed terms comply with the Labour Relations Law, which sets a maximum regular working week of 40 hours and caps overtime at eight hours per week. The EOR confirms that the role is correctly classified as an employment relationship rather than a service contract, as misclassification carries penalties from the State Labour Inspectorate (Државен инспекторат за труд). The EOR also reviews any applicable collective agreement to ensure proposed salary, benefits, and notice periods meet or exceed negotiated standards.

Step 3: Employment Contract

The EOR prepares a written employment contract in Macedonian, the official language of North Macedonia, as required by the Labour Relations Law. The contract must include mandatory clauses on job description and place of work, salary and payment method, working hours and rest periods, annual leave entitlement (which is at least 20 working days per year), and the duration and terms of the probation period (which cannot exceed six months). For indefinite-term contracts, the contract must state that it is concluded for an indefinite period. For fixed-term contracts, the Labour Relations Law permits a maximum duration of four years, including renewals, after which the contract automatically converts to indefinite. The probation period cannot exceed six months for any employee.

Step 4: Government Registrations

Once the employee signs the contract, the EOR registers the employment with the Employment Service Agency within eight days of the start date, as mandated by Article 7 of the Labour Relations Law. The EOR also registers the employee with the Public Revenue Office for tax and social contribution purposes, submitting the M1 form to notify the tax authority of the new employment relationship. Late registration exposes the EOR to administrative fines from the State Labour Inspectorate, which can range from MKD 15,000 to MKD 50,000 depending on the severity and duration of the delay. The EOR ensures all registrations are completed before the employee begins work to avoid penalties.

Step 5: Payroll in Local Currency

The EOR pays the employee in Macedonian denar (MKD) on the agreed schedule, typically monthly. The EOR calculates gross salary, withholds personal income tax at the applicable rate (10% for income up to three times the average annual salary and 18% on income exceeding that threshold), and deducts employee social contributions totalling 28.5% of gross salary (pension and disability 18.8%, health 7.5%, unemployment 1.2%, and additional health 1%). The EOR also pays employer social contributions totalling 27.9% of gross salary to the Public Revenue Office. The EOR remits all withheld taxes and contributions to the Public Revenue Office by the 15th of the month following the payment month.

Step 6: Ongoing Compliance

The EOR files monthly M2 forms with the Public Revenue Office, reporting all salaries paid, taxes withheld, and social contributions remitted for each employee. The EOR submits quarterly and annual tax reconciliation reports to the Public Revenue Office, ensuring that all personal income tax and social contributions are correctly declared. The EOR maintains compliance with the Labour Relations Law's requirements on working time records, annual leave tracking, and overtime caps, which are subject to inspection by the State Labour Inspectorate. The EOR monitors changes to the national minimum wage, collective agreement updates, and amendments to tax or social security rates, implementing any changes in payroll and contract terms. The EOR also ensures compliance with the Law on Personal Data Protection, which aligns with EU GDPR principles and requires lawful processing of employee personal data.

Step 7: Termination

The Labour Relations Law permits termination of indefinite-term contracts only on specified grounds: business reasons (redundancy or economic necessity), employee incapacity or unsuitability, or serious breach of duty by the employee. The EOR must provide written notice specifying the ground for termination and offering the employee an opportunity to respond. Notice periods are set by collective agreements where applicable, but the statutory minimum is one month for employees with less than five years' service, two months for five to ten years, and three months for over ten years. Severance pay is mandatory for redundancy terminations: the employee is entitled to one-third of average monthly salary for each year of service, capped at the equivalent of eight average monthly salaries in North Macedonia. The EOR calculates severance based on the employee's average gross salary over the last 12 months and issues the payment with the final payslip. The EOR notifies the Employment Service Agency of the termination and issues a certificate of employment (working booklet entry) as required by law.

Employment Laws and Compliance an Employer of Record Handles in North Macedonia

When you hire through an Employer of Record in North Macedonia, the EOR assumes full responsibility for compliance with the Labour Relations Law, tax regulations, and social security obligations. This means you do not need to build an in-country HR function or navigate the administrative requirements of the Employment Service Agency, Public Revenue Office, or State Labour Inspectorate.

• Employment Contracts: The EOR prepares and issues written contracts in Macedonian containing all mandatory clauses required by the Labour Relations Law, including job description, salary, working hours, annual leave, probation period, and notice terms. Failure to provide a written contract within eight days of the start date exposes the employer to fines from the State Labour Inspectorate ranging from MKD 15,000 to MKD 50,000. The EOR ensures every contract complies with statutory minimums and any applicable collective agreement.
• Payroll Tax and Income Tax Withholding: The EOR withholds personal income tax from each employee's gross salary at the rates set by the Law on Personal Income Tax: 10% on income up to three times the average annual salary and 18% on income exceeding that threshold. The EOR remits withheld tax to the Public Revenue Office by the 15th of the month following payment. Late or incorrect withholding results in penalties, interest charges, and potential liability for the full tax amount plus administrative fines.
• Social Security and Pension Contributions: The EOR calculates and remits both employee contributions (28.5% of gross salary) and employer contributions (27.9% of gross salary) to the Public Revenue Office, covering pension and disability insurance, health insurance, unemployment insurance, and additional health contributions as mandated by the Law on Mandatory Social Security Contributions. The EOR submits monthly M2 forms and ensures that all contributions are paid by the 15th of the following month. Non-payment or late payment triggers interest penalties and can result in the employee losing access to healthcare or pension accrual.
• Statutory Leave Entitlements: The EOR tracks and administers annual leave (minimum 20 working days per year under the Labour Relations Law, with additional days for long service or hazardous work), public holidays (13 national holidays in North Macedonia), sick leave (paid by the Health Insurance Fund after the first 30 days paid by the employer), and maternity leave (nine months paid by the Health Insurance Fund). The EOR ensures that leave is correctly accrued, taken, and compensated in accordance with the law and any applicable collective agreement.
• Termination and Severance: The EOR manages termination procedures in compliance with the Labour Relations Law, which requires a written notice specifying the ground for termination, a minimum notice period (one to three months depending on tenure), and severance pay equal to one-third of average monthly salary per year of service for redundancy dismissals. The EOR calculates and pays severance, issues the final payslip, and notifies the Employment Service Agency. Wrongful termination exposes the employer to reinstatement orders or compensation awards equivalent to six to twelve months' salary, depending on the employee's tenure.
• Working Time and Overtime: The EOR ensures compliance with the Labour Relations Law's limits on working time: a maximum of 40 hours per week and eight hours of overtime per week. The EOR calculates overtime pay at 135% of the regular hourly rate for the first eight hours and 150% for work on public holidays or rest days. The EOR maintains working time records as required by the State Labour Inspectorate, which can inspect records and impose fines for non-compliance.
• Health and Safety: The EOR ensures that you, as the operational employer, are aware of your obligations under the Law on Safety and Health at Work, which requires risk assessments, provision of personal protective equipment, and appointment of a safety officer for workplaces with 20 or more employees. The EOR registers any workplace accidents with the State Labour Inspectorate and the Health Insurance Fund. Failure to comply with health and safety obligations can result in fines and, in cases of serious injury, criminal liability for responsible managers.
• Data Protection and Employee Privacy: The EOR processes employee personal data in compliance with the Law on Personal Data Protection, which aligns with EU GDPR principles and is enforced by the Agency for Personal Data Protection (Агенција за заштита на личните податоци). The EOR ensures lawful processing, obtains necessary consents, and implements technical and organisational measures to protect employee data. Non-compliance can result in administrative fines and orders to cease processing.
• Collective Agreements: The EOR monitors and applies any general or sectoral collective agreements that cover your employee's industry or occupation. Collective agreements in North Macedonia are negotiated between trade unions and employer associations and can set higher minimum wages, longer notice periods, enhanced severance, or additional benefits above statutory minimums. The EOR ensures that employment terms always meet or exceed collective agreement standards where applicable, reducing the risk of employee grievances or trade union disputes.
• Employment Service Agency Reporting: The EOR registers each new employee with the Employment Service Agency within eight days of the start date and notifies the agency of any termination. The EOR also submits annual reports on employment status and contributes to the Employment Fund as required. Late or missing registration can result in fines and, in some cases, invalidation of the employment relationship, which exposes the employer to back-payment claims and penalties.

How Much Does It Cost to Use an Employer of Record in North Macedonia?

When you hire through an Employer of Record in North Macedonia, your total cost has two components: the EOR's service fee and the employer statutory on-costs mandated by North Macedonia law. Statutory on-costs are fixed by legislation and apply to every employer in North Macedonia, whether you use an EOR or operate your own entity. Playroll's EOR service fee starts from $399 per employee per month and is billed separately from the employee's salary and statutory costs.

Let's look at an example that includes a base salary and the EOR service fee.

Playroll's EOR service fee covers preparation of the compliant employment contract in Macedonian, registration with the Employment Service Agency and Public Revenue Office, monthly payroll processing and remittance of all taxes and contributions, ongoing compliance monitoring including changes to minimum wage or collective agreements, termination management including severance calculation and final filings, and access to Playroll's platform for payroll visibility and employee self-service.

Employer of Record vs Setting Up an Entity in North Macedonia

The choice between an Employer of Record and setting up your own entity in North Macedonia depends on your hiring plans, budget, and timeline. Foreign companies typically establish a limited liability company (друштво со ограничена одговорност, or DOO) to create a permanent presence in North Macedonia. Registering a DOO requires filing with the Central Registry of North Macedonia (Централен Регистар), appointing a local director or authorised representative, opening a corporate bank account, and depositing minimum share capital of MKD 5,000 (approximately $100), with realistic setup costs ranging from $3,000 to $6,000 including legal and notary fees. The entire process takes six to ten weeks from initial filing to operational status.

For companies hiring fewer than ten employees in North Macedonia, an Employer of Record is almost always the faster and more cost-effective route.

Playroll also supports your long-term growth through its Global Entity Setup product, which handles entity incorporation and local payroll in 120+ countries so you can transition from EOR to your own compliant entity in North Macedonia when the time is right, without switching providers or rebuilding your HR processes.

How Long Does It Take to Hire Someone in North Macedonia Through an Employer of Record?

The typical timeline to onboard an employee in North Macedonia through an Employer of Record is 10 to 15 business days from offer acceptance to the employee's first working day.

• Stage 1: Contract preparation and signing (2 to 4 business days): The EOR drafts a compliant employment contract in Macedonian containing all mandatory clauses required by the Labour Relations Law, including job description, salary, working hours, probation period, and notice terms. The employee reviews and signs the contract, and both you and the EOR countersign. Timing depends on how quickly the employee returns the signed contract and whether any negotiation on terms is required.
• Stage 2: Government registrations (3 to 5 business days): The EOR registers the employment with the Employment Service Agency and the Public Revenue Office, submitting the M1 form to notify the tax authority. The Labour Relations Law requires the Employment Service Agency registration within eight days of the start date, but best practice is to complete it before the employee begins work. Missing the eight-day deadline exposes the EOR to fines from the State Labour Inspectorate and can delay access to social security benefits for the employee.
• Stage 3: Payroll configuration and first cycle (2 to 3 business days): The EOR configures the employee in its payroll system, setting up tax withholding, social contribution deductions, and bank details for salary payments. North Macedonia employers typically pay salaries monthly, with payroll processed by the end of the month for work performed in that month. The employee's first payslip arrives at the end of their first full month of employment, with all taxes and contributions remitted to the Public Revenue Office by the 15th of the following month.
• Stage 4: North Macedonia-specific requirements (1 to 3 business days): If the employee works in a sector covered by a collective agreement, the EOR may need to confirm membership status or register with the relevant employer association, which can add one to three business days. If the employee requires a work permit (for non-EU/EEA nationals without a residence permit), the process takes significantly longer and involves the Ministry of Interior and the Employment Service Agency, but this is rare for EOR arrangements where the employee is typically already authorised to work in North Macedonia. Most of these tasks can run in parallel with contract preparation and government registrations.

The timeline can extend if the employee requests changes to the contract that require your approval, if the Employment Service Agency experiences processing delays during peak registration periods (typically January and September), or if the employee's documentation (such as tax identification number or bank account) is incomplete or requires correction. For employees who are not already resident in North Macedonia or who lack a tax identification number, adding five to ten business days for document acquisition is realistic.

This timeline compares favourably to setting up your own entity in North Macedonia, which takes six to ten weeks from initial registration with the Central Registry to being operationally ready to employ staff.

How Playroll's Employer of Record Process Works in North Macedonia

Playroll's Employer of Record service in North Macedonia is built to get your employee onboarded quickly while ensuring full compliance with the Labour Relations Law, tax regulations, and social security obligations.

1. You define the role and employment terms

You provide the job title, responsibilities, salary, start date, and any other terms you have agreed with your chosen candidate. Playroll's team reviews your proposed terms against North Macedonia's minimum wage (MKD 21,850 per month), working time limits, and any applicable collective agreement to confirm everything meets statutory and sector-specific requirements.

2. Playroll prepares a compliant employment contract

Playroll drafts a written employment contract in Macedonian that includes all mandatory clauses required by the Labour Relations Law: job description and place of work, salary and payment terms, working hours and rest periods, annual leave entitlement, probation period (maximum six months), and notice and termination provisions. The contract is sent to your employee for signature, and once signed by all parties, it becomes the binding legal document governing the employment relationship.

3. Your employee is onboarded and payroll goes live

Playroll registers the employment with the Employment Service Agency and the Public Revenue Office within the required eight-day window, ensuring compliance with Labour Relations Law registration deadlines. Your employee can start work within 10 to 15 business days of contract signature. Playroll processes payroll monthly, calculates and withholds all taxes and social contributions, and pays your employee in Macedonian denar by the agreed date.

4. Playroll manages ongoing compliance and supports your growth

Playroll files monthly M2 forms with the Public Revenue Office, remits all employer and employee contributions by the 15th of each month, tracks changes to minimum wage and collective agreements, and monitors updates to the Labour Relations Law and tax regulations. If your hiring in North Macedonia grows to the point where establishing your own entity makes sense, Playroll's global entity setup service can incorporate your DOO, set up compliant local payroll, and transition employees from EOR to your own entity without switching platforms or providers.