Methodology - Montenegro (2026)

Educational model - not a Tax and Customs Administration assessment, not a tax return, not tax advice.

Employee (zarada)

Salary income tax is progressive on the gross salary (Europe Now reform): 0% up to EUR 700/month, 9% on the EUR 700-1,000 slice, and 15% above EUR 1,000/month. The tax base is the gross salary itself, not gross minus contributions.
A municipal surtax (prirez) is charged on the income tax amount: 13% in most municipalities, 15% in Podgorica and Cetinje. The surtax reduces take-home pay because the employee bears it on the PIT.
Employee social contributions on the gross salary: pension and disability (PIO) 10% (cut from 15% by Europe Now 2) + unemployment 0.5%. The employee health contribution was abolished by the original Europe Now reform.
Out of scope: the trade-union and Chamber of Economy quasi-charges, non-resident specifics, and whole-cent payroll rounding nuances.

Bookkeeping regime (vodjenje poslovnih knjiga): income tax is progressive on the annual taxable profit (revenue minus deductible expenses) on the same schedule as salary (0% up to EUR 8,400, 9% to EUR 12,000, 15% above), with the municipal surtax 13%/15% on the tax. Contributions PIO 10% + unemployment 0.5% on a base defaulting to the profit, floored at the average wage and capped at the PIO ceiling.
Lump-sum regime (pausalno oporezivanje): available when prior-year turnover does not exceed EUR 30,000. Both the tax and the contributions are charged on a notional income set by the tax authority; this engine treats it as an explicit input defaulting to the contribution-base floor.
The capital-municipality toggle (Podgorica/Cetinje) raises the surtax on the income tax from 13% to 15%.
Out of scope: VAT, the trade-union and Chamber of Economy quasi-charges, the excluded-profession list, and partial-year activity.