a) “Employer” shall include all natural and legal persons employing others, with or without contract.
Obligations of the employer:
In support of the Labour Code, the employer is obliged to:
a) sign an employment contract with the full time employee and the part time employee;
b) keep records for employment periods and amounts paid to full time or part time employees;
c) insure every employee, working either full time or part time, starting from the date of commencement of work, as defined in the employment contract, or letter of appointment;
d) calculate, declare and pay compulsory social and health insurance contributions within the time limits specified for each employee.
Which wage is the social and health insurance contribution calculated upon?
The gross wage of employees is determined under the Decision no 285, date 04/05/2007 “On the Reference Wages”. The reference wages are determined in this Decision by:
a) District where the economic activity is carried out;
b) Type of economic activity;
c) Work position;
d) Calculation of contributions for each employee is based on the gross wage above the minimum monthly wage up to the maximum monthly wage. The gross wage is provided in the standard payroll format, which is the basic document for the identification of individual contributions.
e) The minimum monthly base wage of employees for the purpose of compulsory social and health insurance contributions changes.
Where and how you can register to start an economic activity:
Before starting an economic activity, and to the effect of paying social and health insurance contributions, you first register to the National Registration Centre (NRC). Two days following the registration to the NRC, the list of employees is submitted to the tax office, together with relevant wages, included in the form E-SIG 027/a “List of first time employees, re-employed employees, and job leavers”.
Procedure and deadlines for social and health insurance contributions payment:
a) Payment of compulsory social and health insurance contributions is an obligation of the employer under the terms established by law. The basic payment documents are attached to the Annex of this Handbook;
b) The employer has a legal obligation for the calculation, declaration, and payment of contributions at exact amounts, in time. The payroll is a statement issued by the entity describing individual contributions;
c) An employer who has not declared the newly employed persons to the tax office, shall pay fines for each case;
d) The employer shall regularly submit, according to the deadline determined, the payrolls, which represent the only document proving payment of contributions for each employee;
e) Payroll is the basic document for the award and calculation of benefits for each employee as well as issuance of certificates required.
How are employees provided with contributions booklets:
a) Social Insurance Institute provides social and health insurance contributions booklets for employers, upon their requests made to social insurance agencies;
b) The employer provides social and health insurance contributions booklets for employees, and fills them out on monthly basis, on the wage payment date.
How to deal with short-term benefits:
a) Based on the Social Insurance Law, employers must calculate and pay short-term benefits, both in respect of sickness and maternity;
When an employee is sick, or taking care of a sick depending child, and this is certified by a medical certificate, the social and health insurance contributions shall, up to the 14th day of certified sick leave, be stated as if the employee has not been sick, and get paid according to the provision of the Labour Code. From the 15th day of the certified sick leave, the insured employee shall be entitled to sickness benefit to be covered with the social insurance funds.
What to do to start a new business?
Where to get registered if I want to start a new business?
- Prior to starting an economic activity and to effect payment of social and health insurance contributions, you must first register with the NRC. Afterwards, you need to present to the Social Insurance Agency a copy of the identification certificate of the taxable person. The Social Insurance Agency, based on this document, executes your registration with social insurance.
- The self-employed two days after registration with the NRC submits to the relevant tax office the list of the unpaid family workers who he/she works with and cohabits, the form E-SIG 027/a “Declaration on employees, those with first-time job, newly hired, and the job leavers.”
How are contributions calculated?
a) The self-employed and unpaid family members exercising an economic activity shall be compulsorily insured in respect of maternity, pensions and health;
b) The personal social and health insurance contributions as well as contributions for the unpaid family workers over 16 years of age (living and working with the self-employed) shall be calculated upon the minimum monthly wage;
Which are the time terms of contributions payment?
a) The social and health insurance contributions are paid on quarterly basis;
b) Attention: If contributions are not paid in time, penalties are applied.
Where and how can contributions be paid?
a) You can pay the compulsory social and health insurance contributions to the second level bank branches or to the Albanian Post;
b) After the payment of social and health insurance contributions you and the family members you are sharing work together will be provided with a social and health insurance contributions booklet by the Social Insurance Agency.
Documents required for payment of contributions:
As regards payment of contributions, you should first get and fill out templates as in the following:
- “Social and health insurance payroll as well as employment income tax” – E-SIG 025/a2, placed only on the back page of the completed template’s third copy relating the declaration and payment of the social and health insurance contributions.
- “Declaration template for the social and health insurance contributions payment”
– E-SIG 011-012/a, completed in triplicate.
In addition to the mentioned templates, they also provide guidelines how to fill them out (i.e. instructions on completion of the payroll and instructions on completion of the social and health insurance contributions declaration and payment template). It is the payroll to be initially filled out, and then based on its data you ought to complete the three declaration templates.
Large business entities:
– Template E-SIG 025/a.1 – “Social and health insurance contributions payroll and employment income tax”.
– Template E-SIG 027/a – “Declaration on the employees; those with first-time job, the recently hired, and the job leavers”.
– Template E-SIG 011-012/a “Social and health insurance contributions payment declaration template”, to be completed in two copies, and then submitted to the bank branches or Albanian Post offices; once the amount paid is confirmed, they sent a copy to the taxpayer and the other one to the tax office.
Small business entities:
– Template E-SIG 025/a.2 – “Social and health insurance payroll and employment income tax”, placed on the back of the third copy of the declaration template.
– Template E-SIG 027/a – “Declaration on the employees; those with first time job, the newly hired, and job leavers.
– Template E-SIG 011-012/a – “Social and health insurance contributions payment declaration”, to be completed in three copies, submitted to the bank or post offices.
Attention: The template of contributions declaration and payment, as well as the payroll and other declarations must be completed in accordance with the relevant notes to each of them. A copy of the declaration form is withdrawn to the tax offices by the entities, or downloaded from the official website of the General Tax Department: www.tatime.gov.al, for each tax period, before the declaration date.
These templates are available and could be downloaded from the official website of the General Tax Department: www.tatime.gov.al. Practical steps that may help to get and print these forms are:
– First you need to log on Taxation, using the above address, and see on the left side the box – Electronic Services, where you must click on the note – download declaration templates. The page displayed requires the NIPT, and therefore you will enter by clicking on the box. Once you are logged in on this box, you will insert the NIPT, and then just click on the right the OK;
– The display will be “For all taxpayers”, and then you ought to click on the right to the “Declaration on the Insurance”, which is followed by the “Social and health insurance contributions payment declaration”, which should be printed in three copies;
– To the back of one copy, you should include the payroll, according to the template approved;
– But first, you should find the template the “Social and health insurance payroll, and employment income tax”.” As regards this, after having printed the declaration in three copies, the document closes and you are back to the previous page “For all taxpayers” where in the last sentence of the notes you will find the word “here”. Once you click on this note, it appears the template “Social and health insurance payroll, and employment income tax.”
– Be careful as you print the payroll, because it should be printed on the back of the declaration template. Thus, the declaration template should enter the printer with the letters upwards; then you print payroll. At the end, there will be a declaration template with the payroll on the back and two declaration templates without the payroll on the back.
Filling out the payroll and the declaration template
Keep the payroll in front of you while you are reading these instructions on how to do it:
– The data will be manually inserted on this template. On top of the payroll, by order, the empty lines will be completed, beginning from NIPT, name and surname, year and quarter, the status (natural entity, without employees), the activity (in most cases it is a sale activity) and the district of activity;
– The self-employed, in the column no 5 “Social Insurance Number”, will insert the Social Insurance Number included in the Identity Card;
– In the column no 6 “Name Surname”, name and surname are put;
– In the column without any number “Position, function, profession or work carried out” there will be put the phrase “Self-employed”;
– In the column nor 7 “Number of employee’s category in respect of contributions”, you put the number 6, and this is the number representing the natural person;
– The column no 8 “Unworked calendar days during the month” relates to employees, and as such it is not to be completed for the self-employed natural person, working on his own;
– The column no 9 “Calendar days during the month worked at the entity” relates to employees and the natural person employed in his/her entity where the number of days of the month are placed, deducting the number of Sundays;
The payroll comprises three consecutive months of the quarter, which are similarly completed as in the first month.
Completion of the format form.
“The form for declaration of social insurance and health care contribution payment”
You have to have in front the payroll and the form for declaration in order to properly complete it. This declaration is completed after the payroll is finished, since the data in this form will be taken from the payroll. Its completion starts after the note General Declaration.
Conditions for Insurance
Based on Law 7703 date 11.5.1993 “On Social Insurance in Republic of Albania”, changed, and in the DCM No. 1114 date 30.7.2008, the person entering the compulsory scheme of social insurance to be insured as self-employed in agriculture must fulfill these conditions:
- To be 16 years old;
- To be able for work;
- Each person can be insured until the retirement age;
- It should not be insured from other sectors of employment;
- The self-employed in agriculture must:
-Live in the same sub region where the possessed land is located and to have agricultural and breeding activities.
-To live in the village, even though the land is located in the neighbour sub region
- Social insurance contribution payment:
- The insurance as self-employed in agriculture is compulsory.
- The self-employed in agriculture that live in the rural area starting from 1.7.2010 and in the future can pay contributions for social insurance, once in three months, calculated on the annual base amount.
- The self-employed in agriculture that lives in the highlands, from 1/7/2010 and in the future can pay contributions of social insurance, once in three months, calculated in the annual base amount.
- The social insurance and health care contributions payment are paid together. Those are compulsory and are paid individually once in three months.
- The deadline for these payments is not later than the last day of the third month, within each calendar trimester.
- Based on point 6, of the Head IV, of the DCM No 1114 date 30.7.2008, the insurance is permitted as self-employed in agriculture for the current year, independently from the fact that you are not insured for the previous years.
- The insurance must start from the current year and continue in the future years, till the conditions for insurance are reached.
- To pay contributions for the past periods, the calculation is done by the contribution amounts of the respective years, on which the respective fines are applied.
Benefits that derive from the compulsory scheme of social insurance of the self-employed in agriculture
- The low amounts of the contributions payments for social insurance, as result of the state favorable policies.
- Work history benefit, where periods for which contributions are paid is recognized as work history in working relation with the state.
- The self-employed in agriculture after reaching the conditions under the Law 7703 date 11.5.1993 “On Social Insurance in the Republic of Albania” amended, is beneficiary based on the case:
-Old age base pension
-Partial old age pension
-Reduced old age pension
-Partial invalidity pension
-Compensation for child birth
-Maternity income, that is equal to the amount of contributions paid from 1/10/93-30/3/2010, 16 years and 3 months
Documents and procedures for insurance as self-employed in agriculture.
The self-employed in agriculture presents to the social insurance inspector of self employed in agriculture the following documents:
-The family certificate released by the civil status office;
-The land ownership certificate released by the real estate office of the commune and municipality;
-Notaries Act, confirming the alienation of property (p.sh, rental)
– In any case, for the insurance periods of the current year and for previous periods, will be presented a certificate issued by the commune, which states that the person exercises, agricultural / livestock.
- Inspector of the self-employed in agriculture, after judging the fulfilment of the requirements for insurance as self-employed in agriculture fills the document type “Execution Order”.
- To make the payment, this document is presented to the post office or the bank office. After the payment the post office releases the document “receipt”, while by paying in the bank office is released the document “cash receipt” which confirms the payment.
- With the “receipt” or “cash receipt” the person is presented for registration at the insurance inspector for the self-employed in agriculture, where he/she has received the “Execution Order”.
- This documents should not, whatsoever, be given to the social insurance employees. Those are personal.
- At the end of the procedure the social insurance contribution’s payment is issued the compulsory contributions booklet of social insurance and health care.
For the Self-Employed in Agriculture
- In highlands there are included the self-employed in agriculture, those who live and have their activity in Bulqizë, Dibër, Gramsh, Has, Kolonjë, Kukës, Librazhd, Malësi e Madhe, Mat, Mirditë, Pukë, Skrapar, Tepelenë and Tropojë.
- In the lowlands there are included the self-employed in agriculture that live and have their activity in the regions of Berat, Kuçovë, Durrës, Krujë, Elbasan, Peqin, Fier, Lushnjë, Mallakastër, Gjirokastër, Përmet, Korçë, Pogradec, Devoll, Lezhë, Laç, Shkodër, Tiranë, Kavajë, Vlorë, Sarandë and Delvinë.