Employees’ gross income includes all cash remuneration and most personal expenses (including PIT and social security contributions) paid by the employer.
The following types of income are considered as employment income:
- Salaries or compensation generated in accordance with regulations governing labour.
- Earnings on the basis of fees paid in addition to salary, above the amount set by the PIT Law.
- Reimbursement of costs for business trips and accommodation in connection with these trips.
- Relocation expenses.
- Reimbursement for the use of one’s own vehicle for business purposes exceeding the non-taxable threshold set by the PIT Law.
- Earnings of members of representative and executive bodies of the state or local administration.
- Earnings of members of assemblies, managing boards, and supervisory boards.
- All other earnings arising from employment and those similar to employment (e.g. temporary and occasional work).
Employees’ gross income also includes bonuses paid and any benefits in kind (subject to minor exceptions) received as a result of employment.
Pursuant to the legislation of Montenegro, specific employee remunerations are not taxable up to a specified cap (e.g. certain redundancy payments, solidarity help).
The last amendments to the PIT Law stipulate that meal allowance, holiday allowance, and transportation to and from work compensation are taxed in full.
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