During 2026, the minimum wage in Kosovo will increase in two phases:
- €425 gross starting from January 1
- €500 gross starting from July 1
This increase will affect a broad number of employees and will have a direct impact on companies’ financial structures. For this reason, employers should plan carefully and take several preparatory steps in advance.
Budget Planning for 2026
The increase in the minimum wage will raise overall labor costs. Companies should calculate the additional expense as early as possible, especially in sectors with a high number of lower-paid positions. Early budgeting helps avoid unexpected financial pressure during the year.
Updating Employment Contracts
Existing employment contracts that provide salaries below the new legal minimum must be adjusted in a timely manner. The most practical approach is to complete these updates before the first phase of the increase comes into force, ensuring full legal compliance.
Adjusting Payroll and Salary Systems
Payroll systems, tax calculations, social contributions, and monthly reporting to the Tax Administration and the Pension Trust must be updated accordingly. Proper alignment helps prevent administrative errors, delays, and potential penalties.
Reviewing the Company’s Salary Structure
An increase in the minimum wage often has a ripple effect on other salary levels. Employers may need to reassess their internal wage structure to maintain balance, fairness, and staff motivation across different roles.
Informing Employees
Transparent communication is essential to avoid confusion and misunderstandings. Employees should be clearly informed about the timelines, the changes involved, and how the minimum wage increase will affect their salaries.
The 2026 minimum wage increase represents not only a legal obligation but also a strategic moment for companies to review their payroll policies and financial planning. Proactive preparation will help businesses remain compliant, financially stable, and supportive of their workforce during this transition.