The number one employee benefit people in Macedonia care about is disability, because disability itself is seen by employees as a high-risk. When Macedonian employees are asked to rank other benefits they prefer they are likely to say health insurance, retirement and life insurance.
In Macedonia employers should start with personal accident insurance. Only then should you look at other employee benefits to be provided.
For employer sponsored benefits you can expect to pay between 100 and 300 Denars.
Mandatory employee benefits in Macedonia include pension insurance, health insurance, paid time off including maternity leave and benefits, professional disease insurance and employment insurance. Supplementary employee benefits in Macedonia Include formal education and non-formal education benefits, retirement, managerial insurance, private health insurance, and sport and leisure activities. Offering employee perks is not common practice in the country.
Mandatory Employee Benefits in Macedonia
The pension insurance system of Republic of North Macedonia is a multi-pillar pension system. It is structured this way:
- Mandatory State organized I (first) Pillar defined by the Law on Pension and disability pension insurance that requires all the employed persons to be registered and defined as pension contributors. The System is led by the State Fund for pension and disability insurance. The date of Funds’ entry is related to the date of the first employment, a record that is acquired and maintained by the Agency of Employment. The insurance type is a pay as you go system and by Defined Benefit Scheme, determined by the:
- Volume of the pension contribution
- Replacement rate, that is defined in relation to the employment period and the time of retirement and amounts up to max. 80% of the earnings in the total period of employment
- Length of the insurance period
- Type of working time(full/part time job), namely 40 hours/20 hours (or less) per week
The pension benefit is related to the retirement age of 62 years for women and 64 years for men, while the Law offers possibility for optional (upon employee request) late retirement at age of 67 (both for women and men) and minimal employment period of 15 years.
- Mandatory II (second) Pillar, defined as defined contribution pension Plan, mandatory for all the employees that had formally started their employment after 1.1. 2003 and are registered by the Fund for pension and disability insurance and voluntary for the employees employed prior to 1.1.2003 (this category of insured persons had got in 2019 the right to re-define their status by remaining in the combined Pension System or to swing to the I Pillar, as one time irrevocable decision). The II Pillar is also mandatory for all the new first time employees after 1.1.2019 which at the date of their first employment are younger than the age of 40 years. The retirement age is linked to the previously stated for the I Pillar, thus offering combined pension for this category of pension insured employees. The mandatory II Pillar is organized by current three Pension Funds that operate as an open investments Funds, with one portfolio for all the contributors and without particular guaranties for RoR. The System is supervised by the independent Regulatory Body (MAPAS) responsible to the National Assembly of the country. The number of the members of the I+II Pillar is 87% of the integral total pension system contributors (as of 1.1.2020, MAPAS Annual 2019 Report)
- Voluntary III (third) Pillar, defined as voluntary defined contribution Plan, offering possibilities for additional individual pension savings accounts and professional pension savings schemes, predominantly for the Professional pension Schemes, currently used by the medium and large size mainly foreign companies (FDI) as an instrument for managers and employees rewards, work stimulation as well as for their retention. Membership at the III Pillar is possible for foreigners and is not conditioned to the employment and membership at the mandatory I and II Pillar.
- Disability pension can be acquired by an employee that has general working disability as well as employee that cannot overcome the disability throughout the professional rehabilitation, defined by the following criteria:
- The disability is caused by the professional disease or working injury, regardless of the length of the pension contribution period
- The disability is caused by an injury or disease outside of the work place, if the employee prior to the disability is older than 45 years of age and has at least 12 years of pension contribution period or
- The disability is caused by an injury or disease outside of the work place, and the employee has 30 to 37 years of age, has pension contribution for at least 30% of the working period, or if the employee has 37 to 45 years of age and has pension contribution period covering 40% of its working period.
- According to the Laws, the legal contributor is the employed person. However, the calculation and the payment of the pensions at the integral pension system, namely for pension contributors for the I Pillar (mainly older employees) and for the contributors to the combined I+II Pillar System (majority of the employees), is done by the employer, on a gross wage, declared, confirmed and accepted by the Public Revenue Office (PRO). The same procedure applies for the rest of the social contributions (described below). The gross wage must be paid to PRO by 15th in the month, while the employees receive the net wage, and the social contributions are transferred to the respected Funds by the PRO.
- The pension contribution rate is defined by the Ministry of Finance and is set as total of 18.8% of the gross wage. For the members only of the I Pillar the total percentage of 18.8% is distributed to the State Pension Fund, while for the members of the combined pension system, there is a distribution of the same percentage for contribution in proportion of 12.8% for the I Pillar and 6% for the II Pillar. However, the latter is distributed as a back office process at PRO and MAPAS, while the employer calculates and pays the total of 18.8%
- The employees working at the positions with hazardous and arduous jobs has benefits of extended length of service that allows early retirement, by different categories and in relation to the work complexity. These category of employees are mandatory members of the I Pillar, regardless if the age and the employment period.
- Within the system, the two limits exists for the calculation of the social contributions. The minimal base for the contribution calculation is set as the 50% of the average salary paid in January for the current year (448 Euros, January 2020, State Statistical Office). However, the maximum level exists, set at 16 times of the averages salary paid in January for the current year. Above the defined maximum level, the employer do not calculate and pay the social contributions (pension, health, professional illness and employment insurance), however the personal tax is payable at 10% of the gross wage.
- As a result of the all above stated, the employees that are contributors to the I Pillar are awarded to a mandatory pension ranging from the minimal of 150 Euros(regardless of the contributions and the amount of the salaries), average pension of all categories almost 250 Euros till the maximum pension of roughly 700 Euros for marginal group of pensioners. The combined pension are yet to be delivered, and would be consisted of the defined benefit I Pillar part(up to 40% replacement rate) and the rest depending on the time of the capitalization and the RoR of the invested assets.
The health insurance for the employees is consisted by the mandatory health insurance, defined by the Law on health insurance. As integrative part of the social contributions, regardless of the fact that the individual employees are defined as contributors, the employers are calculating and paying the health contribution on behalf of the employee. Same as with the pension contribution, the contribution is paid on the gross wage, respecting the minimal and maximum base for the social contribution calculation. Currently it is set at 7,5% of the gross wage for the employee. The transfers are directed to the Fund for Health insurance as the State organized and led system of public health. The average monthly contribution for the Health Fund was 33 Euros (Health Fund 2019 Annual Report). The health contributors can contribute and cover the health insurance for the members of the family (spouse), dependent till 18 year of age or dependent in process of high education till 26 years of age.
The public health insurance covers all the employees’ needs for primary, secondary and tertiary health care, with individual participation for health service and selected pharmaceutical goods of 20%.
There is a possibility for voluntary and complementary private health insurance for individual/family health coverage within the system of non-life and life insurance industry offered buy 11 non-life companies and 5 life companies (as complementary to the life insurance) that varies in relation to the covered risks and the insured sum.
Paid Time Off
Maternity / Paternity Pay – Maternity Benefits
According to the Law on health insurance, the women have right of benefit for pregnancy/delivery/maternity. The integral benefits are payable to the biological mother (including surrogate mother) for a continuous period of 9 months or 15 months if twins and more are delivered at once.
Upon the Report of the Health Authority, the women can decide to start using the benefit 45 days preceding the expected week of delivery as the period mandatory starts 28 days preceding the expected delivery time. That time is calculated within the 9 month of maternity pay. The benefit is payable at the level of 100% of the wage and are transferred by the Fund of Health Insurance on behalf of the Ministry of Labor and Social Affairs. In addition, if there are objective reasons for early pregnancy absence of work, the period of maternity pay can start as early the Health Fund Specialist Commission confirms the need thus the benefits of 100% of the wage are applied earlier as the 9 month of maternity pay starts with the delivery. In these case, again the benefits are paid by the Fund of Health Insurance on behalf of the Ministry of Labor and Social Affairs.
The women can apply for same benefits in cases of adoption of one child (for nine months) or for more than one children (for a period of 15 months).
If the mother/women decides to return to work earlier, it can be done after 45 days of delivery, in which case she has a right for additional benefit of 50% of the wage not excluding the initial wage.
The benefit for maternity can be transferred to paternity, if decided so, both in case of delivery and adoption of child/children.
As previously stated, the parental leave is declared up to 9 months (for a child) and up to 15 months (for more than one child). Benefits are payable monthly at volume of 100% of the parent last wage, but not exceeding the 4 times of the national average wage for the respective year. The parental leave can be exercised as an unpaid benefit for a maximum of 3 months in a total time frame of 3 years in relation to the need for child/children care and support for growth.
Leave (Relief) for sickness, Professional disease and benefit for travel expenses related to health services
The employees have right for benefit related to particular work leave caused by disease, professional disease and need for health service. The volume of the benefit is set at 75% of the workers 12 month average wage prior to the beginning of the temporary leave, in general cases. The exemptions are applied for cancer diseases when the benefit is 85% of the workers wage and 100% of the workers’ wage in cases of pregnancy/delivery/maternity/paternity cases, injuries at work, professional disease and in periods of blood, tissue and body part donation and transfer.
In cases of care for up to three year child and cases of pregnancy/delivery/maternity/paternity cases, injuries at work, professional disease and in periods of blood, tissue and body part donation and transfer, the benefits are paid by the Health Fund as from the first day of the leave. In all other cases, the benefits for the first 30 days are paid by the employer, while for the rest of the time the Health Fund undertakes the responsibility.
For short time leave of the employees up to 21 days, there are different percentage for salary compensation (benefit) paid by the employer, ranging from 70% to 90%. However, the exempts define above apply consequently in such a cases and the volume of benefit can raise.
For all the cases general and particular conditions apply such as:
- The need of continuity of health insurance status, at least for 6 months
- The obligation for continuous payment of the health contribution (by employer, or by other Institutions according to the Laws) or by maximum delay time of 60 days
- Particular and defined health documentation to be supplied
Professional Disease Insurance
In relation to the employee right for benefit for professional disease, within the same procedure for calculation and payment of the gross salary, the employer pays 0.5% contribution rate of the gross salary for professional disease, as mandatory insurance of the employee for acquiring potential benefit for professional disease confirmed by the procedure involving primary personal physician and doctors from the secondary and tertiary health sector (specialists) integrated in the State Pension Fund Commission for working ability evaluation.
All the employees are mandatory insured in case of unemployment according to the legal provisions. For that purpose, within the same procedure, employer calculates and pays the mandatory employment insurance of 1.2% of the gross salary. The employee benefits in case of unemployment are consisted of:
- Financial benefit
- Support for employment such as training, re-qualification and sub-qualification
- Health insurance
- Pension insurance for a period of 18 months for a person missing such a period for obtaining minimum of 15 years of employment period as a precondition for acquiring age pension
The unemployed person can apply for a benefit if was employed (in different capacities) continuously for 9 months or discontinuously for at least 12 months in a total employment period of 18 months. The volume of the benefit depends on the calculated and paid salaries by the employer i.e. 50% of the average monthly net employees’ salary in the last 24 months, if the person is eligible for benefit up to period of 12 months, as well as for the person that is eligible for benefit for period more than 12 months, the benefit for the first year is set on 50% of the average monthly net employees’ salary and 40% for the rest of allowed period. In all the cases, the maximum amount of the benefit must not exceed 80% of the national wage average, declared for the last available month.
The duration of the benefit can last from 1 month till 12 months depending of the continuity or discontinuity of the employment status, exempt for the insured persons that have opportunity for obtaining the age pension, when the duration can be prolonged to 18 months.
The benefit is transferred by the Agency of employment, as well as the person receives full benefits and rights for health care, particularly the benefits defined above.
Rights for annual vacation and vacation benefit
The employees have mandatory right of vacation, namely minimal 20 working days and maximum 26 working days, if full time employed. For part time employees, the vacation period is 10 days. Additional, up to 7 days, are mandatory for employees for other, planned or sudden events and needs related to family matters, education and defined circumstances. A legally defined benefit for vacation is defined at the level of 40% of average last three month net salary, thus ranging the benefit between 160 and 200 Euros.
According to the Law for work security and health, all the employers are mandatory obliged to undertake several categories of the employees’ health exams at the accredited health institutions, public or private. The health exams are determined by the particular bye-laws and vary from:
- Previous exams
- Periodical exams
- Targeted (focused) exams and
- Systematic exams
The health exams must be done at least once at every 24 months and all the costs are covered by the employer, including the exams for:
- General and detailed anamnesis
- Exams of the various body indices
- Basic blood laboratory exams
- Eye exams
- Audiometric exams
- Spyrometric exams and
Additional payment for overtime
The employees have legal right for additional supplement to the wage and payment related to the cases of over-time work. Precisely, the employees are legally awarded for over-time for additional 35%, night work with 35%, three shift work with 5% and work on Sunday and national holidays with 50%, all of the cases with adequate increase of the daily wage amount.
Supplementary Employee Benefits
Formal education and non-formal education benefits
Following the growing demands for skilled and professional human capital, medium and larger domestic and foreign companies offer Programs for employees’ formal education continuation at Master and Doctoral Studies, nationally and abroad. Moreover, targeted and focused skilled and profiled employees’ demand is met by enrolling employees at the short to medium term non-formal specialist trainings and courses, sponsored by the employers and related to guaranteed working period for the company afterwards. Even though employees’ rights and benefits for continuous education and specialization are defined by the Law on labor relations, they are hardly practiced by the majority of the employers.
Particular and encouragement retirement benefits are not present and developed so far. The only disposable and to very low extent used option is the voluntary savings at the III Pillar, at the individual employees accounts and at the professional pension schemes organized by the large domestic or foreign companies, within the ICT industry, financial corporate sector or larger production companies. However, these options are mainly focused for the employees at the medium and top management positions.
Managerial Insurance and Private Health Insurance
Medium and predominantly larger domestic and foreign corporations, within the ICT, financial and production industry, offers particular managerial insurance as well as health insurance, located at the non-life insurance industry or very few examples of individual or group life insurance benefits.
Sport and Leisure Activities
Very few large domestic and foreign companies are offering employees incentives or sponsored activities for sport and leisure activities within the concepts of organizational health. Existence of internal gymnasium is non present, as well as support for employees healthy behavior is extremely limited, mainly achieved by few examples of gym centers in the companies or partial involvement in the CSR and humanitarian orientated sport events such as skiing events, marathons etc.
Previously present employees’ financial benefit for food and travel expenses was abolished in 2008 and such a transfers were included in the employees’ gross salary. However, the foreign production companies located at the Technological Industrial Development Zones (TIDZ) and larger domestic and foreign financial and ICT companies offer employees either free catering or discounted prize canteens and food/beverages corners.
At particular companies which functioning determines distant travel, the employees are mandatory offered and organized a transport or additional wag benefit should be arranged, if transport is not arranged.
Voluntary Employee Benefits
In practice the major companies used accident and disability insurance for their employee, which is not mandatory, but it’s most often applicable, covering following perils:
- Accidental death
- Death from disease
- Permanent disability
- Daily allowance costs
- Treatment costs
Common perks offered in Europe are not typical in Macedonia. However, there are current incentives for designing, developing and starting programs for improving the country’s human capital and in particular employees’ benefits and perks. The presence of such innovative, sustainable and effective models could be seen as a strong competitive advantage for multinational employers.