[Updated 3/27/23] 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.
For employer sponsored benefits you can expect to pay between 100 and 300 Denars.
Mandatory employee benefits in Macedonia include pension, health, paid time off (including maternity leave and benefits), professional disease, and employment insurance. Supplementary employee benefits in Macedonia include formal education and non-formal education benefits, retirement, managerial insurance, private health insurance, and sports and leisure activities. Offering employee perks is not common practice in the country.
Mandatory Employee Benefits in Macedonia
The pension insurance system of the 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 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:
- The volume of the pension contribution
- Replacement rate, which 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 the possibility for optional (upon employee request) late retirement at age of 67 (both for women and men) and a minimum employment period of 15 years.
- Mandatory II (second) Pillar, a defined contribution pension plan, is mandatory for all 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 who at the date of their first employment are younger than the age of 40 years. The retirement age is linked to the previously stated I Pillar, thus offering a combined pension for this category of pension-insured employees. The mandatory II Pillar is organized by the current three Pension Funds that operate as an open investments fund, with one portfolio for all the contributors and without particular guarantees for RoR. The System is supervised by the independent Regulatory Body (MAPAS) responsible to the National Assembly of the country. The number of 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 a voluntary defined contribution plan, offers possibilities for additional individual pension savings accounts and professional pension savings schemes, predominantly for the Professional pension Schemes, currently used by 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 employment and membership at the mandatory I and II Pillar.
- Disability pension can be acquired by an employee that has a general working disability as well as an employee that cannot overcome the disability throughout the professional rehabilitation, defined by the following criteria:
- The disability is caused by a 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 workplace 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 workplace, and the employee has 30 to 37 years of age, has a 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 law, 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 to the rest of the social contributions (described below). The gross wage must be paid to PRO by the 15th of 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 a total of 18.8% of the gross wage. For the I Pillar members 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 the 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 a total of 18.8%
- The employees performing hazardous and arduous work receive an extended length of service status that allows early retirement by different categories and in relation to the work complexity. These employees are mandatory members of the I Pillar, regardless of their age and employment period.
- Within the system, two limits exist for calculating social contributions. The minimal base for the contribution calculation is set as 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 the average salary paid in January for the current year. Above the defined maximum level, the employer does 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, employees that are contributors to the I Pillar are awarded a mandatory pension ranging from a minimum of €150 (regardless of the contributions and the amount of the salaries), the average pension of all categories is almost €250 up to the maximum pension of roughly €700 for a marginal group of pensioners. The combined pension is 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.
Health insurance for employees consists of the mandatory health insurance defined by the law on health insurance. As an integrative part of 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. As is with the pension contribution, this 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 (Health Fund 2019 Annual Report). The health contributors can contribute and cover health insurance for the members of the family (spouse), dependent until 18 or dependent in process of high education until 26.
Public health insurance covers all the employees’ needs for primary, secondary, and tertiary health care, with individual participation in health services 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 the non-life and life insurance industry. This product is offered by 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, women have the right to benefit for pregnancy/delivery/maternity. The integral benefits are payable to the biological mother (including the 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 months of maternity pay. The benefit is payable at the level of 100% of the wage and is 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 as the Health Fund Specialist Commission confirms the need thus the benefits of 100% of the wage are applied earlier as the 9 months of maternity pay starts with the delivery. In these cases, 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 the same benefits in cases of adoption of one child (for nine months) or for more than one child (for a period of 15 months).
If the mother/woman decides to return to work earlier, it can be done after 45 days of delivery, in which case she has a right to an 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, parental leave is declared for up to 9 months (for a child) and up to 15 months (for more than one child). Benefits are payable monthly at the volume of 100% of the parent’s last wage, but not exceeding 4 times 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
Employees have the right to benefits related to particular work leaves caused by disease, professional disease, and need for health services. The volume of the benefit is set at 75% of the workers’ monthly 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 worker’s wage and 100% of the worker’s 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 caring for a child 3 years and younger, cases of pregnancy/delivery/maternity/paternity cases, injuries at work, professional disease, and in cases 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-term leave up to 21 days, there is a different percentage for salary compensation (benefit) paid by the employer, ranging from 70% to 90%. However, the exemptions defined above apply consequently in such cases and the volume of benefits can increase.
For all cases, general and particular conditions apply:
- The need for continuity of health insurance status, at least 6 months
- The obligation for continuous payment of the health contribution (by the employer, or by other institutions according to the laws) or by the maximum delay time of 60 days
- Particular and defined health documentation must be provided
Professional Disease Insurance
In relation to the employee’s right to professional disease benefits, within the same procedure for calculation and payment of the gross salary, the employer pays a 0.5% contribution rate of the gross salary for professional disease, as mandatory insurance for 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 into the State Pension Fund Commission for working ability evaluation.
All employees are mandatorily insured in case of unemployment according to the legal provisions. For that purpose, within the same procedure, the 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 a minimum of 15 years of employment period as a precondition for acquiring an 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 benefits up to a period of 12 months, as well as for the person that is eligible for the benefit for a 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 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 to 12 months depending on the continuity or discontinuity of the employment status, exempt for the insured persons that have the 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 the mandatory right of vacation, namely a minimum of 20 working days and a maximum of 26 working days if full-time employed. For part-time employees, the vacation period is 10 days. Additionally, 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 the average last three months’ net salary, thus ranging the benefit between 160 and 200 Euros.
According to the Law for work security and health, all employers are mandatorily obliged to undertake several categories of the employees health exams at 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 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
Employees have a legal right to additional payment for overtime work.
- Overtime = 35%
- Night work = 35%
- Triple shift = 5%
- Sundays and national holidays = 50%
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’s and Doctoral Studies, nationally and abroad. Moreover, targeted and focused skilled and profiled employees’ demand is met by enrolling employees in the short to medium-term non-formal specialist training and courses, sponsored by the employers and related to the guaranteed working period for the company afterward. 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 employers.
Retirement benefits are not present or developed so far. The only option for it is voluntary retirement savings within the III Pillar offered by professional pension schemes organized by large domestic or foreign companies, within the ICT industry, financial corporate sector, or larger production companies. However, these options are mainly focused on employees in 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, offer particular managerial insurance as well as health insurance, from the non-life insurance industry or very limited offerings from individual and group life insurers.
Sports and Leisure Activities
Very few large domestic and foreign companies are offering employees incentives or sponsored activities for sports and leisure activities within the concepts of organizational health. The existence of internal gymnasiums is nonexistent, and 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 sports events such as skiing events, marathons, etc.
Employees’ financial benefit for food and travel expenses was abolished in 2008 and such transfers were included in the employee’s gross salary. However, foreign production companies located in the Technological Industrial Development Zones (TIDZ) and larger domestic and foreign financial and ICT companies, offer employees either free catering or discounted price canteens and food/beverages corners.
For companies that require distant travel, the employees are mandatorily offered and organized transport or additional wage benefit should be arranged if the 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 the 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.
This information about mandatory and supplemental employee benefits in Macedonia comes from Asinta’s Central and Eastern European Partner, the GrECo Group.