Montenegro’s Finance Ministry presented calculations in Podgorica on 5 November 2026 showing that the proposed Euro Model would lower an employer’s annual payroll-related taxes to about 1,000 euros for an employee receiving 1,400 euros net per month, from roughly 4,155 euros under the existing framework. The figures illustrate how the proposal could change business costs, but do not establish its full fiscal effects.
The ministry’s example assumes an employer pays a net salary of 1,400 euros a month. Under the proposal, annual taxes would be approximately 1,000 euros, compared with roughly 4,155 euros in taxes and contributions under current rules. State Secretary Tarik Turković presented the figures as illustrative government calculations, not an independently verified assessment of the legislation’s impact.
The proposal would set pension and unemployment contribution rates at zero and apply a 9% personal income tax to the relevant portion of salary above 700 euros. Municipal surtaxes would vary according to the employee’s location.
The government says reducing employment taxes would make higher net wages more affordable for employers and improve Montenegro’s competitiveness as an investment destination. The Euro Model would follow wage and tax reforms introduced through the Europe Now programmes.
Lower taxes could offset part of any increase in gross wage costs, while companies with many lower-paid workers could still face substantial rises in total labour expenditure. A complete assessment would need to account for differences among sectors, employee qualifications and existing salary levels.
Eliminating employment contributions also raises the question of how to finance the pension system and other public obligations currently supported by employment-related revenues. The European Commission warned in its latest assessment that further increases in mandatory public spending could weaken fiscal sustainability.
The government has not published a comprehensive, independently reviewed estimate of the reform’s effects on revenue, pension financing, public employment costs and borrowing requirements. Its final economic impact will depend on the legislation adopted and on how wage increases and tax reductions interact across the wider economy.
