Income Tax in Albania

A practical guide to personal income tax: when you are considered a tax resident, how monthly salary is taxed, what happens with rental income and dividends, what the contributions are, and what the key payment deadlines are.

1) Tax residency: when you are a resident and when you are not

In practice, an individual is considered a tax resident when they have a permanent home in Albania or when they stay in Albania for more than 183 days during the calendar year (even if those days are not consecutive). Residents are taxed on all sources of income, while non-residents are taxed only on income generated in Albania.

2) Salary tax (monthly): the brackets that apply

For employment income, income tax is normally withheld at source by the employer and remitted within monthly deadlines. The monthly brackets are:

3) Contributions (employee and employer)

For employment, in addition to salary tax, social and health insurance contributions also apply. In practice, the employee and employer have separate percentages calculated on the salary under contribution rules.

4) Income outside salary: rent, dividends, services

5) Quick example: calculating salary tax

To give you a practical sense, below is a mini-calculator for salary tax (based on monthly brackets). This calculator computes only the salary tax and a simple estimate of contributions.

6) Documents and proof: what to keep ready