Serbia plans to raise the statutory minimum wage to RSD 70,470 per month, or approximately €600, from January 2027, extending a series of increases that are lifting labour costs across the economy. The proposed rate compares with the current monthly minimum of RSD 64,554. The minimum hourly wage would increase from RSD 371 to RSD 405, representing an increase of approximately 9.2%. The government also plans to raise the non-taxable salary threshold by a similar percentage, providing employers with partial relief from the higher statutory wage cost.
Wage adjustment and household purchasing power
The planned increase comes as inflation has fallen sharply. With the minimum wage rising by more than 9%, employees could record a substantial increase in real income if price growth remains contained. The effect on businesses will differ according to their exposure to minimum-wage employment. Companies with compensation levels substantially above the statutory floor will face less direct pressure than businesses employing large numbers of workers at or close to the minimum.
Retail, hospitality, textiles, food processing, agriculture and logistics are among the labour-intensive sectors expected to face greater exposure. Parts of component manufacturing where significant numbers of employees remain close to the wage floor will also be affected.
Higher costs extend beyond minimum-wage employees
The financial impact can extend beyond workers receiving the statutory minimum. Employers generally maintain wage differences between employees at different levels of responsibility and skills. An increase at the bottom of the salary scale can therefore create pressure to adjust compensation for supervisors, skilled workers and employees earning just above the minimum, as businesses seek to preserve existing wage differentials.
The proposed 2027 increase consequently affects the broader structure of labour costs rather than only the employees directly covered by the statutory minimum.
Labour supply pressures reshape business costs
Serbia is moving toward a higher-wage economic model as labour supply becomes tighter. Demographic pressures, lower unemployment compared with historical levels and stronger competition for workers are affecting employers’ recruitment strategies. Businesses are competing for employees within Serbia while also relying increasingly on imported labour.
The change has different implications across the corporate sector. Software exporters, financial institutions and capital-intensive manufacturers generally maintain salaries significantly above the statutory minimum, reducing their direct exposure to the increase.
Productivity and investment become increasingly important
Higher wages are economically sustainable when accompanied by corresponding productivity gains. As labour costs rise, businesses face increasing pressure to improve efficiency and develop activities with greater value added. Serbia’s investment strategy will therefore increasingly involve automation, workforce training, engineering capabilities, domestic suppliers and higher-value manufacturing alongside labour availability. The proposed RSD 70,470 minimum monthly wage for 2027 represents another increase in the statutory cost of employment as Serbian businesses operate in a labour market where wage levels and competition for workers are both rising.
