Although the decision on the minimum wage should be made by the Socio-Economic Council (SES), the President of Serbia has once again preempted institutions by announcing a minimum salary of 550 euros for 2026. Unions have called this humiliating, while employers warn it could harm the most vulnerable companies. In 2025, the minimum wage increased by 13.7%, with the hourly minimum rising from 271 to 308 dinars, resulting in a monthly minimum wage between 49,280 and 56,672 dinars depending on working hours.
President Aleksandar Vučić announced in May that the current minimum wage of 53,500 dinars (about 457 euros) would rise to 550 euros by January 1, 2026. He said this would be supported by increasing the non-taxable portion of income by over 15%. Vučić claimed this offer exceeds the expectations of all unions in Serbia.
This is not the first time the President has overstepped his authority by announcing figures that should be set by the SES, which includes unions, employers, and the government. Earlier, in 2025, the non-taxable income threshold was raised by the same 13.7% as the minimum wage increase, from 25,000 to 28,423 dinars.
Ranka Savić, president of the Association of Free and Independent Trade Unions of Serbia, criticized the President for undermining institutions and unions by pre-announcing wage increases, calling it propaganda. She emphasized the rising cost of living in dinars, warning that despite wage hikes, people’s real purchasing power is squeezed by inflation and higher expenses.
Employers have mixed reactions. Nebojša Atanacković, honorary president of the Serbian Employers’ Union, explained that while those paying above minimum wages may benefit from tax relief, companies struggling to pay the minimum wage will face greater financial strain, possibly leading to business closures. He warned that increasing minimum wages beyond economic growth and inflation rates (usually up to 8%)—like the 13.7% rise seen in 2025—can fuel inflation and destabilize the labor market. About 100,000 workers earn the minimum wage, and increases often lead to wage rises for employees earning close to that level, compounding the economic impact.
Atanacković stressed that the SES usually sets the minimum wage by mid-September each year, and if no consensus is reached, the government decides independently. He cautioned against excessive increases to maintain economic balance and avoid inflationary pressures.
