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Temporary and occasional work contract in Serbia (PP ugovor): rules, pay and record

Temporary and occasional work contract in Serbia (ugovor o privremenim i povremenim poslovima): who may sign, the 120-day cap, how pay is taxed, insurance record and sick leave.

INFO
Short answer. A temporary and occasional work contract (ugovor o privremenim i povremenim poslovima, in practice "PP ugovor") is a written contract for work outside employment. An employer may use it for work that by its nature lasts no more than 120 working days in a calendar year, and only with an unemployed person, a part-time employee up to full-time hours, or an old-age pensioner; through a youth or student cooperative it may also be signed with a cooperative member (Art. 197 and 198 of the Labour Act, Zakon o radu). The worker is not an employee, so there is no annual leave, notice period or sick pay under the Labour Act. The fee is nevertheless taxed like salary: 10% tax plus full pension, health and unemployment contributions, so the time for which contributions are paid counts towards the insurance record.
ROK
Deadline. A PP contract is concluded for work that by its nature does not last more than 120 working days in a calendar year. Exceeding that limit, or doing a job from the employer's job systematisation, points to disguised employment. The employer must file the social insurance registration no later than the day the worker starts. (Art. 35(2) and 197(1) of the Labour Act and Art. 12 of the Law on the Central Register of Mandatory Social Insurance.)

What a temporary and occasional work contract is

The contract for temporary and occasional work (ugovor o privremenim i povremenim poslovima, commonly "PP ugovor") is regulated in Art. 197 and 198 of the Labour Act (Zakon o radu, Sl. glasnik RS Nos. 24/2005 ... 109/2025 - other law), in the chapter on work outside employment. That is the key to everything else: a PP worker is not an employee but an engaged worker. The employer does not establish an employment relationship with them, so the provisions on annual leave, notice periods, minimum wage, severance and protection against dismissal do not apply.

The law still sets three conditions. First, the nature of the work: it must be work that does not last more than 120 working days in a calendar year. Second, the circle of people with whom the contract may be signed. Third, written form.

Who may work under a PP contract and for how long

Under Art. 197(1) an employer may conclude a PP contract with:

  • an unemployed person,
  • an employee working part time, up to full-time hours,
  • an old-age pensioner.

Under Art. 198 the contract may also be concluded with a member of a youth or student cooperative, in accordance with the cooperative regulations. The cooperative then acts as intermediary, and special, more favourable tax rules apply to a member under 26 who is in education.

A PP contract cannot be concluded with someone already working full time. For them the law provides the supplementary work contract, up to one third of full-time hours.

The 120-day limit is tied to the nature of the work and counted per calendar year. A working day is a day on which work is done, regardless of the hours. Work that goes on all year, with the same person, in the same position, is neither temporary nor occasional, even if the contracts are "interrupted" and signed again. The law does not say whether the 120 days are counted per employer or per worker, so in practice both are tracked: the same person should not exceed 120 working days a year with the same employer on the same work.

What a PP contract must contain

The law requires only written form and does not list elements as it does for an employment contract. Because the protective provisions of the Labour Act do not fill any gaps, the contents matter more to the worker than in an employment contract. A sound PP contract contains:

  • the parties and the Art. 197 category under which the worker is engaged,
  • a description of the temporary or occasional work,
  • duration, with dates and the total number of working days,
  • schedule and place of work,
  • the agreed fee, stated as gross or net, the unit of calculation and the payment deadline,
  • how the contract may end early and the notice period,
  • health and safety, confidentiality, work equipment.

The employer must keep the contract at the place of work and file the insurance registration no later than the day the worker starts (Art. 35 of the Labour Act and Art. 12 of the Law on the Central Register of Mandatory Social Insurance).

Pay under a PP contract: how the fee is calculated

Although the worker is not an employee, tax law treats the fee as salary. Art. 13(2) of the Personal Income Tax Act expressly states that salary includes the agreed fee for temporary and occasional work under a contract concluded directly with the employer or through a youth or student cooperative, except for a cooperative member under 26 in education. It follows that:

  1. Salary tax of 10% applies (Art. 16 of the Personal Income Tax Act).
  2. Worker contributions deducted from the fee: pension 14%, health 5.15%, unemployment 0.75%, in total 19.9%.
  3. Employer contributions on top: pension 10% and health 5.15%, in total 15.15%.

The contribution base is the agreed fee (Art. 16 of the Contributions Law) and the rates are set in Art. 44. Both the worker and the employer are liable (Art. 7, 8 and 9), and the employer calculates and pays everything when it pays the fee and files the PPP-PD return (Art. 51).

Example for a gross fee of RSD 100,000: tax 10,000, pension 14,000, health 5,150, unemployment 750. The worker receives RSD 70,100. The employer additionally pays 10,000 pension and 5,150 health, so the engagement costs RSD 115,150.

The non-taxable salary amount (RSD 34,221 a month in 2026) does not apply to a PP fee. Art. 15a(2) grants the reduction only for salary under Art. 13(1) and (3) (employment and an entrepreneur's personal salary), while the PP fee is salary under Art. 13(2). Tax is therefore paid on the whole gross amount. Before signing, check how the employer calculates and request a payslip with every payment.

One floor exists even without a minimum wage. Contributions are paid on at least the minimum monthly base, which is 35% of the average salary and for 2026 amounts to RSD 51,297 (Art. 36 and 37 of the Contributions Law, figure published by the Pension Fund). When the fee for a month is lower, contributions are calculated on RSD 51,297, which makes small engagements relatively expensive.

Insurance record, health insurance and sick leave

A PP worker is an insured employee under the Pension and Disability Insurance Act (Zakon o penzijskom i invalidskom osiguranju) if not insured on another basis (Art. 11(1)(9)), and through a cooperative if aged 26 or not in education (item 10). The time for which the contribution was paid counts towards the insurance record (Art. 46). So the answer to "does a PP contract count towards my record" is: no employment record under the Labour Act, but yes an insurance record, which is what counts for the pension.

For health insurance a PP worker is insured under Art. 11(1)(13) of the Health Insurance Act and is entitled to health care. Salary compensation during temporary incapacity, that is sick pay, from the Health Insurance Fund goes only to the insured persons listed in Art. 72, and PP workers are not among them. The employer's duty to pay the first 30 days of sick leave does not apply either, since it concerns employees. Sick leave under a PP contract therefore means treatment covered by insurance, but no pay for the days not worked.

Termination, leave and other rights

Notice periods, reasoned dismissal, protection against dismissal, annual leave, paid absence, increased pay for overtime and night work, minimum wage and severance are employment rights. They do not apply to a PP contract unless the contract expressly provides them. Termination is governed by the contract and the Law on Contracts and Torts: the contract ends when the period expires or the work is completed, and earlier unilateral termination follows the agreed rules.

It is therefore in both sides' interest for the contract to contain a notice period and a rule that all days worked are paid. For health and safety at work the employer is responsible towards engaged workers too.

How to spot misuse of a PP contract

A PP contract is cheaper for the employer than an employment contract only in the rights it need not provide, because tax and contributions are the same as on salary. That is why it is used where it does not belong. Signs of disguised employment:

  • the worker works more than 120 working days in a calendar year, with "breaks" and new contracts,
  • the worker holds a systematised position, full time, under a schedule and instructions like an employee,
  • the worker fits none of the Art. 197 categories (for example already works full time for another employer),
  • the contract is not in writing or the worker is not registered for insurance.

The legal argument in that case is Art. 32(2) of the Labour Act: if the employer has not concluded an employment contract with someone who in fact works as an employee, the person is deemed to be employed for an indefinite period from the day they started work. The worker may ask the labour inspectorate to inspect or sue for a declaration that an employment relationship exists. Evidence includes the contracts and registrations, work records, payments and correspondence.

A short overview of the clauses usually found in the contract: parties and basis of engagement, description of the work, duration and number of working days, schedule and place of work, fee and payment deadline, insurance registration, termination, health and safety, confidentiality. This is an overview of content, not a ready-made contract text.

Sources

What to do

  • Details of the employer and the worker, stating which Art. 197 category applies: unemployed person, part-time employee or old-age pensioner.
  • A description of the work. The work must be temporary or occasional by nature, not the regular tasks of a systematised position.
  • Duration, with start and end dates, and the total number of working days, which may not exceed 120 in a calendar year.
  • Working hours or schedule and the place of work. For a part-time employee, the hours at both employers together may not exceed full-time hours.
  • The agreed fee, stated expressly as gross or net, the calculation method (hourly, daily or lump sum) and the payment deadline.
  • A clause on social insurance registration before work starts and on the calculation of tax and contributions borne by the employer and the worker.
  • Conditions for ending the contract early: termination by either side, a notice period and payment for days worked. The Labour Act sets no notice period here, so the contract has to.
  • Health and safety at work, confidentiality and, where relevant, work equipment and reimbursement of costs.

What it costs

A PP contract is not certified and carries no notary costs. The cost is the tax burden on the fee, which is taxed as salary (Art. 13(2) of the Personal Income Tax Act, Zakon o porezu na dohodak građana). Salary tax is 10% (Art. 16). Contributions deducted from the fee, borne by the worker, are 14% pension (PIO), 5.15% health and 0.75% unemployment; employer contributions on top are 10% pension and 5.15% health (Art. 7-9, 16 and 44 of the Law on Mandatory Social Insurance Contributions). The non-taxable salary amount of Art. 15a does not apply to a PP fee, because Art. 15a(2) grants that reduction only for salary under Art. 13(1) and (3), not for the PP fee under Art. 13(2). Example: on a gross fee of RSD 100,000 the tax is 10,000 and the worker's contributions 19,900, so the net is RSD 70,100, and the employer pays a further RSD 15,150 in contributions, RSD 115,150 in total. Contributions are paid on at least the minimum monthly base, which for 2026 is RSD 51,297 (Art. 36 and 37 of the Contributions Law). Check current rates and amounts on purs.gov.rs.

FAQ

What is a PP contract and who may sign one?

PP ugovor is the short name for the contract for temporary and occasional work under Art. 197 of the Labour Act. An employer may conclude it for work that by its nature lasts no more than 120 working days in a calendar year, and only with three categories of people: an unemployed person, an employee working part time (up to full-time hours) and an old-age pensioner. Under Art. 198 it may also be concluded with a member of a youth or student cooperative, through the cooperative. The contract must be in writing. It cannot be concluded with someone who already works full time; for them the law provides the supplementary work contract (ugovor o dopunskom radu).

How is pay under a PP contract calculated?

For tax purposes the fee under a PP contract is treated as salary (Art. 13(2) of the Personal Income Tax Act). The gross fee bears 10% tax and 19.9% worker contributions (14% pension, 5.15% health, 0.75% unemployment). The non-taxable amount of Art. 15a does not apply, because Art. 15a(2) grants it only for salary under Art. 13(1) and (3), not for the PP fee under Art. 13(2). Net is therefore gross minus tax and those contributions, i.e. 70.1% of gross. The employer pays a further 15.15% at its own expense (10% pension, 5.15% health). If the contract states a net amount, the employer adds all charges on top.

Does a PP contract count towards my work record?

Not as employment record (radni staž) under the Labour Act, because a PP contract does not create employment. It does count as insurance record (staž osiguranja). A person doing temporary and occasional work is an insured person under the Pension and Disability Insurance Act (Art. 11(1)(9) and (10)), and the time for which the pension contribution was paid counts towards the insurance record (Art. 46). The employer must calculate and pay contributions at the same time as it pays the fee (Art. 51 of the Contributions Law). You can check the contributions paid with the Pension Fund (PIO) or through the Central Register portal.

Am I entitled to sick leave on a PP contract?

A PP worker is health-insured, because the health contribution is paid, and is entitled to health care (Art. 11(1)(13) of the Health Insurance Act, Zakon o zdravstvenom osiguranju). Salary compensation during sick leave from the Health Insurance Fund, however, is available only to the insured persons listed in Art. 72 of that Act, and temporary and occasional workers are not among them. Nor does the Labour Act oblige the employer to pay the first 30 days, since that rule applies to employees. A PP worker therefore normally receives nothing for sick days, unless the contract provides otherwise.

What is the notice period under a PP contract?

The Labour Act sets no notice period for a PP contract, because its rules on dismissal, notice and protection against dismissal apply to employment. Termination is governed by the contract itself and by the general law of obligations. If the contract contains a notice period, it binds both sides. If it says nothing, the contract ends when the agreed period expires or the work is completed, and unilateral termination before then may raise a claim for damages. It is therefore sensible to write a notice period and a rule on payment for days worked into the contract.

Do I get annual leave and the minimum wage on a PP contract?

Not by law. Annual leave, paid absence, increased pay for overtime and night work, the minimum wage and severance are rights of employees, and a PP worker is not an employee. The employer and the worker may agree some of these rights, but the law does not guarantee them. There is a floor for contributions, though: if the fee is lower than the minimum monthly contribution base, contributions are paid on that base (Art. 36 of the Contributions Law), which for 2026 is RSD 51,297.

Can a pensioner work under a PP contract without losing the pension?

An old-age pensioner is expressly listed in Art. 197(1)(3) of the Labour Act as a person with whom a PP contract may be concluded. Tax and contributions on the fee are paid as for anyone else, including the pension contribution. Payment of the old-age pension is not suspended because of it. A pensioner who has been insured on the basis of work for at least one year may, after that work ends, request a recalculation of the pension, and the more favourable amount is set (Art. 121 of the Pension and Disability Insurance Act).