Personal income above EUR 31,654 earned in 2025 is subject to annual income tax

Annual personal income tax in Serbia is calculated on the total income of an individual over one calendar year when that income exceeds a legally defined threshold. The threshold changes annually and is expressed as a dinar equivalent.

For income earned in 2025, the threshold above which the annual return is triggered is the average annual salary multiplied by three, which in practice corresponds to around EUR 31,654 (the exact amount in dinars is confirmed via the Statistical Office publication).

What goes into the tax base

Surprisingly many items — and this is exactly where most owners make a mistake, because they only look at their salary. In scope:

• salary under an employment contract and related allowances,
• income from self-employment,
• income from copyright and related rights,
• income from capital (dividends, interest above the tax-free portion),
• income from real estate,
• capital gains above the threshold,
• other income taxed as "other income".

Rates and deductions

The amount above the threshold is taxed at progressive rates. Individuals up to a certain age receive a reduction in the tax base, as do taxpayers supporting family members. Here it is important to properly document dependants, since the Tax Administration requests certificates.

A typical situation for a business owner

An SME owner often has a mix: a modest salary through a d.o.o., a dividend towards year-end, possibly a consulting contract and maybe rental income from an apartment. It all adds up. If it is not tracked throughout the year, the following March can bring a pleasant (or unpleasant) surprise.

Practical advice

• Keep a personal record of income during the year. A simple Excel with columns: type of income, payer, date, gross, net, tax already paid. Ideally updated monthly.
• Run a simulation before large dividend payments. Sometimes it makes sense to split the payment across two fiscal years.
• Consult before 31 December, not after. Once the year has closed, the room for manoeuvre exists only in the accuracy of the return — not in optimising the amount.

If you have a mix of income and are not sure where you stand — the best time to walk through it together is before the annual return. A mistake here costs more than a consultation.