The minimum wage in Serbia will increase by 9.4%, from 450 to 500 euros from next October, according to announcements from the country’s Ministry of Finance.
The ministry also proposed a further increase of 10.1% from January 2026, which would raise the minimum wage to 550 euros. If implemented, the cumulative increase over 12 months would be 37%. The Ministry of Finance notes that the increase in the minimum wage not only supports low-income workers, but also strengthens overall wage levels. To reduce the burden on employers, the threshold for non-taxable income will be increased by 20.4%. As a result, the total tax burden on wages will be reduced to 59.7%, while the minimum wage tax will remain at 55.6%. Employers and unions supported the increase and further negotiations are expected by mid-September. Employers praised the government for strengthening the business environment, citing the consistent growth of businesses, employment and profits in recent years.
However, the Ministry of Finance announced that due to the weaker economic performance in the first quarter of 2025 and the expected negative impact of global factors, the forecast for Serbia’s GDP growth for 2025 has been revised from 4.2% to 3%, with growth projected to accelerate to 4.2% in 2026. Growth is expected to continue to be driven mainly by domestic demand, which will contribute by 5.3%, while the recovery in consumer confidence, together with the increase in the real disposable income of the population – mainly due to higher wages and pensions – will lead to an accelerated growth in private consumption by 3.9%, according to the forecast.
Also, government spending, which is projected to increase by 3.3%, is also expected to contribute slightly to GDP growth in 2026.
Meanwhile, according to the latest developments of the Polish government, from 1 January 2026, the basic wage in Poland is expected to rise to EUR 1,126 and EUR 7.37 respectively. However, trade unions consider the level of the proposed basic wage to be insufficient and argue that it should reach at least EUR 1,178. On the contrary, employers’ organizations recognize the Government’s proposal as a compromise solution, but express their reservations.
It is recalled that, according to current legislation, the Polish basic wage must increase each year at least by the percentage of the estimated inflation trend. However, if in the first quarter of the year in which the negotiations are taking place, the minimum wage is less than half of the average wage in the country, the increase should include an additional two-thirds of the estimated real GDP growth.
The Government’s insistence on its current proposal can possibly be justified by the observed slight increase in unemployment (5.4%). However, it comes at a time when many consider that it is not sufficient to cover the growing needs of workers, especially considering the inflationary pressures experienced by the country, and reflects the general political and social instability of the days and events in the country.
The information comes from the Offices of Economic and Commercial Affairs in Belgrade and Warsaw.
