Increasing the minimum wage “harms” those with maximum salaries as more social security contributions are paid

From factory workers and seamstresses to salespeople, waiters, or construction workers, anyone employed in Albania from this month will be paid no less than 50,000 lek. The minimum wage has increased by 10,000 lek.

Professor Erion Muça told A2CNN: “This is a positive indicator because the increase in the minimum wage directly affects the most vulnerable layers of the labor market. On the other hand, the impact this increase could have on small businesses, their costs, and the risk of informal employment needs to be carefully considered. So it is an important social step, but it should be accompanied by supportive policies.”

For the entire year of 2026 and until mid-2027, the state will cover the contributions for the difference between 40,000 and 50,000 lek so that neither the employer nor the employee is burdened.

Zef Preçi, an economics expert, explained: “This is more part of propaganda than a genuine development policy. Raising the minimum wage without a full analysis of productivity and business costs can have opposite effects, such as job losses or increased informal employment. Without structural reforms, a country like Albania cannot compete in the region with decisions like this alone.”

Even though the government pledges to cover the effects of the minimum wage increase for the first 18 months, businesses are concerned about the additional costs they will face for employees’ social and health contributions after this period.

Florian Zekja, an entrepreneur in the manufacturing sector, emphasized: “The increase in the minimum wage, as well as other wages downstream, raises operating costs for companies like mine. For the first 18 months, the state covers the contributions, but after this period we will feel the pressure on our balance sheets and will need to rethink employment and investment strategies.”

Along with the minimum wage, the maximum wage also rises by 10,000 lek this month. From 176,416 lek, it increases to 186,416 lek. Contrary to general perception, raising the maximum wage translates into a net “reduction” for anyone paid above this threshold. They will receive 950 lek less because they pay higher social security contributions.

“KORÇA BOOM”