Personal Income Tax in Macedonia

Rate and basic rules

The personal income tax rate in Macedonia is a flat 10% on taxable income. This applies to all types of income — salary, fees, rental income, capital gains, and more. Every individual who is a resident of Macedonia and earns income domestically or abroad is a taxpayer, as are non-residents who earn income from sources in Macedonia. For employees, the employer withholds and remits the tax with each salary payment. For self-employed individuals and freelancers, the obligation to report and pay falls on the individual.

Types of taxable income

Personal income tax applies to several categories of income.

• Salary and compensation — Base salary, bonuses, overtime, vacation allowance, and all other employment-related payments.
• Self-employment income — Profit of sole traders (self-employed), including professional services and crafts.
• Fee-based income — Author royalties, service contract fees, consulting services, and occasional work.
• Rental income — Rent from apartments, offices, warehouses, or land.
• Capital gains — Profit from the sale of real estate, shares, ownership stakes, or other securities.
• Interest and dividend income — Deposit interest and dividends from ownership shares (taxed at 10%).
• Foreign income — Macedonian residents pay tax on income earned outside the country as well.

Non-taxable allowances and deductions

Certain payments are fully or partially exempt from personal income tax.

• Personal allowance — Every taxpayer is entitled to a basic personal allowance that reduces the tax base.
• Per diems for business travel — Exempt up to the prescribed amount.
• Commuting allowance — Within the legally determined limit.
• Meal allowance — The meal subsidy up to 2,500 MKD per month is exempt.
• Retirement severance — Non-taxable up to the prescribed amount.
• Scholarships — Educational scholarships awarded by government institutions.
• Social transfers — Child allowance, social assistance, and disability benefits.

Annual tax return: Step by step

1. 1

   Gather all documents

   Obtain income certificates from all sources — salaries, fees, rentals, capital gains. Employers issue an annual certificate for withheld tax.

2. 2

   Calculate total income

   Add up all taxable income and subtract recognized deductions and personal allowances to arrive at the tax base.

3. 3

   Fill out the PDD-GDP form

   Enter the data into the PDD-GDP form through UJP's e-Tax system. The form contains all income categories and deductions.

4. 4

   Submit by March 15

   The annual personal income tax return must be submitted electronically to UJP no later than March 15 of the current year for the previous calendar year.

5. 5

   Pay or request a refund

   If total tax exceeds the amount withheld during the year, pay the difference. If less, request a refund from UJP.

Obligations for freelancers and self-employed

Freelancers and self-employed individuals have additional obligations compared to employees. They must independently calculate and remit tax and contributions. Every freelancer working under a service or author contract is required to pay 10% tax on gross fees reduced by standardized expenses (typically 25-50% depending on the activity). Additionally, self-employed individuals must keep accounting records, issue invoices, and submit monthly and annual returns to UJP. Facturino simplifies this process with automatic tax calculation on every invoice, income tracking, and generation of reports ready for the tax return.