Founders employed in their own legal entities have the same rights and obligations as other employees who do not hold equity in the company. Accordingly, a founder employed in their own company may be entitled to a bonus as a form of reward for contributing to the business success of the employer (in this case, the entrepreneur or the legal entity owned by the founder).

However, when it comes to bonuses paid to employed founders, attention must be paid to several key points:

• The bonus must be stipulated in the Work Rulebook, Collective Agreement, or Employment Contract;

• The bonus must be a result of the employee’s contribution to the success of the company, not merely due to ownership in the company’s capital;

• According to the defined rules from the general acts mentioned in item 1, other employees must also be entitled to the bonus if they meet the criteria for its payment — it cannot apply exclusively to the founder.

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Annual Bonuses as a Tool for Reducing the Corporate Income Tax Base

Employed founders often use annual bonuses as a means of reducing the corporate income tax base at the end of the fiscal year.

Undoubtedly, significant tax savings are achieved in this manner if the salary amount including the bonus exceeds the maximum monthly contribution base (RSD 573,470 until December 31, 2024, and RSD 656,425 from January 1, 2025).

Specifically, the portion of the gross salary (which includes the employee bonus) exceeding the maximum monthly contribution base is subject only to the 10% salary tax. Mandatory social security contributions are payable only up to the maximum base, and do not increase further as the salary amount increases.

The effective tax burden on the bonus amount exceeding the maximum contribution base can be 11% or lower, provided the founder is entitled to tax relief (e.g., in accordance with Articles 21v, 21ž, and 21z of the Law).

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Formal Requirements for Bonus Payment

To be eligible for this favorable tax treatment, the employer must regulate the right to a bonus, the bonus amount or the method of determining the bonus amount, and the payment deadline through a general act.

This requirement is emphasized due to its importance.

The employer may:

• Define a fixed bonus amount for each contracted engagement,

• Grant a specific bonus amount for referring a candidate for employment, or

• Set a bonus based on certain performance parameters, such as achieving annual revenue above a defined threshold.

Thus, the bonus can be:

• A nominal amount, or

• Determined through a formula using defined metrics.
  The key requirement is that the bonus be determinable.

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Equal Treatment of Other Employees

If, according to the provisions of the general act, other employees are entitled to a bonus, the employer must ensure that it is paid to all eligible employees.
Otherwise, any tax savings realized may be compromised.

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Timing of Bonus Payment

Employers/founders must also ensure that bonuses calculated according to payroll parameters valid for payments up to December 31, 2024 are actually paid by that date.
Postponing the payment to January 2025 is not allowed in such cases.

Therefore, the person in charge of payroll must be informed before calculation of the planned bonus payment date, and that date must be strictly followed.

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Impact on Average Salary Calculations

The paid bonus is included in the average salary used to calculate compensation during periods of absence, such as:

• Public holidays

• Annual leave

• Paid time off

• Sick leave

Example:
An employed founder with a gross salary of RSD 100,000, who receives a bonus of RSD 4,000,000 along with the December salary, can expect a January salary increase of up to RSD 30,000, since compensation for the two public holidays will be calculated based on the average salary including the annual bonus.

The same effect will occur in other months in which the employee is absent from work with the right to salary compensation. These increased costs must be budgeted in advance to avoid a situation where the company lacks funds to pay salaries along with the applicable taxes and contributions.