North Macedonia Personal Income Tax Guide 2026

Overview — Public Revenue Office (PRO)

The Public Revenue Office (PRO) is North Macedonia's central tax authority responsible for administering personal income tax, corporate tax, VAT, social contributions, and other taxes. Tax residents are taxed on their worldwide income, while non-residents are taxed only on Macedonian-source income. Residency is determined by physical presence of 183 days or more in any 12-month period, or having a permanent home in North Macedonia. Employees have tax withheld at source by their employer. Self-employed individuals and business owners file annual returns directly with the PRO. The currency is the Macedonian Denar (MKD).

Flat IIT Rate — 10%

North Macedonia applies a flat personal income tax rate of 10% on taxable income. The annual personal exemption is MKD 123,240 (approximately MKD 10,270 per month). This means the first MKD 123,240 of annual income is tax-free. Any income above this threshold is taxed at a flat 10%. The effective tax rate is therefore very low — a taxpayer earning MKD 600,000 per year pays tax of only MKD 47,676 (effective rate ~7.9%). The flat 10% rate applies to all categories of personal income: employment, self-employment, business, rental, capital gains (as part of income), and other income.

Personal Exemption — MKD 123,240 per Year

Every resident individual is entitled to an annual personal exemption of MKD 123,240. This amount is adjusted periodically for inflation. The exemption is applied automatically by employers when calculating monthly PAYE (withholding tax). For self-employed individuals, the exemption is claimed in the annual tax return. The exemption is a deduction from total income before applying the 10% rate. There is no separate allowance for spouses, children, or dependants in the personal income tax system, though certain social benefits and family allowances exist outside the tax system.

PAYE Withholding

Employers must register for PAYE with the PRO and deduct income tax monthly from employee salaries. The employer calculates monthly tax on gross salary, applies the proportionate monthly personal exemption (MKD 10,270/month), deducts employee social contributions (18% of gross), and remits the net tax to the PRO by the 15th of the following month. Employers file monthly PAYE returns via the PRO's e-Tax portal. Employees receive annual tax summaries from their employers. The employer is also responsible for remitting employer social contributions (17.5%) separately.

Self-Employed Individuals

Self-employed individuals and sole proprietors are taxed at the same flat 10% rate on their business profits. Estimated tax is payable in quarterly instalments. The annual tax return must be filed by 31 March of the following year. Self-employed individuals can deduct allowable business expenses (rent, utilities, raw materials, salaries, professional fees) to arrive at taxable profit. Proper books of account must be maintained. Certain small businesses may qualify for presumptive taxation based on turnover rather than actual profits, with rates varying by activity.

FAQs

Do I need to file a return if all tax was withheld at source?

If you are an employee with only employment income and all tax was correctly withheld at source, you generally do not need to file an annual return. However, if you have additional income (rental, business, foreign income), a return is required.

Is there a marriage or child tax allowance?

North Macedonia does not offer tax allowances for marriage or children in the personal income tax system. However, there are separate social benefits and child allowances paid through the social security system.

What is the penalty for late filing?

Late filing attracts a penalty of up to MKD 50,000 for individuals, plus interest at the statutory rate on unpaid tax. Repeat offences may result in higher penalties.

Disclaimer

This guide provides general information about North Macedonian personal income tax for the 2026 tax year. Tax laws, rates, and regulations may change. Always consult with a qualified Macedonian tax advisor or the Public Revenue Office for advice specific to your situation. InvestmentKit does not provide tax advice.