Moving to Albania means embracing new experiences, beautiful landscapes, friendly people, lower living costs… and yes, a new bureaucracy to navigate. One topic that often confuses expats, digital nomads, and retirees is Albania’s pension system. Can you pay into it? Should you? What do you actually get in return?
In this article, we break it all down in plain English, no legal or too complicated terms.
So, how does Albania’s pension system work?
Albania has a state-run pension system that’s funded through social insurance contributions. If you’ve ever worked in a country with a pay-as-you-go model, this will sound familiar: people who work and contribute today are funding the pensions of current retirees.
There are two main parts:
- The public system, which covers pensions, disability, and healthcare.
- Voluntary private pension funds, which are optional and slowly growing in popularity.
When you work legally in Albania, you (and your employer, if you have one) are required to contribute a percentage of your income into this system. That money gives you access to public healthcare, unemployment benefits, and eventually, a retirement pension, if you meet the minimum years of contribution.
Who actually has to contribute?
Here’s the deal:
✅ You must contribute if:
- You’re employed by an Albanian company.
- You’re self-employed in Albania (including freelancers who register a business).
- You own or direct a company and take a salary.
❌ You don’t have to contribute if:
- You’re a remote worker paid by a foreign company and don’t register a business locally.
- You’re a retiree living in Albania on a foreign pension.
- You’re unemployed or living off passive income from abroad.
So if you’re just living in Albania, sipping coffee in Tirana and working remotely for a US startup, you’re likely off the hook. But once you start earning money from Albania or register a business here, you enter the system.
How much do you have to pay?
Here’s a simplified breakdown of social contributions:
- Employees: Around 28% of your gross salary gets paid into the system (split between you and your employer).
- Self-employed: You pay the full share yourself, based on a minimum income base (even if you earn less).
These contributions go toward:
- Your pension
- Your healthcare
- Unemployment or disability support (if needed)
What do you get in return?
Let’s be honest: the pension itself is not going to fund your dream retirement. Average pensions in Albania are around €150/month. Even if you contribute for 20+ years, don’t expect Western-style payouts.
That said, you do get:
- Access to public healthcare (basic, but helpful)
- A safety net in case of unemployment or disability
- A pension if you reach retirement with at least 15 years of contributions
- Legal compliance, which can help with long-term residency or citizenship
And if your home country has a social security agreement with Albania (like Germany, Italy, Canada, or Switzerland), your years of contribution in Albania can count toward your pension back home. That’s a big plus.
Can you contribute voluntarily?
This one’s tricky.
Albanian citizens can choose to contribute voluntarily to fill in pension gaps (like if they worked abroad). But for foreign residents, it’s not common, and it’s not always easy. You’d need to contact the Social Insurance Institute and apply individually. Some expats have done it—especially those married to Albanians or planning to stay long-term, but it’s not automatic.
If you’re not working locally and still want access to healthcare, this is one reason people consider it.
Should you contribute?
If you’re legally required to, the answer is simple: yes, you have to.
If you’re not required to, here are the pros and cons:
Pros
- You’ll get access to Albania’s public health system.
- You’re building eligibility for a local pension (even if small).
- It might help with residency renewals or eventual citizenship.
- If you’re from a country with a social security treaty, you won’t lose the years you pay in.
Cons
- There’s a minimum amount you have to pay, even if you earn less.
- The pension benefits are modest.
- The process can be bureaucratic and unclear.
- If your country doesn’t have an agreement with Albania (like the US), you might not get any pension credit elsewhere.
Real Talk: What do most expats do?
- Digital nomads usually don’t contribute, and don’t need to.
- Foreign employees or business owners do contribute and get the system’s benefits.
- Retirees living off foreign pensions don’t need to contribute, but should make sure they have some kind of health coverage (either private or via Albania’s system, if eligible).
Final Tips
- Talk to a local accountant or relocation expert before registering anything officially.
- Always double-check whether you must contribute. It can impact your taxes, visa renewals, and even your long-term plans.
- Keep track of your contribution history, this will help you down the line if you apply for a pension in Albania or back home.
If you’re unsure about your status or options, feel free to reach out to the Expatax Albania team. We’re happy to help you figure it out.
