Annual personal income tax is paid by natural persons which had annual income in 2018 three times higher than the average annual salary per employee paid in the Serbia in the year for which the tax is assessed (3 x 823,548 = 2,470,644 RSD for 2018), including:

1. residents for income earned on the territory of the Serbia and in another country;
2. non-resident for income earned on the territory of the Serbia.

The base for payment of annual personal income tax is the sum of the following incomes:

1. salaries;
2. taxable income from independent activity;
3. taxable income from copyright and related rights and industrial property rights;
4. taxable income from immovable property;
5. taxable income from leasing movable items;
6. taxable income of sportsmen and sports professionals;
7. taxable income from providing hospitality services;
8. taxable other income.

The basis of the annual personal income tax is taxable income which is the difference between the taxable revenue and the personal deductions amounting to:

1. the taxpayer - 40% of the average annual salary per employee for 2018;
2. for a dependent family member - 15% of the average annual salary per employee per member.

The total amount of personal deductions cannot exceed 50% of the taxable income.

Tax rate is progressive and for the annual income between 2,470,644 and 7,411,932 RSD tax rate of 10% is applied. If the annual income is higher than 7,411,932 RSD (six times the average annual salary in Serbia for 2018), tax rate of 10% is applied for the income up to 7,411,932 RSD, while 15% for the income over this amount.