Compensation of Employee Expenses – Public Sector

The Government of Montenegro has adopted the Decree on Amendments to the Decree – Compensation of Employee Expenses in the Public Sector

(“Official Gazette of Montenegro”, No. 079/25 of 25.07.2025).

This decree introduces significant novelties regarding the calculation of daily allowances and compensation of employee expenses for official travel in the public sector. The goal is to achieve a higher level of fairness, clarity, and transparency in regulating the costs incurred by employees during business trips, as well as to adapt the system to the modern needs of state administration.

What is changing?

The previous provisions on the amount of daily allowances were less precise and often caused dilemmas in practice. With these amendments:

• the previous provision of Article 7 paragraph 2 has been deleted,
• while a new Article 7a has been introduced, which regulates in detail the calculation of daily allowances depending on provided meals and accommodation.

This achieves clearer regulation, which is of particular importance for employees who frequently travel as part of their work duties.

New calculation of daily compensations

According to Article 7a, the daily allowance for official travel within the country belongs to the employee in the amount of 20% of the calculation value of the coefficient determined by the Government.

However, the amount of the compensation depends on the travel conditions and covered expenses:

• if only accommodation is provided, the allowance is paid in full;
• if meals (lunch and dinner) are provided, the allowance is reduced by 60%;
• if one meal (lunch or dinner) is provided, the allowance is reduced by 40%.

This approach prevents double financing and ensures fair calculation in relation to the employee’s actual expenses.

Special rules for inspectors

The decree also introduces a special rule for employees performing inspection duties during the summer and winter tourist seasons.

They are exceptionally entitled, during the performance of tasks foreseen by action plans, to a daily allowance of 30 euros, regardless of the aforementioned reductions.

In this way, the specific and demanding nature of the work performed by inspectors in seasons of significantly increased workload is recognized.

Why is this amendment important?

The novelties in the calculation of travel expenses contribute to:

• greater fairness and transparency in the spending of budget funds,
• clearer rules for all public sector employees,
• recognition of specific working conditions for certain professions, such as inspectors.

This decree represents a step towards improving human resource management in the public sector and increasing efficiency in the application of regulations.