Before hiring in Bosnia and Herzegovina, it’s important to understand the various rules, regulations, and customs that apply to payroll and benefits there. For example, Bosnian employers have to withhold and pay both taxes and social security contributions from their employees’ wages and remit them to the relevant authorities. However, the amounts that must be deducted are different in each region.
In this section, we’ll walk you through everything you need to know about running payroll in Bosnia and Herzegovina, including the differences between the country’s main administrative entities. We’ll also cover the minimum wage in each region, as well as the mandatory benefits that employers are required to provide to employees. Lastly, we’ll cover some additional benefits that you could use to enhance your employee value proposition and more effectively attract and retain employees in Bosnia and Herzegovina.
In Bosnia and Herzegovina, the usual payroll cycle is monthly, with employees typically receiving their pay on the last day of the month. The currency is the Bosnia-Herzegovina Convertible Marka (BAM), and the tax year is the same as the calendar year (1 January–31 December). Read on to learn more about payroll in Bosnia and Herzegovina.
Social security contributions in Bosnia and Herzegovina vary in the different regions of the country, which each have their own regulations. The contributions for employers and employers are as follows:
Withholding and remitting taxes is also an important part of payroll in Bosnia and Herzegovina. In all three regions, personal income tax is charged at a flat rate of 10% in addition to social security contributions.
Unlike in some other countries, there is no legal requirement to provide a 13th salary in Bosnia and Herzegovina. Employers may choose to offer bonuses to employees at their discretion.
Employers in FBiH are legally required to provide employees with a payslip at the time of payment. While this isn’t an explicit legal requirement in RS, it is considered to be standard practice. In both FBiH and RS, employers are required to maintain payroll records for a minimum of five years.
In Bosnia and Herzegovina, many mandatory employee benefits are governed by the country’s administrative divisions: the Federation of Bosnia and Herzegovina (FBiH), Republika Srpska (RS), and Brčko District (BD). While there are overarching national regulations, specific benefits and obligations can differ across these entities. Below is an overview of the mandatory benefits in each region.
All employees in Bosnia and Herzegovina are required to pay into a pension scheme. When they retire, employees can access a pension. The pension amount a retiree receives is based on their average salary and years of contribution.
Employees in Bosnia and Herzegovina are also entitled to unemployment benefits under a government scheme. Eligibility and the amount paid depends on factors such as the duration of their previous employment and the reason for unemployment.
In Republika Srpska (RS), employers are obligated to provide group personal accident insurance to employees, covering incidents such as death due to illness or accident, permanent disability, and treatment costs resulting from accidents. This is voluntary in the Federation of Bosnia and Herzegovina (FBiH) and Brčko District (BD).
Employees in Bosnia and Herzegovina are entitled to leave in various situations, which may be paid or unpaid. For example, employees have the right to paid annual leave, sick leave, maternity leave, and paternity leave. They may also have other leave entitlements according to their individual employment contract and the collective bargaining agreement that applies.
Health insurance in Bosnia and Herzegovina is paid for through contributions from employees (RS and BD) or employees and employers (FBiH). This entitles them to access state-funded medical facilities and basic medical services.
Employers in Bosnia and Herzegovina may also provide their employees with additional benefits. While these may not be required by law, they can play an important role in improving an organisation’s employer value proposition, thus helping them to attract and retain talent. Read on to learn about some of the most common additional benefits in Bosnia and Herzegovina.
Employers in Bosnia and Herzegovina can enhance their benefits packages by offering employees additional paid or unpaid time off. For example, they might grant employees the right to annual leave on top of the 20 working days that are required by law or implement a more generous maternity, paternity, or parental leave policy.
Some employers in Bosnia and Herzegovina provide their employees with extended healthcare coverage to supplement the mandatory public system. This may include access to private healthcare facilities, outpatient services, and preventive care. In some cases, it may be extended to the employee’s immediate family members.
In recent years, wellness benefits have grown in popularity in Bosnia and Herzegovina as elsewhere. These might include things like gym memberships, fitness classes, or health workshops. The idea is to encourage employees to live a healthy lifestyle — which ultimately benefits employers, too.
Employers in Bosnia and Herzegovina can choose to provide pensions or retirement savings plans that go beyond the mandatory requirements. These voluntary contributions can enhance employees’ financial security in later life.
Flexible work benefits, including remote work, compressed workweeks, and flexible start/finish times, help employees to protect their work-life balance. Ultimately, this can lead to healthier, happier employees who are more likely to contribute fully to the organisation.
Other perks and benefits that employers may provide to their employees in Bosnia and Herzegovina include:
Getting payroll and benefits right is not just a legal issue. Every country also has its own customs, norms and expectations about employee compensation. And if your operations aren’t in line with your workers’ expectations, they may not stick around for long.
Thankfully, we know what we’re doing. When you work with CXC to engage workers in Bosnia and Herzegovina, we’ll handle everything from tax withholding to employee bonuses on your behalf.
Want to find out more?
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
DISCLAIMER: The information contained on this website is provided for general informational purposes only and should not be construed as legal, tax, or other professional advice on any subject matter. While we endeavor to ensure that the content is accurate and up to date, we make no warranties or representations of any kind regarding the completeness, accuracy, reliability, suitability, or availability of the information contained herein. The content on this site is not intended to be a substitute for professional advice. Users should not act or refrain from acting based on any information on this website without seeking the appropriate legal, tax, or other professional advice tailored to their specific circumstances from qualified professionals. We expressly disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this website. Use of the information on this site does not create an attorney-client, tax advisor-client, or any other professional-client relationship between the user and the website or its authors.
Want to know more about hiring and compliance in Bosnia?
Fill in the form below to get the know how to future proof your contingent workforce program today!
