Payroll and Benefits Guide Bosnia and Herzegovina

Federation of Bosnia and Herzegovina (FBiH)

Employer Payroll Contributions

Employee Payroll Contributions

Employee Income Tax

* In the Federation of Bosnia and Herzegovina, the employer also pays 0.5% of the contribution for protection from natural and other disasters as well as 0.5% of the water protection charge, calculated on net salary.
** Federation of Bosnia and Herzegovina personal allowances (monthly):
Personal allowance – 300 BAM
Dependent family member – spouse 150 BAM
Dependent family member – first child 150 BAM
Dependent family member – second child 270 BAM
Dependent family member – third and every next child 90 BAM
Dependent family member – parent (whose monthly income does not exceed BAM 300) 90 BAM

Brčko District

Employer Payroll Contributions

Employee Payroll Contributions

Employee Income Tax

* Brčko District Personal allowances (annually)

Personal allowance 6,000 BAM
Dependent family members and persons receiving aliment based on the agreement on life-long aliment (50% of personal allowance) 3,000 BAM
Deduction for disability of taxpayer or dependent family member – 10% of personal allowance for every determined 20% of invalidity
Permanent disability 3,000 BAM

Republika Srpska

Employer Payroll Contributions

Employee Payroll Contributions

Employee Income Tax

* In the Federation of Republika Srpska there are no employer’s social security contributions.
** Republika Srpska personal allowances (annually)
Personal allowance – 6,000 BAM
Dependent family member – 900 BAM

General

The minimum wage in the Federation of Bosnia and Herzegovina is  BAM 650.00 per month.

Payroll Cycle

In Bosnia and Herzegovina, the payroll cycle is generally monthly.

13th Salary

There is no statutory requirement to provide a 13th salary.

General

The standard workweek is limited to 40 hours per week with the working week lasting five days (Monday-Friday).

In the Federation of Bosnia and Herzegovina a woman working full working hours after having used her maternity leave shall be entitled to be absent from work twice daily for a duration of one hour each time for the purpose of nursing the child until the child reaches one year of age.

In the Republic of Srpska, if a woman starts work before the expiry of the whole maternity leave period (12 or 18 months, respectively), she shall be entitled to additional 60 minutes of breaks during working hours in order to breastfeed the child.

In the District of Brcko, a woman who after maternity leave works her normal hours of work shall be entitled to be absent from work for one hour twice a day to breastfeed the child, counted as normal hours of work until the child reaches one year of age.

Overtime

All work exceeding the standard working hours a week is to be paid as overtime and is regulated by employment contract/collective agreements. When an employee is requested to work overtime or work on holidays, there is a maximum number of hours allowed. The maximum differs per region as below:

• Federation of Bosnia and Herzegovina: A pregnant woman, mother, or an adoptive parent with a child of up to three years of age or a self-sustaining parent or adoptive parent with a child of up to six years of age may work overtime if she/he provides a written statement of voluntary consent to such work.
• Republic of Srpska: No overtime work shall be ordered for pregnant women, a mother of a child of up to three years of age, and single parents or single adoptive parent of a child under six years of age. Exceptionally, these employees may work overtime if he/she provides a written statement of his/her voluntary consent to do it.
• District of Brsko: A pregnant women, a mother, an adoptive parent with a child of up to one year of age, or a single parent or single adoptive parent with a child of up to two years of age may work overtime if he/she agrees in writing of his/her own free will to such hours of work.

According to collective agreement for Bosnia & Herzegovina, overtime is paid at a rate of 125% of the net hourly rate. Work on a day of weekly rest is paid at least 115% of the net hourly rate. Work on national holidays is paid at 40% of the net hourly rate.

According to collective agreement for RS, overtime work is paid at a salary rate of 130%. Work on public holidays and other days on which no work is done by law is paid at a salary rate of 150%.

Working Week

Monday-Friday

Paid Time Off

Employees are entitled to 20 working days of paid annual leave and no more than 30 working days as stipulated in the employment contract and labour law.

Annual leave may be used in two segments. The first part shall be used for a duration of at least 12 working days in the course of a calendar year. The remaining days above the 12 days that must be used within the year can carryover to be used by no later than 30 June of the following year.

Employees are entitled to be absent from work for up to four days in a calendar year to meet his religious and/or tradition-related needs e.g. to celebrate religious holidays, of which two of these days shall be paid.

Public Holidays

There are 21 public holidays.

Sick Days

All sick days are paid. In RS, the 1^st month of sick leave is paid by the employer after which the Social Security takes over. In Federation of B&G the first 42 days is paid by the employer, after that the Social Security fund takes over payment.

A sick note must be provided as soon as possible as proof of illness, even if the sick leave was just one day.

Maternity Leave

Female employees are generally entitled to up to twelve months of maternity leave with a minimum number of days as below:

• In the Federation of Bosnia and Herzegovina a woman may not take shorter maternity leave than 42 days following the birth of the child.
• In the Republic of Srpska a woman may not start work before 60 days have expired after childbirth.
• In the District of Brcko a woman may have seven days before the presumed date of confinement and 42 days after childbirth.

Following completion of the maternity leave, she may work half-time until her children are two years old or the father may work half-time instead if the mother returns to full time work.

The employee is entitled to maternity pay under labour law with a salary of between 50-80% of their regular wage, dependent upon the various cantonal regulations of the Federation of Bosnia and Herzegovina.

In Republika Srpska and the District of Brcko the employee is also entitled to an additional six months of leave if she has twins or for every child from her third child on and is entitled to 100% of her regular salary compensation.

Paternity Leave

In the Federation of Bosnia and Herzegovina a father is entitled to unpaid leave up to seven working days in one calendar year and in the Republic of Srpska/District of Brsko, it is up to three working days within one calendar year.

Parental Leave

There is no other parental leave in Federation of Bosnia and Herzegovina.

Termination Process

General

The standard VAT rate is 17% and the VAT regime applies equally throughout the country of Bosnia and Herzegovina. There is no reduced VAT rate in Bosnia and Herzegovina.