Payroll & Employment Guide Bosnia & Herzegovina

Employment contracts in Bosnia & Herzegovina must be written and compliant with the Labour Law. Contracts can be fixed-term or indefinite and must include all relevant employment conditions.

Notice periods: Generally range from 7 days to 3 months, depending on area, tenure and contract type.
Termination of employment: Can occur via notice, mutual agreement, or immediate dismissal for just cause.

Employers in Bosnia & Herzegovina are legally required to provide a set of core benefits as outlined by national and entity-level labour laws. In addition to these mandatory benefits, many employers also choose to offer extra perks to remain competitive in the job market.
Mandatory benefits: Health insurance, pension, unemployment insurance
Common perks: Meal allowances, performance-based bonuses, awards, commuting cost reimbursements, and annual vacation allowances
Leave policies: Annual leave, sick leave, and parental leave

Bosnia & Herzegovina operates a structured tax system with clear employer obligations for income tax withholding and contributions.

• Personal Income Tax (PIT): Flat rate of 10% on employment income, business income, dividends, interest, rent, and capital gains.
• Corporate Income Tax (CIT): Standard rate of 10%, with potential incentives for certain investments and regions.
• Value Added Tax (VAT): 17%.
• Withholding tax: 10% on dividends, interest, royalties, and capital gains paid to non-residents (subject to Double Taxation Treaties).
• Social security contributions: Cover pension, health, and unemployment insurance. Rates vary slightly between regions.

Salaries in Bosnia & Herzegovina are typically paid in accordance with the terms outlined in the employment contract. Employers must ensure that salary payments, tax withholdings, and social security contributions are processed in line with local labour laws and deadlines.

Salary payment deadline: By the last working day of each month

Taxes and contributions payment deadline: In Bosnia & Herzegovina, tax and contribution deadlines vary by type and region:

• PIT: Due by March 31 in the Federation and Republika Srpska, and February 28 in the Brčko District.
• CIT: By March 31 for the previous fiscal year.
• VAT: Monthly or quarterly, usually by the 10th of the following month.
• Social contributions: Paid monthly, aligned with payroll.
  
  Payroll currency: Bosnia and Herzegovina Convertible Mark (BAM)

Bosnia & Herzegovina’s labour laws are shaped by national and entity-level legislation. Employers must be aware of different frameworks depending on the region (Federation of Bosnia & Herzegovina, Republika Srpska, Brčko District).

Minimum wage: BAM 1,000 per month
Probation period: Usually between 3 - 6 months

Using EOR services in Bosnia & Herzegovina allows you to legally employ individuals in the country without opening legal entities there. The EOR takes over all the legal responsibilities as an official employer, including:

• Legal employment and contracts
• Payroll processing
• Tax withholding
• Benefits administration
• Onboarding/offboarding employees

Using PEO services in Bosnia & Herzegovina provides HR and administrative support, while you remain the legal employer. PEO services are ideal for employers who already have legal entities in Bosnia & Herzegovina but need support to manage their workforce operations, including:

• HR support and workforce administration
• Payroll and benefits management
• Compliance and local labour law guidance
• Employment contracts assistance

Native Teams provides a payroll calculator adjusted per Bosnia & Herzegovina’s labour laws. Estimate gross-to-net salaries, tax withholdings, and employer costs in Bosnia & Herzegovina with our localised calculator. Designed to meet all payroll and compliance requirements.