Employer of Record in Bosnia & Herzegovina

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Bosnia & Herzegovina if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Bosnia & Herzegovina below, to avoid any compliance issues.

Employment Contract Requirements

Hiring in Bosnia and Herzegovina demands careful adherence to local regulations and practices. Key considerations for employment contracts include:

• Written contracts
• Currency and compensation terms
• Benefits and protections
• Regular working days and hours

Onboarding Process

We can help you get a new employee started in Bosnia & Herzegovina quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days.

Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Bosnia & Herzegovina

In Bosnia and Herzegovina, the standard workweek is limited to 40 hours over five days, from Monday to Friday.

Overtime in Bosnia & Herzegovina

In Bosnia and Herzegovina, overtime work exceeding the standard 40-hour workweek is paid and regulated by employment contracts or collective agreements. Maximum hours for overtime and holiday work vary by region. In Federation of Bosnia and Herzegovina, and in limited circumstances, the worker may work up to 8 hours of overtime per week. In Republika Srpska, a worker may work a maximum of 10 hours of overtime a week and a maximum of 4 hours per day.

Probation Period in Bosnia & Herzegovina

In Bosnia and Herzegovina, probationary periods are not mandatory and are established through mutual agreement. However, these periods must not exceed six months in duration in Federation of Bosnia and Herzegovina and 3 months in Republika Srpska.

Growing your team in Bosnia & Herzegovina is exciting, but it’s not without challenges. Local labor laws are often nuanced, and hiring without the right legal structure or processes can lead to misclassification, non-compliance penalties, or disputes. An Employer of Record removes that risk by acting as the legal employer on your behalf, taking full responsibility for compliance, contracts, payroll, and employee benefits.

This gives you the freedom to scale at your own pace, whether you're adding one employee or building out an entire function, without the burden of setting up and managing a local entity. You remain in control of day-to-day responsibilities and performance, while the EOR ensures every hire is legally protected and properly supported. It's a strategic way to expand globally without spreading your internal team too thin or exposing your business to legal liabilities in unfamiliar markets.

Fiscal Year in Bosnia & Herzegovina

1 January - 31 December is the 12-month accounting period that businesses in Bosnia & Herzegovina use for financial and tax reporting purposes.

Payroll Cycle in Bosnia & Herzegovina

The payroll cycle in Bosnia & Herzegovina is usually Monthly, with employees being paid by the last working day of the month.

Minimum Wage in Bosnia & Herzegovina

As of January 1, 2025, Bosnia and Herzegovina's minimum wage is set at BAM 1,000 per month. The wage may vary slightly by entity, as the country has a decentralized wage-setting system.

Bonus Payments in Bosnia & Herzegovina

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

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 0-6% on top of the employee salary in Bosnia & Herzegovina.

Employee Payroll Tax Contributions

In Bosnia & Herzegovina , the typical estimation for employee payroll contributions cost is around 30.5% - 32.8% (depends on region)%.

Individual Income Tax Contributions

Bosnia and Herzegovina comprises two entities: the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS), along with the Brčko District (BD), administered jointly.

Each region applies a flat income tax rate: 10% in the Federation of Bosnia and Herzegovina (FBiH), 8% in Republika Srpska (RS), and 10% in the Brčko District (BD).

Pension in Bosnia & Herzegovina

Bosnia and Herzegovina comprises of two entities: the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS), along with the Brčko District (BD), administered jointly. Each region applies a flat income tax rate: 10% in the Federation of Bosnia and Herzegovina (FBiH), 10% in Republika Srpska (RS), and 10% in the Brčko District (BD).

Employees expect to be paid accurately, on time, and in full compliance with local standards. When you're hiring in Bosnia & Herzegovina, providing a smooth payroll experience is critical to retention and trust. An Employer of Record ensures that employees receive what they’re owed, without errors, delays, or confusion about taxes or benefits.

Key Ways an EOR Supports Payroll in this country:

• Reliable Salary Payments: Ensures employees are paid promptly in local currency.
• Clear Payslips & Documentation: Provides employees with compliant, understandable records.
• Correct Benefits & Contributions: Delivers legally mandated contributions and any changes in compensation, like bonuses.
• Payroll Setup & Processing: Handles salary calculations, tax withholdings, and local reporting obligations.
• Boosts Employee Confidence: Builds trust with compliant, consistent payroll operations.

In Bosnia & Herzegovina, work permits and visas are essential for employing international workers. The main visa types include the Visa A (airport transit), Visa C (short-stay), and Visa D (long-stay for employment). Employers must assist with sponsorship, provide supporting documentation, and comply with legal obligations to secure work permits.

Processing times typically range from 30 to 60 days, with employers expecting up to two months to secure full legal work authorization, and renewal options are available for longer employment durations. While digital nomad visas are not explicitly available, freelancers may apply under other visa categories. Holders of passports from 97 jurisdictions may enter and stay for up to 90 days within 180 days without a visa.

Employers face challenges such as complex bureaucracy and proving the necessity of hiring foreign workers, making thorough preparation crucial.

Mandatory Leave Entitlement in Bosnia & Herzegovina

The annual leave entitlement in Bosnia & Herzegovina is 20 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Bosnia & Herzegovina

Bosnia and Herzegovina observes 5 mandatory national public holidays annually:

Paid Time Off in Bosnia & Herzegovina

Both full-time and part-time employees in Bosnia and Herzegovina receive 20 working days of paid time off (PTO) annually, accruing at a rate of 1.6 days per month. Additionally, employees become eligible for 6 days of PTO after completing the first 6 months of employment.

Maternity Leave In Bosnia & Herzegovina

Pregnant employees in Bosnia and Herzegovina can take maternity leave ranging from 42 days to 1 year, with 28 days before childbirth. The employee is required to take 42 days after childbirth (in FBiH) and 60 days (in RS). Salaries during maternity leave vary by region: in the Federation of Bosnia and Herzegovina, it's 50-100% of the reference wage (varies by canton), while in Republika Srpska and the District of Brcko, it's 100% of the employee's average salary from the last 12 months.

Paternity Leave In Bosnia & Herzegovina

In Bosnia and Herzegovina, fathers can take maternity leave after the mandatory post-birth period of 42 days in the Federation of Bosnia and Herzegovina (FBiH) and 60 days in Republika Srpska (RS), provided the mother agrees in writing to waive the equivalent portion of her maternity leave. Paternity leave pay varies by region: in FBiH, it ranges from 50% to 80% of the reference wage depending on cantonal regulations, while in RS and the Brčko District, it is 100% of the employee's salary.

Sick Leave In Bosnia & Herzegovina

Sick leave in Bosnia and Herzegovina follows these terms:

1. In Republika Srpska (RS), the employer pays for the first month of sick leave, after which Social Security takes over. Sick leave compensation is 100% of the employee's average salary in the previous period.
2. In the Federation of Bosnia and Herzegovina (FBiH), the employer covers the first 42 days of sick leave, with Social Security taking over thereafter. Sick leave compensation is 80% of the employee's salary, in the month that they fall sick.
3. A sick note must be provided promptly as proof of illness, even for one day of sick leave.

Parental Leave In Bosnia & Herzegovina

In Bosnia & Herzegovina, failing to provide the correct employee benefits can have serious consequences. Mistakes in benefits administration may result in fines and harm your reputation as an employer. An Employer of Record ensures statutory benefits and leave are handled correctly, every time, and provides comprehensive options for extra perks to reward your team.

Beyond just avoiding legal issues, a well-managed benefits program builds trust with your employees. An EOR ensures benefits are set up quickly during onboarding, updated when employee status changes, and fully compliant with national regulations. They also manage communication with employees, so there’s no confusion around what’s offered and how to access it. This combination of legal compliance and positive employee experience is hard to replicate without local infrastructure. With an EOR, you can offer peace of mind to your team (and to yourself) knowing that your benefits program in Bosnia & Herzegovina is running as it should.

Termination Process in Bosnia & Herzegovina

In Bosnia and Herzegovina, employment terminations must be justified and follow a fair process. Termination can occur for reasons such as:

• Misconduct (employee must receive one written and two verbal warnings)
• Agreement between the employer and employee
• Expiration of contract
• After the employee completes 65 years of age and 15 years of insurance record

Notice Period in Bosnia & Herzegovina

The minimum notice period in Bosnia and Herzegovina varies by entity. In the Federation of Bosnia and Herzegovina, the minimum notice period is 7 days for employee-initiated contract cancellations and 14 days for employer-initiated cancellations. In Republika Srpska, employees must give 15 days' notice while employers must give at least 30 days' notice. In Brcko District, employers must give at least 15 days' notice. The maximum notice period is 1 month for employee-initiated cancellations and 3 months for employer-initiated cancellations.

Severance in Bosnia & Herzegovina

Severance pay in Bosnia and Herzegovina must be at least 1/3rd of the average monthly salary (based on the last 3 months) for each year of employment. The specific amount is determined by the employment agreement. Employees with a minimum of two years of service are typically eligible for severance. The maximum severance amount is limited to six times the employee's average monthly salary paid in the last three months before termination.