Employer of Record in Bosnia & Herzegovina

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.

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

The minimum wage for employees in Bosnia & Herzegovina is typically 3.73 BAM per hour, amounting to ~596 BAM per month for a typical 40 hour work week.

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 8% - 10% 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% - 31% (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).

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 50-80% of the reference wage, while in Republika Srpska and the District of Brcko, it's 100% of the employee's salary.

Paternity Leave In Bosnia & Herzegovina

In Bosnia and Herzegovina, employees have the right to paternity leave after the first 6 weeks following childbirth if the female worker agrees in writing to waive the equivalent period of her maternity leave. Salaries during paternity leave vary: in the Federation of Bosnia and Herzegovina, it's 50-80% of the reference wage, while in Republika Srpska and the District of Brcko, it's 100% of the employee's salary.

Sick Leave In Bosnia & Herzegovina

Sick leave in Bosnia and Herzegovina follows these terms:

• 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.
• 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.
• A sick note must be provided promptly as proof of illness, even for one day of sick leave.

Parental Leave In Bosnia & Herzegovina

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 20 years of insurance record

Notice Period in Bosnia & Herzegovina

The minimum notice period in Bosnia and Herzegovina is 7 days for employee-initiated contract cancellations and 14 days for employer-initiated cancellations. 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.