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Hiring in Bosnia? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Bosnia.
Employment Norms in Bosnia
Bosnia and Herzegovina is situated in southeastern Europe. Formed in 1992, this country has liberal employment policies aiding its projected economic growth.
The country is divided into three constituent republics - the Federation of Bosnia and Herzegovina (FBiH), the Republic of Srpska, and the Brcko District. The Employer of record services takes responsibility for employment tasks and liabilities, considering local compliance and laws.
General Information:
- Bosnia and Herzegovina convertible mark (K.M. BAM) is considered the Bosnian currency
- Sarajevo is the capital of Bosnia and Herzegovina:
- Bosnian, Croatian, and Serbian are the official languages used in the country
- As of 2022, the GDP if Bosnia and Herzegovina was reported to be 23.681 billion USD
Table of Contents
- Agreements
- Onboarding Process
- Visa
- Minimum Wage
- Payroll Cycle
- Annual Bonus
- Health Benefits
- Working hours and overtime
- Leaves
- Social Security
- Taxes for Employers
- Taxes for Employees
- Probation
- Termination
- Severance Pay
- Employees or Contractors
- Final Words
AgreementsOnboarding ProcessVisaMinimum WagePayroll CycleAnnual BonusHealth BenefitsWorking hours and overtimeLeavesSocial SecurityTaxes for EmployersTaxes for EmployeesProbationTerminationSeverance PayEmployees or ContractorsFinal Words
Agreements
According to the Labour Law of 1999 and the Employment Law of FBiH (Article 24), it is mandatory to have a written agreement between the employee and employer. The written agreement must be in either- Bosnian, Serbian, Croatian, or any language which is understandable between the two parties.
Onboarding Process
Employment in Bosnia is based on the Federation of Bosnia and Herzegovina Labour Laws. The laws protect employment rights. They regulate employment contracts, termination, compensation, working condition, and everything related to employment.
Per the labour laws of the region, during onboarding, the employer must ask the candidate to provide the following documents:
- CIPS document: It contains personal info of the candidate, like name and address.
- A medical certificate certifying the fitness of the candidate.
- Resume/CV
- De-registration form (JS 3100) from tax authorities
- Tax card of the employee
Visa
There are three types of Visa available for Bosnia and Herzegovina:-
- Transit Visa- A types
- Short stay- C types
- Long stay- D types
The foreigners seeking work in Bosnia and Herzegovina need to obtain a D type of Visa.
- It is the duty of the employer to submit the application for the work permit on behalf of the employee to the authorities.
- The regional Employment Service Office authorizes the work permit.
- The work permit is granted for a specific job only.
- The work permit is valid for one year and automatically expires on termination of employment. The work permit can be renewed annually.
- The following documents are needed from the candidate:
- Valid travelling documents
- Personal information documents
- Documents of the company that is hiring (taxation, registration documents)
- The written contract between the two parties
- Passport copy (of the employee)
- Proof of employment
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Minimum Wage
- The minimum wage in FBiH is 543 BAM/month.
- The wage norms were revised in January 2022. (New updates are not available as yet.)
Payroll Cycle
- The duration of the payroll cycle in Bosnia depends on the written contract between the employer and the employee.
- Customarily it is weekly/monthly/bi-monthly.
Annual Bonus
- In Bosnia, there is no statutory obligation to provide bonuses to the employee.
- Nevertheless, it is customary in Bosnia to give a bonus on Christmas, which can go up to 78% of the basic salary.
Health Benefits
- There is no mandatory health coverage for employees in FBiH and the District of Brcko.
- In the Republic of Srpska, it is mandatory to provide employees with group personal accident coverage.
- The group personal accident coverage includes:
- Hospitalization bill (for accidents)
- Treatment cost (for accidents)
- Permanent disability
- Death due to illness
- Death due to an accident
- Employers in Bosnia can volunteer to provide private healthcare benefits for their employees. This includes hospitalization bills, disability coverage, annual check-ups, and treatment costs.
Working hours and overtime
- The mandated working hours in Bosnia are 40 hours per week.
- When any worker works over 40 hours per week or 10 hours per day, it is considered overtime.
- No worker/employee should be compelled to continuously work overtime for more than three weeks and not more than ten weeks in a calendar year.
- An employer should attain voluntary written consent for working overtime for the following types of employees:
- A pregnant mother
- A new mother or adoptive parent of a child of 3 years of age
- Self-sustaining parent of a child of 6 years of age
- An employer is mandated to increase the remuneration of an employee working
- a dangerous/ challenging work environment
- night shift
- overtime
- on non-working days
Leaves
Annual leave
The employer is mandated to grant days off on all public holidays.
The following is the list of National holidays (2023) applicable in the Federation of Bosnia and Herzegovina(FBiH), The Republic of Srpiska, and The Brcko District.
- January 1 - New Year's Day
- January 2 - The second year of the new year
- January 3 - New Year's day (substitute day)
- January 6 - Epiphany
- January 7 - Orthodox Christmas
- January 14 - Orthodox New Year
- April 9 - Easter Sunday
- April 10 - Easter Monday
- April 16 - Orthodox Easter
- April 21 - End of Ramadan (Eid-al-fitr)
- May 1 - Labour Day
- May 2 - The second day of the Labour Day
- June 8 - Corpus Christi
- June 28 - Feast of the Sacrifice(Eid-al-Adha)
- July 19 - Islamic New Year
- August 15 - Assumption Day
- August 28 - Assumption Day
- September 27 - Birthday of Muhammad
- November 1 - All Saints' Day
- November 2 - All Soul's Day
- December 25 - Christmas Day
- December 26 - Boxing Day
In FBiH, 20 days of paid vacation annually and four unpaid leaves for religious events are mandated. In the Republic of Srpska, Christian religious leave is restricted to 3 days.
Sick leaves
- The federal laws of Bosnia and Herzegovina (FBiH) mandate a minimum of 80% of the employee salary. It cannot be less than the minimum monthly salary of the employee. The employer pays 100% salary compensation for the first 42 days of sick leave. After 42 days, sick pay is refunded by the state to the employer
- In the Republic of Srpska, the employer is mandated to provide 70% compensation in case of sickness, where the first 30 days are paid by the employer and the rest by the state.
Maternity leaves
| Federation of Bosnia and Herzegovina | Republic of Srpska |
|---|---|
| 1 year of paid leave | 1 year of paid leave |
| 28 days before birth | 28 days before birth |
| Minimum 42 days after birth | Minimum 60 days after birth |
| Full salary compensation | Compensation is equal to the average salary drawn in the last 12 months |
Paternity leave is granted in special cases, such as when the mother is sick or absent/dead and cannot look after the child. The mother can waive a particular part of her maternity leave to the child's father.
Parental leave to adoptive parents is the same as that of biological parents.
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Taxes for Employers
The employer's cost in Bosnia is 12.48%, which includes
- 6.0% for pension insurance
- 4.0% for health insurance
- 0.5% for unemployment
- 0.5% for water taxes
- 0.5% for natural disaster
- 0.5% fee for people with disabilities
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Taxes for Employees
There is a flat rate of 10% on individual income tax in Bosnia and Herzegovina. It is subject to changes depending on the family dependants.
Probation
- It is a statutory requirement to mention the probation period in the employment agreement.
- It should be mutually agreed upon.
- There is no minimum restriction on the probation period, but it cannot exceed six months, as mentioned in the Labour law of Bosnia and Herzegovina.
- If any employee does not do satisfactory work during probation, the employer can give seven days of notice of termination. These seven days should be before the probation period expires.
- The market practice is usually to keep the probation period from 2-3 months.
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Termination
Employee termination in Bosnia and Herzegovina follows a strict procedure.
The termination of an employee is valid only under the following circumstances:
- when the agreement between the employer and employee is terminated at the behest of either of the parties
- If the employee reaches the retirement age, i.e., 65 years, or if the employee has completed 20 years of insurance
- If any employee has suffered any work-disability
- If the term of employment has ended due to the contractual obligation
- If an employee is convicted of a crime, which has resulted in imprisonment time of more than three months
- If a competent court has ruled that employment is terminated.
Notice Period
| By employee | By employer | |
|---|---|---|
| Minimum | 7 days | 14 days |
| Maximum | 1 month | 3 months |
Severance Pay
The employer is mandated to provide severance pay to the employee under the following circumstances:
- If the termination is not due to a breach or non-fulfilment of employee obligation
- If termination happens after two years of employment in the same organization
- Full-time, indefinite employment terminated midway
Severance pay cannot be less than one-third of the average monthly salary.
Employees or Contractors
There are two types of jobs in Bosnia: full-time and contractual.
- Contractors are sole employers or consultants
- Both have work protection from federation laws.
- Both are applicable for tax remuneration.
- Full-time employment has benefits of severance pay, health insurance, pension insurance, and leave compensation that contractual jobs don't have.
- Full-time employers receive legal protection from unfair dismissal or unsafe working environments.
Final Words
Bosnia and Herzegovina has seen steady growth in terms of opportunities and foreign investment. With growing numbers of foreign employees, EOR services are increasingly relevant. They are liable for managing workplace compliances such as permits and visas and handling payroll and HR processes, saving organizations time and money.
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