Hiring in Bosnia and Herzegovina: Employer Costs, Labor Laws and How to Hire
Employers in the Federation of BiH pay 5% in contributions on gross pay in 2026, and employees pay 31%. On a BAM 2,500 gross monthly salary, the employer's cost is BAM 2,625 a month. Republika Srpska sets its own rates: 31% in total on gross pay. Labor and tax rules are set separately in each entity and in Brcko District.
Hiring someone in Bosnia and Herzegovina? This guide covers what an employee costs, the contribution rates, the labor rules that apply, the minimum wage, income tax, work permits and the ways a company outside the country can employ someone there. Bosnia and Herzegovina is not in the European Union. Labor and tax rules are set separately in the Federation of BiH, Republika Srpska and Brcko District, so the figures below are given per entity.
Employer and employee contributions in Bosnia and Herzegovina, 2026
Key employment rules in the Federation of BiH
How to hire in Bosnia and Herzegovina
Hiring in Bosnia and Herzegovina comes down to two decisions: who you hire, and how you employ them. First check where the person will work. Labor and tax rules are set separately in the Federation of BiH, in Republika Srpska and in Brcko District.
- Find the person. Write the role, set the salary against local pay levels, then source and interview candidates. You can run the search yourself with a job post, or use a placement service that delivers a shortlist.
- Choose how to employ them. A local entity running payroll, an employer of record or a contractor agreement. Each option is explained below.
- Make the offer. The contract has to follow the labor law of the entity where the person works. In the Federation of BiH it is made in writing.
Your options for employing someone in Bosnia and Herzegovina
- Local entity: you register a company, run payroll, withhold income tax and pay the contributions to the tax administration of the entity yourself. It suits a team of several people there.
- Employer of record (EOR): a third-party provider becomes the legal employer and runs local payroll for a monthly fee per employee. Your company directs the work.
- Contractor: the person invoices you through their own business. The relationship has to be genuinely independent, or it can count as employment.
Euro Remote Talent does not employ people on your behalf. We handle the placement: we find and shortlist the candidate, and you employ them through the route that fits.
What an employee costs in the Federation of BiH
Under the Law on Contributions, employers in the Federation of BiH pay 5% on gross pay: 2.5% for pension and disability insurance, 2% for health insurance and 0.5% for unemployment insurance. Take a gross salary of BAM 2,500 a month. The employer pays:
- Pension and disability insurance: BAM 2,500 x 2.5% = BAM 62.50
- Health insurance: BAM 2,500 x 2% = BAM 50
- Unemployment insurance: BAM 2,500 x 0.5% = BAM 12.50
The employer's cost is BAM 2,500 + BAM 125 = BAM 2,625 a month. From the gross salary, the employee pays 31% in contributions (BAM 775). Income tax is 10% of BAM 2,500 minus BAM 775 minus the BAM 300 personal deduction, which is BAM 142.50. The net salary is BAM 1,582.50. This example covers the contributions set by the Law on Contributions and the basic personal deduction only.
Republika Srpska and Brcko District
Republika Srpska has its own Law on Contributions. It sets one rate per branch on gross pay, 31% in total: 18.5% pension and disability, 10.2% health, 0.6% unemployment and 1.7% child protection. Income tax on personal earnings is 8%. Brcko District has its own rules too. Check the entity before you set a budget.
Minimum wage and pay
Each entity sets its own minimum wage. In the Federation of BiH it is BAM 1,027 net a month from 1 January to 31 December 2026, a rise of 2.7%. See the breakdown on our Bosnia and Herzegovina minimum wage page. Across the country, the average gross wage was BAM 2,646 in August 2026 and the average net wage BAM 1,701, according to the Agency for Statistics of Bosnia and Herzegovina. See our average salary in Bosnia and Herzegovina page.
Income tax
The employer withholds income tax from pay each month. The rules differ by entity:
| Tax on employment income, 2026 | Base | Rate |
|---|---|---|
| Federation of BiH, income tax withheld by the employer | Gross salary minus employee contributions (31%) minus the personal deduction of BAM 300 a month (BAM 3,600 a year) | 10% |
| Federation of BiH, dependants | Extra deductions of 0.5 to 0.9 times the basic deduction per supported family member | Lowers the base |
| Republika Srpska, income tax on personal earnings | Personal earnings, as defined by the Republika Srpska Law on Income Tax | 8% |
Work permits
Bosnia and Herzegovina is not in the European Union, so EU free movement rules do not apply there. Foreign workers need a work permit. In the Federation of BiH it is issued under the Law on Employment of Foreigners: the cantonal employment service decides within 30 days of a complete application. The service first checks the register of unemployed people, except for occupations listed as in short supply.
How Euro Remote Talent can help
We do placement. We source, screen and interview remote professionals across Europe, then deliver a shortlist of 3 candidates within 21 days for a flat $6,500, or your deposit back. Prefer to run the search yourself? Post a job for $299 and reach candidates who want to work remotely.
See how placement works, post a job or book a 30-minute call. Browse remote jobs in Bosnia and Herzegovina to see who is hiring there now.
This is general information, not legal or tax advice. Rules change and collective agreements can set different terms. Confirm with a local accountant or lawyer before you hire.
Frequently asked questions
How much does an employer pay in contributions in Bosnia and Herzegovina?
It depends on the entity. In the Federation of BiH the employer pays 5% of gross pay and the employee 31%. In Republika Srpska contributions are 31% in total on gross pay, with one rate per branch.
What is the minimum wage in Bosnia and Herzegovina in 2026?
Each entity sets its own. In the Federation of BiH it is BAM 1,027 net a month from 1 January to 31 December 2026, a rise of 2.7%.
How much paid leave do employees get in Bosnia and Herzegovina?
In the Federation of BiH, at least 20 and at most 30 working days a year under the Labour Law. Collective agreements can set more.
Do I need a work permit to hire an EU citizen in Bosnia and Herzegovina?
Yes. Bosnia and Herzegovina is not in the European Union, so EU free movement rules do not apply. In the Federation of BiH, the cantonal employment service issues work permits for foreign workers.
Can a company outside Bosnia and Herzegovina hire someone there without a local entity?
Yes. The usual routes are an employer of record, a third-party provider that employs the person for you, or a genuine contractor agreement. Euro Remote Talent handles the placement: we find, screen and shortlist the person, and you choose the route.
Sources
- Porezna uprava FBiH, Zakon o doprinosima, consolidated text with 33/25, art. 10. Checked 4 Nov 2026.
- Porezna uprava FBiH, Zakon o porezu na dohodak, consolidated text, art. 9 and 24. Checked 4 Nov 2026.
- Porezna uprava FBiH, Zakon o radu FBiH, consolidated text with 39/24. Checked 4 Nov 2026.
- Poreska uprava RS, Zakon o doprinosima, Sl. glasnik RS 114/17, art. 22. Checked 4 Nov 2026.
- Poreska uprava RS, Amendment 112/19, unemployment rate 0.6%. Checked 4 Nov 2026.
- Poreska uprava RS, Amendment 119/21, health rate 10.2%. Checked 4 Nov 2026.
- Poreska uprava RS, Law on Income Tax amendment 119/21, art. 4 rate 8%. Checked 4 Nov 2026.
- Vlada FBiH, Utvrฤen iznos najniลพe plaฤe za 2026. godinu, 30 Dec 2025. Checked 4 Nov 2026.
- BHAS, Average monthly gross wages, August 2026. Checked 4 Nov 2026.
- Vlada FBiH, Rulebook on work permits, 2 Nov 2026. Checked 4 Nov 2026.
