Country Guides

Bosnia & Herzegovina

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Capital

Sarajevo

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Language

Bosnian, Croatian and Serbian

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Remote workers

approx. 75,000

payments

Currency

Convertible mark (BAM)

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Working hours

40 hours

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Public holidays

Varies by entity and canton

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Minimum wage

BAM 1,000

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Tax year

Jan 1 - Dec 31

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Date format

DD/MM/YYYY

Misclassification penalties

Employers who classify a worker as an independent contractor when the working relationship in practice resembles employment may face significant risks. These may include fines, back payment of taxes and social security contributions, and other potential legal consequences.

Fun fact

The Old Bridge (Stari Most) in Mostar is one of the country’s most famous landmarks. Brave locals dive about 24 meters (79 ft) from the bridge into the Neretva River as a tradition.

Employer contributions

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    Employment tax: 0%
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    Social security contributions: 5%

Social security contributions: Pension and invalid insurance

Contribution amount: 2.5%

Social security contributions: Health insurance

Contribution amount: 2%

Social security contributions: Unemployment insurance

Contribution amount: 0.5%

Other contributions: Bosnia has a unique set of additional contributions, which are not related to social security, however employers pay as a % of net salary. Those include 0.5% protection from natural and other disasters and 0.5% water protection charge.

EMPLOYEE CONTRIBUTIONS

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    Income tax: 10% flat rate
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    Social security contributions: 31%

Social security contributions: Pension and invalid insurance

Contribution amount: 17%

Social security contributions: Health insurance

Contribution amount: 12.5%

Social security contributions: Unemployment insurance

Contribution amount: 1.5%

Contribution rates may vary depending on where the employee resides, as the Federation of Bosnia and Herzegovina, Republika Srpska, and Brčko District each have their own social security regulations.

INCOME TAX

Tax type: Personal income tax

Rate: 10%

Employer of Record in Bosnia & Herzegovina

What is an EOR?

While an Employer of Record is the most typical way for legally employing a worker in a different country where the company doesn’t have an entity, in Bosnia & Herzegovina we directly employ your worker. Doing this, we take care of all Bosnian compliance aspects of employment, including payroll, taxes, statutory benefits, employment contracts and more.

EOR responsibilities

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    Ensuring their employment is compliant with local employment laws
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    Processing local payroll
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    Filing employment related taxes and returns
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    Issuing payslips to the employee
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    Distributing salary payments

How it works

  • Company

    Maintains a direct relationship with the employee, allocates them work tasks, and manages their performance.

  • Boundless

    Takes care of payroll, taxes, benefits, ensuring the employee and the company are compliant with all legal regulations.

  • Employee

    Signs an employment contract with Boundless and fulfils all of their obligations as a worker for the company.

Statutory benefits in Bosnia & Herzegovina

  • Public health insurance

    In Bosnia, public health insurance is mandatory. The total contribution is 14.5% of gross salary, with 2% paid by the employer and 12.5% by the employee. This covers healthcare services, medical treatments, and hospital care.

  • Social security contributions

    In Bosnia, social security contributions include 19.5% of gross salary for retirement insurance (2.5% paid by the employer and 17% paid by the employee) and 2% for unemployment insurance (0.5% paid by the employer and 1.5% paid by the employee).

Common non-mandatory benefits in Bosnia & Herzegovina

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    Private health insurance
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    Professional development
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    Travel and housing assistance
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    Childcare assistance
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    Emotional and physical health resources
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    Meal allowance
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Employment contract

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Right to disconnect

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Workplace health and safety

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Protection against discrimination and harassment

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Whistleblower protection

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Data protection

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Pay transparency

Paid time off

20-30 days

Sick leave

First 42 days are paid by the employer; after that payment is covered by the public health insurance

Maternity leave

12 months

Paternity leave

If the mother does not take the maternity leave, then the father can take the paternity leave.

Health and safety

Employers in Bosnia must provide a safe working environment, protective equipment, and safety training, with specialised labour inspections overseeing compliance.

Notice period

Bosnian law requires that employees receive a formal notice period before their employment contract is terminated.

Payment frequency

Employers normally pay employees once per month.

Payday

Salaries shall be paid by the employer at the end of each calendar month.

In Bosnia and Herzegovina, the dismissal of an employee is considered lawful if it is based on economic or organisational reasons, the employee’s inability to perform their duties properly, or a serious violation of work obligations. Before deciding on termination, the employer must allow the employee to present their defence regarding the alleged reasons for dismissal. If a court determines that the dismissal was unlawful, it may order the employer to reinstate the employee. The employer may also be required to pay compensation, including salary for the period of unlawful dismissal and any severance entitlements provided by law.

FAQs

There are four common ways to hire in Bosnia and Herzegovina. You can run payroll from your HQ for short-term arrangements, engage contractors for project-based work, set up a local entity to hire directly, or partner with an Employer of Record. Each option comes with different compliance and operational considerations. An EOR is often used to employ workers without setting up a local company.

Contractors work well when the relationship is project-based and the person serves multiple clients. If an individual gives their full and undivided attention to your company in Bosnia, employment is the right structure under Bosnian law, covering entitlements like paid annual leave, sick leave, and social security contributions. For project-based contractor engagements, Boundless’s Agent of Record (AOR) service handles classification, contracts, and payments compliantly in Bosnia.

HR compliance in Bosnia means your policies and procedures respect all applicable Bosnian employment laws and regulations. When you hire in Bosnia, this matters both to safeguard employee rights and to reduce employer risk. Compliance covers labour law, sick leave, annual leave (20-30 days), minimum wage (BAM 1,000/month), tax credits, and a 40-hour working week. Following these is fundamental for running the business well.

An Employer of Record is the legal employer of the individual in Bosnia for government, tax, and employment purposes. It provides a locally compliant contract, runs payroll, files employment taxes, and manages statutory benefits such as 12 months of maternity leave and 20-30 days of annual leave. You remain responsible for sourcing workers, managing day-to-day work, and funding payroll each cycle.

Boundless partners with employment lawyers and advisers in each country we operate in, including Bosnia. They ensure employment contracts and onboarding documents comply with the local jurisdiction. We hold detailed discussions on specific norms such as payroll, social protection, data protection, notice periods, and work-from-home regulations. When a sensitive issue arises, our internal team engages the relevant firm promptly.

Both employers and employees in Bosnia contribute to social security. Employers contribute 5% of gross salary covering pension (2.5%), health (2%), and unemployment insurance (0.5%). Employees pay 31% in social security plus a flat 10% personal income tax. Use the salary breakdown calculator for exact figures based on the salary you plan to offer.

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