Hire in Bosnia and Herzegovina

EOR in Bosnia and Herzegovina

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Bosnia and Herzegovina, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Bosnia and Herzegovina ―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in Bosnia and Herzegovina and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in Bosnia and Herzegovina

The labor acts of the respective political entities regulate overtime pay, regular hours of work, leave, wage payment, and termination pay. A revised labor code for the Brcko District has been in effect since January 1, 2020.

Employment contracts in Bosnia and Herzegovina

As you look to hire employees in Bosnia and Herzegovina, here are some standard regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours

Federation of Bosnia and Herzegovina: The workweek may be divided into a five- or six-day week unless a contract or collective bargaining agreement specifies a shorter workweek than 40 hours. Employers may have employees work up to eight additional hours per week.

Republika Srpska: The normal workweek is five days and 40 hours per week. Employers may specify fewer hours in a week, but the workweek must be at least 36 hours. Employers may have employees work up to 10 additional hours per week, with a maximum of four additional hours in one day. Employees may not work more than 180 hours of overtime per year, which may be extended to a maximum of 230 hours per year through a collective agreement.

Brcko District: Under the district’s revised labor code, effective January 1, 2020, the workweek is 40 hours and maybe five or six days. Employers may have employees work up to 10 additional hours per week at the employer’s written request, with up to a maximum of 300 hours per year.

In all three political entities, the normal amount of working time per week is 40 hours. Employees must receive one weekly day of rest, generally Sunday.

Compensation

As you consider the appropriate salary to offer new employees, keep in mind:

• The minimum wage in the Federation and Bosnia and Herzegovina is subject to determination by a collective agreement, which is agreed upon by an organization representing all employers in the political entity and an organization representing all trade unions in that entity and approved by the entity’s government. The minimum wage in Republika Srpska is determined by the republic’s government, while the Brcko District requires a minimum wage but does not specify an amount.
• Federation of Bosnia and Herzegovina: Effective January 1, 2016, the hourly minimum wage is 2.31 KM. Employees must be paid at least 125% of their net hourly wage for overtime work.
• Republika Srpska: Effective June 1, 2021, the minimum monthly wage is 540 KM. Employees are entitled to extra pay for overtime work, but there is not a governmentally prescribed amount.
• Brcko District: The revised labor code, effective January 1, 2020, requires employees to be paid a minimum wage set by the employer, which must be at least the minimum contribution base for entities’ social taxes; however, starting July 1, 2021, only Republika Srpska has a minimum contribution base for social taxes, which is its gross minimum wage.

As your employer of record in Bosnia and Herzegovina, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses

None of the political entities require employers to pay bonuses to employees.

Termination and severance

In all political entities, employers are required to pay employees severance pay (otpremnia or отпремнина) if they have completed at least two years of service with the employer.

Federation of Bosnia and Herzegovina: Employers must give at least 14 days’ written notice before terminating an employee. Employees must give seven days’ notice before terminating an employment relationship. A longer period may be prescribed by a collective bargaining agreement or an employment contract, up to a maximum of one month’s notice from the employee or three months’ notice from the employer.

The amount of severance pay may be determined by a collective bargaining agreement or an employment contract but must be between one-third and six times the employee’s average monthly salary from the last three months before termination for each year of service.

Employees are entitled to compensation for unused annual leave.

Republika Srpska: Employers must give at least 30 days’ written notice before terminating an employee. A longer notice period must be determined by the employer for employees with more experience.

Employees must give 15 days’ notice before terminating an employment relationship. Employees must also be given at least one day of leave during the notice period to find new employment.

The amount of severance pay may be determined by a collective bargaining agreement or an employment contract but must be between one-third and six times the employee’s average monthly salary from the last three months before termination for each year of service.

Brcko District: Under the district’s revised labor code, effective January 1, 2020, employers must give at least 15 days’ written notice before terminating an employee. Previously, the notice period was at least 14 days.

The minimum severance pay is one-third of the employee’s average monthly salary from the last three months before termination for each year of service.

Employee benefits and paid leave in Bosnia and Herzegovina

When negotiating terms of an employment contract with a candidate in Bosnia and Herzegovina, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave

Federation of Bosnia and Herzegovina: Female employees are entitled to a one-year period of maternity leave, which may begin up to 28 days before the expected date of birth. Employees may take maternity leave for a shorter period, but it must last at least 42 days after the birth of the child. After the end of 42 days, the father may also use maternity leave by agreement.

Employees taking maternity leave are entitled to receive compensation, but the amount of the employee’s salary to which they are entitled varies by canton.

Republika Srpska: Female employees are entitled to one year of maternity leave, starting up to 28 days before the expected date of birth.

The maternity leave period is 18 months for twins, as well as for each child, starting with the third child.

Employees may take maternity leave for a shorter period, but it must last at least 60 days after the birth of the child. If the employee does so, she is entitled to a one-hour break to express breast milk. After 60 days, the father may use maternity leave instead of the mother.

Employees taking maternity leave are entitled to receive their average salary from the previous 12 months before the start of maternity leave. Employers may apply to Republika Srpska’s Public Child Protection Fund (Јавног фонда за дјечију заштиту Републике Српске, abbreviated as ЈФДЗ) for reimbursement of compensation paid to employees on maternity leave.

Effective starting with 2020, 100% of the compensation paid to employees on maternity leave may be reimbursed by the Public Child Protection Fund. Effective in 2019, 80% of the compensation paid to employees on maternity leave could be reimbursed by the Public Child Protection Fund.

Brcko District: Female employees are entitled to a one-year period of maternity leave, which may begin up to 28 days, but no less than seven days, before the expected date of birth. Employees may take maternity leave for a shorter period, but it must last at least 42 days after the birth of the child.

The maternity leave period is 18 months for twins, as well as for each child starting with the third.

Under the district’s revised labor code, effective January 1, 2020, either parent may work part-time after the expiration of maternity leave until the child reaches three years of age if the child needs additional care. Previously, this period of part-time work was the same length as the length of maternity leave.

The district pays the wages of employees on maternity leave. Previously, employers were to pay the wages of employees on maternity leave for three months, or 42 days if the employee opted to take maternity leave for a shorter period, with the district paying the remaining wages.

Vacation

Federation of Bosnia and Herzegovina: Employees are entitled to between 20 and 30 days of paid annual leave each year after working for an employer for six months. Employees who are minors are entitled to at least 24 days of annual leave. Employees who are not yet entitled to statutory annual leave are entitled to at least one day of annual leave for each month of completed employment.

Employees may divide the entitlement of annual leave accumulated in a year into two parts. The first part must be at least 12 days and must be taken during the current calendar year, while the remainder must be taken by June 30 of the following year.

Employers determine with input from the employee when annual leave is taken and must notify employees in writing of the length and timing of periods of annual leave at least seven days before the period begins.

Republika Srpska: Employees are entitled to at least 20 days of paid annual leave each year after working for an employer for six months in a calendar year. Employees working in unavoidably dangerous working conditions are entitled to 30 days of annual leave. First-time employees and employees who went longer than 30 days between ending work with a previous employer and beginning work with a new employer are entitled to at least one day of annual leave for each month of completed employment. Employees intending to switch employers must take their annual leave before terminating employment with their current employer.

Annual leave accumulated during a year may be used in multiple parts. One part must be at least 10 days and must be taken during the current year, while the remainder must be taken by June 30 of the following year. Employers determine when annual leave is taken with input from employees and must notify employees in writing by June 30 each year.

Brcko District: Under the district’s revised labor code, effective January 1, 2020, employees are entitled to between 20 and 30 days of paid annual leave after six months of completed employment with an employer, increasing from a minimum of 20 days by one day for each three years of service. Minor employees are entitled to at least 24 days of leave, and employees in certain industries who work in unavoidably dangerous working conditions are entitled to between 30 and 35 days of leave. Employees who are not yet entitled to the statutory annual leave are entitled to at least one day of annual leave for each month of completed employment. A five-day workweek must be used to calculate the length of annual leave.

Annual leave may be used in multiple parts, one of which may be used in the current year and one by June 30 of the following year. While employers determine when annual leave is taken, under the district’s revised labor code, employees may use up to five days of leave when they wish but must notify the employer five days in advance of taking that leave.

Holidays

Public holidays are generally specified by the political entities. Two public holidays for which paid leave is required are specified by the national government for all political entities:

• New Year’s Day (two days)
• Labor Day (two days)

Federation of Bosnia and Herzegovina: The additional paid public holidays include:

• Independence Day
• Statehood Day

Employees are also entitled to up to four days of leave per year to celebrate religious holidays, of which two days are paid and two days are unpaid.

Employees must be paid at least 140% of their net hourly wage for work on public holidays.

Republika Srpska: The additional paid public holidays are:

• Orthodox Christmas Eve
• Christmas Day
• Republika Srpska Day
• Victory over Fascism Day
• Catholic Good Friday
• Catholic Easter
• Orthodox Good Friday
• Orthodox Easter
• Ramazanski bajram (known internationally as Eid al-Fitr)
• Kurban bajram (known internationally as Eid al-Adha)
• Anniversary of the Dayton Agreement.
• Catholic Christmas Eve
• Christmas Day

If the second day of the New Year or Labor Day holidays occurs on Sunday, it is moved to the following Monday.

Except for the Good Friday holidays, all Republika Srpska religious holidays are celebrated for two days.

Brcko District: The only additional public holiday for which paid leave is required is in recognition of the anniversary of the district’s establishment.

The specified religious holidays include:

• Orthodox Christmas
• Catholic Easter
• Orthodox Good Friday
• Ramazanski bajram (known internationally as Eid al-Fitr)
• Kurban bajram (known internationally as Eid al-Adha)
• Catholic Christmas

If a holiday occurs on Sunday, it is moved to the following business day. The holiday given for Catholic Easter, while not specified as Easter Monday, therefore coincides with Easter Monday.

Employees are entitled to two days of paid leave to celebrate religious holidays. Previously, employees were entitled to up to four days of leave per year to celebrate religious holidays, of which two days were paid and two days were unpaid.

Health coverage

Federation of Bosnia and Herzegovina: Employees are assessed a pension and disability insurance tax rate of 17%, a health insurance tax rate of 12.5%, and an unemployment insurance tax rate of 1.5%, for a total employee social tax rate of 31%.

Employers have assessed a pension and disability insurance tax rate of 6%, a health insurance tax rate of 4%, and an unemployment insurance tax rate of 0.5%, for a total employer-social tax rate of 10.5%.

Republika Srpska: Effective July 1, 2021, the minimum contribution base for most employees is the gross minimum wage.

Brcko District: Employees are assessed a health insurance tax rate of 12% and an unemployment insurance tax rate of 1.5%, for a total employee social tax rate of 13.5%.

Additional benefits

In addition to healthcare benefits, employees in Bosnia and Herzegovina are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance.

Employer social costs will cover a large portion of employee benefits in Bosnia and Herzegovina, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance if needed.

Updated: August 09, 2024

Employee onboarding with an employer of record in Bosnia and Herzegovina

We write and validate all local employment contracts, streamlining the onboarding process for you and your Bosnian and Herzegovina employees—all you have to do is provide relevant information and review and approve the employment agreement. As your employer of record in Bosnia and Herzegovina, we will:

• Schedule a welcome call to discuss HR and employment information for Bosnia and Herzegovina, as well as answer any questions
• Prepare a customized employment contract in English or other local language
• Share the employment contract and benefits information with the new employee for signature and review
• Gather tax and banking information from the employee to set up payroll
• Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll

The entire onboarding process for the employee is often completed in as little as two weeks.

Partner with Safeguard Global as your Bosnia and Herzegovina employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Bosnia and Herzegovina. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.