How to hire and pay employees in Bosnia and Herzegovina

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Bosnia and Herzegovina

Before hiring

EMPLOYEES IN
Bosnia and Herzegovina

Before hiring employees in Bosnia and Herzegovina, there are some key things you’ll need to know. Firstly, in Bosnia and Herzegovina, employees are entitled to 20 days of paid holiday that must be used. 

It’s also important for employers to know that health insurance registration is compulsory. Employees in Bosnia and Herzegovina must provide evidence that they are registered for mandatory health insurance within 15 days after their start date.

We know keeping track of all this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in Bosnia and Herzegovina below. 

At a glance

CURRENCY

BAM

OFFICIAL LANGUAGE

BOSNIAN

PAYROLL FREQUENCY

MONTHLY

PUBLIC HOLIDAYS

4

(based on region;
see here
)

EMPLOYER TAXES

12.3%

of gross salary

13th / 14th SALARY

N/A

Good to know

  • In Bosnia and Herzegovina, there are separate administrative entities, the two main ones being the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS). Specific employment rules are dependent on which region the employee is based in.
  • When a company is hiring employees on behalf of another company, the term of employment is limited to three years. After this period, the employee would need a change of job title to remain employed.
  • Health insurance registration is compulsory in Bosnia and Herzegovina.

Labor laws in

Bosnia and Herzegovina

Working hours and overtime

A standard workweek in Bosnia and Herzegovina is 40 hours. Employees are entitled to a break of at least 30 minutes when working more than 6 hours daily, and at least a continuous period of 24 hours weekly.

On request, employees can perform up to eight hours of overtime a week. The amount to be paid varies by industry and is based on collective agreement.

Employment contracts

Probationary period

In Bosnia and Herzegovina, probationary periods must be no longer than six months.

Pensions

Non-compete agreements

Non-competition agreements or clauses are allowed in Bosnia and Herzegovina for a period of up to two years. To be enforced, employers must commit in their contract to paying the employee at least half of their average salary from the three months before the termination. These amounts must be paid by the employer at the end of each calendar month.

Calculate costs to hire internationally

Benefits and leave in

Bosnia and Herzegovina

Vacation time

Statutory annual holiday entitlement is 20 days and must be used. Employees are paid the same amount of salary they would get if they were working during that time.

If the employee takes a break of over 15 days between jobs, then they would only be entitled to full annual vacation after six months of employment in the calendar year.

All types of leave must be recorded, approved by management each month and provided to the employer.

Paid leaves of absence are also available for up to seven working days in a calendar year for their wedding, their partner giving birth or for cases of serious disease or death of a member of their household or immediate family.

Sick leave

Statutory annual holiday entitlement for employees in Bosnia and Herzegovina is 20 days and must be used. The employee will be paid the same amount of their salary they would get if they worked during that time. 

If an employee takes a break of over 15 days between jobs, they would only be entitled to full annual vacation after six months of employment in that calendar year.

All types of leave must be recorded, approved by management each month, and provided to the employer.

Parental leave

Depending on medical advice, an employee can start their maternity leave up to 28 days before the expected due date, and up to one year after the birth. At minimum, they must take 42 to 60 days after the delivery depending on where in Bosnia and Herzegovina they are located. After this point, the father can also exercise their right to paternity leave instead, if both parents agree.

After the first year, one parent will have the right to request working half their usual hours until the baby is two years of age, and will be entitled to compensation of salary for the hours not worked.

The Labor Act protects women who are pregnant, on maternity leave, or using the part time work benefit (available up until the child is one or two years of age, depending on the number of children) from having their employment terminated for any reason.

An employee can take seven working days of paid leave in a calendar year when their partner gives birth.

Holidays

View a list of recognized public holidays in Bosnia and Herzegovina here.

Employer tax

In Bosnia and Herzegovina, social contributions for employers are 10.5% and include unemployment insurance, disability fund, and unemployment contributions. Employers are also required to make contributions for accident, water, and disability, totalling 1.8% of an employee’s salary.  

Individual tax

All employees are taxed 10% regardless of their income bracket. Employees also pay social security contributions of approximately 31%. That includes pension, health, and unemployment tax.

Employees must provide proof that they are registered for mandatory health insurance within 15 days after their start date. 

Termination in

Bosnia and Herzegovina

Minimum severance payments are payable on redundancy if someone has been employed for two years. The payment would be the lower of:

  • A third of the employee's average salary in the three months before termination, times their total number of years of employment; and
  • Six average salaries of the employee in the three-month period before the termination
Notice period

In Bosnia and Herzegovina, employees are required to give a minimum of seven days notice, and a maximum of 30 days notice. 

Employers are required to give a minimum notice period of 14 days, and a maximum of three months notice. 

Employer can terminate employment with notice because of:

  • Economical, technical, or organisational reasons
  • If the employee is unable to perform their work duties

No notice is required if either party is in severe breach of contract.

In case of a violation of work duties, notice of termination can be given within 60 days of finding out about the violation, and up to a year after the incident took place.

Start hiring employees in

Bosnia and Herzegovina

Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

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