The Government of the Federation of Bosnia and Herzegovina (FBiH) adopted two regulations yesterday in an emergency session, establishing financial support for private employers through reimbursement or co-financing of contributions and providing employers with the option to pay their employees tax-free monthly aid of up to 450 BAM.
Financial assistance for private employers, crafts, and others
The Government of the FBiH adopted the Regulation on Financial Assistance Measures for Private Employers, Crafts, and Other Self-Employed Activities in the FBiH to maintain existing jobs for 2025. This regulation defines the conditions for granting financial assistance, the allocation process, the analysis of effects, and reporting procedures.
The financial assistance is allocated as a reimbursement of already paid contributions for employees for the period from January 1stto December 31st, 2025. The goal is to ensure the sustainability of beneficiaries, preserve existing jobs, and provide liquidity support during this period.
The total financial resources for implementing this regulation are secured in the FBiH Budget for 2025, within the Federal Ministry of Development, Entrepreneurship, and Crafts, amounting to 100.000.000 BAM.
Which employees does the regulation cover
The financial assistance funds under this regulation are intended to maintain existing jobs in 2025 for employees of beneficiaries who meet the conditions defined by the methodology. They will be used to reimburse the paid portion of contributions for the number of employees the beneficiary had as of November 30th, 2024, who had a net salary of less than 1.000 BAM and whose insurance registration remains continuous throughout 2025.
Financial assistance is allocated based on the Decision of the Government of the FBiH on fund distribution and is paid monthly, no later than 45 days after the end of each month in 2025.
Beneficiaries of financial assistance will use the funds as reimbursement for the already paid portion of contributions for the specified period, and the results, i.e., the effects of financial assistance, will be presented in the final report on allocated financial assistance with an effect analysis.
Which companies can apply
Financial assistance will be granted to beneficiaries (legal and natural persons) based on data from the Tax Administration of the FBiH, provided they have headquarters in the FBiH, at least one employee as of November 30th, 2024, with a net salary of less than 1.000 BAM, and at least one employee at the end of each month in 2025. They must also have recorded a net profit from business operations (for business entities) or income from self-employment (for crafts and other self-employed activities) in the last financial report of less than 6.500 BAM per employee (based on the average number of employees in 2024). Additionally, they must have no outstanding obligations for contributions and taxes as of the end of the previous month relative to the month in 2025 for which the salary is paid, must have active transaction accounts, and must have preserved existing jobs.
This applies to beneficiaries who, at the end of each month in 2025, have the same or a higher number of employees compared to November 30th, 2024. Beneficiaries may also qualify for reimbursement if they have a reduced number of employees compared to November 30th, 2024, specifically: micro and small enterprises, craftsmen, and other self-employed activities (up to 50 employees) that have a maximum of 30 percent fewer employees, as well as other employers (50 or more employees) with up to 10 percent fewer employees due to circumstances beyond the employer’s control. The right to reimbursement is also granted to exporters who, due to market disruptions, experience a revenue decline of more than 20 percent compared to the same month of the previous year and may apply to the Federal Ministry of Finance for refund approval even in cases where they have more than 10 percent fewer employees.
The regulation also defines exceptions to eligibility, the maximum allowable financial assistance amount, the allocation mechanism, and the method of assistance distribution.
Furthermore, the regulation sets coefficients for calculating financial assistance, determined by multiplying the unit coefficient value by the number of employees as of November 30th, 2024.
The rank of the coefficients and the amount of money
Coefficient 1 (50 BAM) applies to employees whose contributions were paid on a net salary of 800.01 – 999.99 BAM, coefficient 2 (100 BAM) applies to employees whose contributions were paid on a net salary of 700.01 – 800 BAM, coefficient 3 (150 BAM) applies to employees whose contributions were paid on a net salary of 620.01 – 700 BAM, coefficient 4 (300 BAM) applies to employees whose contributions were paid on a net salary of up to 620 BAM.
Based on the financial assistance allocation methodology, the Ministry will publish final decisions on financial assistance allocation in the Official Gazette of the FBiH no later than 45 days after the end of each month in 2025. Final beneficiary lists will be published on the websites of the Government of the FBiH and the Ministry after the end of each month in 2025.
The regulation enters into force the day after its publication in the Official Gazette of FBiH.
Regulation on monthly tax-free aid payments of up to 450 BAM
This regulation enables employers to pay their workers a monthly aid and defines the right to aid payments to workers by the employer, the dynamics and amount of the payment, as well as the implementation method.
Increasing workers’ earnings
As explained, the Regulation allows employers to pay their workers up to 450 BAM per month as aid with the aim of mitigating the impact of the increase in the cost of living, in such a way as to increase workers’ income from the basis of the employment relationship, without additional employer burdens for income tax and mandatory insurance contributions. With this regulation and the previously adopted Decision on the Minimum Wage for 2025, steps have been taken toward fiscal reform, which includes reducing the total mandatory insurance contribution rate and easing employer obligations.
The right to aid is granted to employers who regularly pay salaries and contributions for employees in accordance with applicable regulations and have no outstanding tax or contribution obligations, as well as exceptionally, if they have entered into an agreement with the Tax Administration of FBiH on deferring or paying obligations in installments, in accordance with special regulations governing this matter, and are duly settling their obligations as per the concluded agreement.
Employers may pay aid up to 450 BAM per month per employee, depending on their financial capacity and the conditions prescribed by this regulation. Furthermore, employers may also pay a smaller amount than the maximum. The aid can be paid from the day the regulation takes effect until its expiration date.
Conditions
The regulation prohibits employers from using this aid to reduce an employee’s salary below the level calculated and paid for November 2024. Payments must be made exclusively to employees’ transaction accounts and can be monthly, no later than the last day of the month for the previous month.
Employers must issue an internal act that will, among other things, regulate the amount and conditions for providing aid to employees. Individual decisions granting this right must be in written form.
Employers are required to submit aid payment reports to the relevant tax office by the 7th of the month for the previous month in which the aid was paid, after which the tax office will verify compliance with the conditions. The Tax Administration must submit aggregated data to the Federal Ministry of Finance by the end of each month. The Ministry will provide monthly reports to the Government of the FBiH on payments made under this regulation to monitor its effects.
This regulation enters into force on the date of its adoption, will be published in the Official Gazette of the FBiH, and will expire on July 31st, 2025, according to the official statement.
