Payroll Services in Bosnia and Herzegovina
Fully managed payroll across the Federation of BiH and Republika Srpska: 31% employee contributions, income tax at 10% or 8% and each entity’s own rules, with a named specialist a phone call away.
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What a payroll company in Bosnia handles for you
Bosnia and Herzegovina has no single payroll system. The Federation of BiH and Republika Srpska each have their own contribution, income tax and labour laws, and Brčko District has its own income tax law. The same gross salary gives a different net pay and employer cost depending on where you are registered.
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Calculate Your Employee Costs in Bosnia and Herzegovina
Enter a gross annual salary to see the employer’s contributions in the Federation of BiH for 2026: 5% of gross salary. In Republika Srpska the employer pays no contributions on top of gross salary.
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*Indicative figures only and not definitive legal advice. Local regulations change frequently. Consult an expertBosnia & Herzegovina
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|---|---|---|
| Base Salary (per month) | ||
| Employer Contributions | ||
| Total Cost (Annual) | ||
| Total Cost (Monthly) |
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Employer Costs in Bosnia and Herzegovina Explained
Employers in the Federation of BiH pay 5% of gross salary in contributions plus two small levies on net pay. Employers in Republika Srpska pay no contributions on top. In both, employees pay 31% from gross salary.
Employees pay 17% for pension and disability insurance, 12.5% for health and 1.5% for unemployment. Since 1 July 2025 employers pay 2.5%, 2% and 0.5%, a total of 5%, down from 10.5%.
The base can’t be lower than the minimum wage. Contributions fall due when the salary is paid. If it isn’t paid, they are still calculated and due by the last day of the month in which payment was due.
Employees pay 18.5% for pension and disability insurance, 10.2% for health, 0.6% for unemployment and 1.7% for child protection, a total of 31%. Employers pay no separate contribution.
Contributions are due with each salary payment, on a base no lower than the minimum gross wage, and the monthly return is due by the end of the following month. Workers must be registered before they start, with fines of KM 10,000 to 30,000 for an employer that doesn’t.
In the Federation, tax is 10% on gross pay after contributions and a basic allowance of KM 300 a month, more with dependants on the employee’s tax card. The employer files its pay, contribution and tax data by the 15th of the following month and gives each employee an annual statement by the end of February.
In Republika Srpska, tax is 8% after a basic allowance of KM 1,000 a month. Brčko District applies 10% after an allowance of KM 1,200 a month, and its employees can choose the Federation or Republika Srpska pension fund.
On KM 3,000 gross a month in the Federation, the employer pays KM 150 in contributions and about KM 19 in levies, for a cost of KM 3,168.93. The employee takes home KM 1,893.
On the same gross in Republika Srpska, the employer’s cost stays at KM 3,000 and the employee takes home KM 1,984.40.
Both entities set a minimum of 20 working days’ annual leave. In the Federation the week is 40 hours, probation lasts up to six months, and minimum notice is 14 days from the employer and 7 from the employee. Severance after two years is at least a third of average monthly pay per year of service, up to six months’ pay. In Republika Srpska minimum notice is 30 and 15 days.
In the Federation, a draft of a new Labour Law went to the Government in January 2026 and isn’t yet in force. Foreign employment rules changed on 23 May 2026: cantonal services decide on work permits within 30 days, and renewals are filed 60 to 30 days before expiry.
Payroll rates in Bosnia and Herzegovina, 2026
| Item | Federation of BiH | Republika Srpska | Applies to |
|---|---|---|---|
| Employee: pension and disability | 17% | 18.5% | Gross salary |
| Employee: health | 12.5% | 10.2% | Gross salary |
| Employee: unemployment | 1.5% | 0.6% | Gross salary |
| Employee: child protection | None | 1.7% | Gross salary |
| Total employee contributions | 31% | 31% | Gross salary |
| Employer contributions | 5% | None | Gross salary |
| Income tax | 10% | 8% | Gross pay after contributions and allowance |
| Basic personal allowance | KM 300 | KM 1,000 | A month |
| Minimum wage | KM 1,027 net | From KM 1,000 net | A month |
Employer contributions in the Federation of BiH
| Contribution | Until 30 June 2025 | Since 1 July 2025 |
|---|---|---|
| Pension and disability | 6% | 2.5% |
| Health | 4% | 2% |
| Unemployment | 0.5% | 0.5% |
| Total | 10.5% | 5% |
Gross to net and employer cost in Bosnia and Herzegovina, monthly
| Monthly gross salary | Entity | Employee contributions | Income tax | Net pay | Total employer cost |
|---|---|---|---|---|---|
| KM 2,000 | Federation | KM 620 | KM 108 | KM 1,272 | KM 2,112.72 |
| KM 2,000 | Republika Srpska | KM 620 | KM 30.40 | KM 1,349.60 | KM 2,000 |
| KM 3,000 | Federation | KM 930 | KM 177 | KM 1,893 | KM 3,168.93 |
| KM 3,000 | Republika Srpska | KM 930 | KM 85.60 | KM 1,984.40 | KM 3,000 |
| KM 6,000 | Federation | KM 1,860 | KM 384 | KM 3,756 | KM 6,337.56 |
| KM 6,000 | Republika Srpska | KM 1,860 | KM 251.20 | KM 3,888.80 | KM 6,000 |
The table assumes a full-time employee with the basic allowance only. The Federation’s employer cost includes 5% contributions and two levies of 0.5% each on net pay, for disaster protection and water. It excludes the disability employment fee where it applies, and meal, transport and holiday allowances under collective agreements. These are TopSource calculations from the verified rates.
Rates and thresholds shown were verified on 2 November 2026 against the current contribution, income tax and labour laws of the Federation of BiH and Republika Srpska and the 2026 minimum wage decisions. This page is general information, not tax or legal advice.
How our Bosnia and Herzegovina payroll service works
Why Choose TopSource for Global Payroll in Bosnia and Herzegovina
TopSource for payroll, Employer of Record or any other of our services represents a simpler, more reliable and transparent option. If you would rather not employ staff in Bosnia and Herzegovina directly, our Employer of Record in Bosnia and Herzegovina can employ them on your behalf.
We don’t hide fees or sneak price increases. We run Bosnian payroll in-house and file under your own tax registration rather than a bureau’s, so the same team that pays your salaries answers your calls. You get a named account manager, one consolidated monthly invoice covering salaries, contributions and fees, and one live Portico view of Bosnia and Herzegovina beside every other country we run for you, across the Balkans and beyond. Portico syncs with your time-tracking, leave and HR systems via API – set up by our onboarding team, not left to yours. GDPR, SOC 2 and ISO 27001 certified.
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Accelerating your growth in Bosnia and Herzegovina and beyond
TopSource goes far beyond payroll, acting as your end-to-end partner in global workforce management. From Employer of Record (EOR) services and seamless entity setup to localized accountancy and fractional HR support, we cover every aspect of international employment.
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Whether you’re entering the market or scaling operations, our specialists provide the insight and guidance you need to succeed in one of the world’s most dynamic and regulated employment landscapes. With TopSource, you’re backed by real experts, every step of the way.
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Bosnia and Herzegovina payroll FAQs
In the Federation of BiH, employers pay 5% of gross salary, down from 10.5% since 1 July 2025, plus levies of 0.5% each on net pay. In Republika Srpska, employers pay no contributions on top of gross salary.
31% of gross salary in both entities, split differently. In the Federation: 17% pension, 12.5% health and 1.5% unemployment. In Republika Srpska: 18.5% pension, 10.2% health, 0.6% unemployment and 1.7% child protection.
On gross pay after contributions and the allowance: 10% after KM 300 a month in the Federation, 8% after KM 1,000 a month in Republika Srpska, and 10% after KM 1,200 a month in Brčko District.
In both entities contributions are due with each salary payment. In the Federation the employer reports pay data by the 15th of the following month. In Republika Srpska the monthly return is due by the end of the following month.
On KM 3,000 gross a month, about KM 3,169 in the Federation with KM 1,893 net pay, or KM 3,000 in Republika Srpska with KM 1,984.40 net pay. Tell us the role and salary and we’ll send the full cost within one business day.
KM 1,027 net a month in the Federation. In Republika Srpska it is KM 1,000 net, rising to KM 1,050, 1,100, 1,350 and 1,450 by the qualification a job requires.
Each entity has its own contribution, income tax and labour laws. The total employee rate matches at 31%, but the employer’s share, tax rate, allowance, minimum wage and notice periods don’t.
In the Federation minimum notice is 14 days from the employer and 7 from the employee, and severance after two years is at least a third of monthly pay per year, up to six months’ pay. In Republika Srpska notice is 30 and 15 days.
Since 23 May 2026 cantonal employment services must decide within 30 days of a complete application, and employers file renewals 60 to 30 days before expiry. Shortage occupations skip the unemployment register check.
Running payroll there means a registered company or business unit in the relevant entity. TopSource can run payroll for your Bosnian entity or employ your team through our Employer of Record service.
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