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Workers

Economic Reforms in the Federation of BiH: A Turning Point for Growth and Stability

Strategic Insights

— 1 min read

The Government of the Federation of BiH has implemented several key reforms aimed at stimulating economic growth and improving the standard of living for all citizens. The decision to set the minimum wage at 1,000 KM, effective January 1, 2025, is a significant move towards a more stable economic environment. This measure, combined with a reduction in payroll contributions, is expected to provide relief to businesses and create a more favorable environment for employment and investment.

Key Takeaways:

  • The minimum wage in the Federation of BiH has been set at 1,000 KM, effective January 1, 2025.
  • A 13.25 percent reduction in the combined contribution rate borne by employers has come into effect on July 1.
  • The Government of the FBiH expects these measures to contribute to a more stable economic environment and better conditions for workers and employers.
  • The Economic and Social Council for the territory of FBiH has endorsed the implementation of reforms and the positive effects on the labor market.
  • Employers have responded positively to the regulation on the payment of non-taxable aid to workers, with many enabling employees to receive higher incomes than before.
  • The FCG claims that there has been a noticeable increase in employment in the Federation of BiH, attributed to the implemented measures.
  • The Government will adopt a new decision on the extension of the regulation on non-taxable aid during July, with the possibility of adjusting the amount to 450 KM per employee per month.
  • The Confederation of Independent Trade Unions of BiH expects employers to show responsibility and empathy in increasing workers' salaries in response to the reduced contributions.

Statistics:

  • 1,000 KM: the minimum wage set by the Government of the FBiH, effective January 1, 2025
  • 13.25 percentage points: the reduction in the combined contribution rate borne by employers, coming into effect on July 1
  • 450 KM: the amount of non-taxable aid to workers per employee per month, as stated in the current regulation
  • July 1: the effective date of the reduction in payroll contributions
  • December 31, 2025: the proposed end date of the current regulation on aid payments, with a possible extension

Sources:

  • A statement by the Prime Minister of the Federation of BiH, Nermin NikA!ic, for FENA
  • The text of the Economic and Social Council for the territory of FBiH
  • An interview with the President of the Confederation of Independent Trade Unions of BiH, Selvedin A atorovic

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