ESC to meet on June 30: Decree on tax-free aid to workers to be extended, monthly amount will be lower than the current 450 KM

By Amra Vrabac

On Monday, June 30, the Economic and Social Council for the territory of FBiH will hold a session, with several items on the agenda.

According to information obtained by Patria, at that session, an analysis will be conducted on the implementation of decrees issued by the FBiH Government after it increased the minimum wage from 619 to 1000 KM in January of this year.

The members of the ESC will thus receive data on the implementation of decrees, namely the Decree on the payment of aid to workers by employers from January to the end of May, and the Decree on measures of financial aid for preserving jobs in FBiH for the year 2025. The FBiH Government, through the relevant Ministry of Development and Crafts, has refunded a portion of contributions to employers after the minimum wage increase. Out of the 100 million KM allocated for this purpose, 37,411,000 KM has been paid out for the first four months.

The number of business entities that have benefited from refunds from January to April has decreased by 2,500, so there will likely be a discussion about the reasons for the drop in the number of employers who have qualified.

The ESC will also consider the Proposal for amendments to the Decree on the payment of aid to workers by employers, which will most likely be extended until the end of this year. The decree is valid until July 31, and the maximum monthly tax-free amount per worker that could be paid was 450 KM. Employers were obliged to submit data on payments made for the previous month to the FBiH Tax Administration by the 7th of each month. So far, the Tax Administration has not published data on how many employers in FBiH have used this right and how much money has been paid to workers.

The Federal Prime Minister Nermin Nikšić stated in an appearance on FTV's Dnevnik D on Thursday that the extension of the decree is being considered and that discussions are ongoing regarding the amount of aid, as the maximum amount will certainly be reduced. This decree was supposed to cease to be valid when the reduced contribution rates come into effect, which starts from July 1.

Under the new calculation, employers will pay 85.91 KM less in contributions to the state, so the total payroll cost per employee will be 1,657.91 KM instead of the current 1,743.82 KM if the employee is registered at the minimum wage (1,000 KM). If the base is higher, the employer's savings are also higher. It is expected that employers will direct this "surplus" towards increasing workers' wages, but this will depend on the will of each employer.

Furthermore, the ESC will also consider information on the activities of the FBiH Government and Parliament in adopting legal and sub-legal acts aimed at implementing fiscal reforms in 2025.

The Government had previously announced the adoption of the Law on Fiscalization of Transactions, but it has not yet been adopted by the Government. Also, after reducing the contribution rate, the Government announced a further reduction that would apply from January 2026. However, these amendments are not yet in the FBiH Parliament, although there is still time.