WILL EXISTS: Employers Ask the FBiH Government to Extend the Decree on Tax-Free Aid Payment Until the End of 2025

(Patria) - The session of the Economic and Social Council for the territory of the Federation of Bosnia and Herzegovina will be held on Monday, and one of the agenda items is the proposal for amendments to the payment of aid to workers by employers.

After the increase in the minimum wage from 619 to 1,000 KM in January this year, the FBiH Government adopted a Decree allowing employers to pay workers 450 KM monthly, in order to raise wages for those workers who, before the minimum wage increase, had a salary of 1,000 KM or more. This decree expires on July 31, and from July 1, the application of lower contribution rates begins. Although the FBiH Government has already announced that it is moving towards extending the Decree, Patria has received a Proposal from the Employers' Association on amendments to the Decree on the payment of aid to workers by employers.

"According to informal information from the field, a large number of employers actively used this opportunity to additionally pay for workers' labor and thus motivate them to continue working in the company, especially in the context of inflationary pressures and the increasingly pronounced departure of workers from the country.

Given that the validity of the Decree is expiring soon, employers are daily submitting requests to the Employers' Association for its extension, as it has proven to be an effective and useful mechanism for strengthening the labor and social security of workers.

Employers (who have used this opportunity to finance the work of their workers) propose to the Association that, through the Economic and Social Council and other forms of dialogue with the authorities, it promotes and seeks an extension of the validity of the Decree until January 31, 2026, or until December 31, 2025, but in a way that legally allows the aid to be paid along with the thirteenth salary for 2025," the proposal states.

Through the Employers' Association, employers propose extending the validity of the Decree on the payment of aid until January 31, 2026, or at least until December 31, 2025.

"The way the deadline is defined should be such that it legally enables the payment of aid along with the December salary for 2025, given that this salary is paid in January 2026. The reasons for the proposed amendment are: Retention and motivation of the workforce; Additional support for workers without additional fiscal burden, because this Decree has so far been used to adjust other salaries in companies and businesses, given that workers who are not on the minimum wage also had their salaries adjusted or expectations that they would be adjusted; Maintaining positive practice that contributes to labor market stability; Legal clarity that allows the payment of aid along with the salary for December 2025, without legal uncertainty for employers," it is stated.

Also, given that changes to contribution rates come into effect, enabling tax-free payment would encourage employers to continue with the payment. The Prime Minister of the FBiH Government, Nermin Nikšić, has already expressed the expectation that there will be an increase in workers' salaries, but with the decree, this increase would be more likely.

The FBiH Employers' Association did not propose a reduction in the amount, while Nikšić announced a possible reduction.

At this moment, and bearing in mind that we are faced with some price increases and rising living costs every day, there is a commitment from both the Government and social partners to reach an agreement for the benefit of workers.

Employers who have workers on the minimum wage, upon the start of the application of the reduced contribution rate on wages, will pay 86 KM less. For a higher base salary, this amount is even larger, but the question is how many employers will direct this towards workers' salaries, so they more easily decide to pay tax-free aid.