RATE REDUCTION: Amendments to the Law on Contributions now go to the House of Peoples of the FBiH, application from July 1

(Patria) - The House of Representatives of the Federation of Bosnia and Herzegovina adopted, under an expedited procedure, the Proposal for amendments to the Law on Contributions, which reduces the aggregate contribution rate paid by employers on workers' salaries by 13.25 percent.

64 representatives voted in favor of reducing contributions, six were against, and five abstained.

The law was proposed by the Government of the Federation of BiH, and it was previously announced by the Government that this is only the first step in the fiscal reform process aimed at ultimately relieving the economy. After the House of Representatives adopted the amendments, they must also be adopted by the House of Peoples to enter into force.

The adopted legal solution would reduce the aggregate contribution rate by 13.25 percent, i.e., by five and a half index points, from 41.5 percent to 36 percent.

This law reduces the contribution rate for pension and disability insurance borne by the employer by three and a half index points, as well as the contribution rate for health insurance borne by the employer by two index points.

The plan is for this law to take effect on July 1 of this year, with an additional reduction in the contribution rate by a certain percentage from January 2026.

With these amendments, the burden on workers' salaries should be reduced by about 100 KM (more or less), depending on the amount of the base salary.