Decree on Tax-Free Aid: Employers Cannot Apply It If They Reduced Workers' Salaries Compared to November 2025

(Patria) - The Government of the Federation of Bosnia and Herzegovina today, at a telephone session, upon the proposal of the Federal Ministry of Finance, adopted the Decree on the payment of aid to workers by employers in 2026. This decree regulates the right to payment of aid to workers by the employer, the dynamics and amount of payment, as well as the method of implementation.

As explained, this decree enables employers to pay their workers up to 300 KM per month as aid aimed at mitigating the consequences of increased living costs, in a way that increases workers' income from employment, without additional burden on employers in terms of paying income tax and contributions for mandatory insurance.

In accordance with the Decree adopted today, the right to this aid is held by a person who has an employment relationship with the employer in accordance with the Labor Law.

Aid can be paid by employers who regularly pay salaries and pay contributions for employees in accordance with applicable regulations, and have no outstanding obligations based on income tax and contributions for mandatory insurance prescribed by the Law on Contributions, and exceptionally, if they have concluded an agreement with the Tax Administration of the Federation of BiH on deferment or installment payment of obligations, in accordance with special regulations governing this, and regularly settle obligations in accordance with the concluded agreement.

Based on this decree, the employer may pay aid to his workers up to 300 KM per month in accordance with financial capabilities and rules prescribed by this decree. Also, the employer may pay aid to the worker in an amount lower than this amount.

The decree also stipulates that this aid can be paid for the months from January to June 2026, and the payment of aid for June of this year can be made no later than July 31, 2026.

It is also prescribed that the employer cannot apply the provisions of the Decree in a way that reduces the worker's salary that was calculated and paid for November 2025. The salary for November of last year, within the meaning of this provision, is the salary without increases for overtime work, night work, work on weekly rest days, work on holidays or other days designated by law as non-working days, or other salary increases that the employee is entitled to in accordance with labor regulations.


Payment of aid will be made exclusively to workers' transaction accounts. This aid is not considered salary or compensation for salary under the provisions of the Labor Law.

The decree also stipulates that the payment of aid to employees can be made monthly for the month to which the aid relates, and only after the expiration of that month, in the period from the first day, and no later than the last day of the following calendar month. The employer is obliged to adopt an internal act which will, among other things, regulate the amount and conditions for payment of aid to workers. Individual acts, adopted by the employer for exercising the right to aid, must be adopted in writing.

The Decree adopted today also stipulates that the employer is obliged, by the 7th of the month for the previous month in which the aid payment was made, to submit a report on the aid payment to the competent tax office. Upon receipt of this report, the Tax Administration will check the fulfillment of conditions for the payment of aid prescribed by this decree. The report form is an integral part of the Decree.

The Tax Administration is obliged to submit aggregate data from these reports to the Federal Ministry of Finance by the end of the month for the previous month. The Ministry will monthly submit to the Government of the Federation of BiH information on payments made, in accordance with this decree, with the aim of monitoring its effects.

This decree enters into force on the day of its adoption and will be published in the Official Gazette of the Federation of BiH, and ceases to be valid on June 30, 2026.