FBiH Government will not extend subsidies to employers, but will extend tax-free aid to workers

(Patria) - The FBiH Government has determined the Draft Budget of the Federation of BiH for 2026 in the total amount of 8,898,279,146 KM, which will be sent to the parliamentary procedure for urgent adoption. The Budget of the Federation of BiH for the next year is higher by 649 million KM compared to this year's.

It was explained that the main goal of the Budget of the Federation of BiH for 2026 is sustainable public finance management, with responsible expenditure control and ensuring stable sources of financing. The budget is aimed at fulfilling obligations to citizens and institutions, with a special focus on social protection, health and pension systems, a stable business environment, and maintaining the functionality of public services.

Within the total subsidies for private companies and entrepreneurs, an amount of 23,227,134 KM is planned, which ensures the implementation of various economic policy measures aimed at stabilizing business and strengthening economic resilience. It is not yet known what these programs relate to, and according to Patria's information from the business community, the FBiH Government will not extend two decrees that were applied during 2025 after the minimum wage increased from 619 to 1,000 KM in January.

In order to preserve jobs and reduce the pressure on employers after the increase in costs, the Government adopted two decrees: the Decree on measures of financial assistance to low-accumulation activities in the Federation of Bosnia and Herzegovina in order to maintain existing jobs for 2025 and Measures of financial assistance to private employers, crafts and other independent activities in the FBiH, i.e., refund of part of contributions. For the refund of part of the contributions for 2025, the Government allocated 100 million KM. However, it is evident from the budget proposal that this amount is significantly smaller.

These two decrees will not be extended in 2026. The FBiH Government has determined the minimum wage of 1,027 KM for 2026.

At the last session of the Economic and Social Council for the territory of the FBiH, the FBiH Government announced the extension of the Decree on the payment of tax-free aid by employers during 2026. However, the monthly amount will be reduced from 400 to 250 or a maximum of 300 KM.

However, the decisions have not yet been published, neither on the minimum wage nor on the decree.