FBiH Government clarifies minimum wage decision, but experts agree - without reforms, this is economic collapse

(Patria) - The Government of the Federation of BiH, at its last session, made a decision according to which the minimum wage will be 1,000 convertible marks, and it was also decided that this decision will apply from January 1 to December 31, 2025.

Therefore, the minimum wage in the Bosnian-Herzegovinian entity of the Federation of BiH will be increased by 381 convertible marks from 2025.

As explained, based on Article 6, Paragraph (1) of the Decree on the Methodology for Calculating and Harmonizing the Minimum Wage, the Government of the Federation of BiH determines the minimum wage for the next calendar year.

It is important to distinguish between the terms wage and worker's earnings. The Government of the Federation of BiH, by its decision, determined that the minimum wage in 2025 will be 1,000 KM, while minimum earnings will be above 1,200 KM. This is because worker's earnings are the sum of the minimum wage, meal allowance, funds allocated for worker transportation, and other non-taxable payments.

Furthermore, it is very important to emphasize that in order to overcome potential problems for craftsmen and small businesses, the Government of the Federation of BiH has foreseen a subsidy program from the budget of the Federation of BiH, the adoption of which is expected in the coming days.

As explained, the FBiH Government will pay subsidies for contributions to craftsmen and small businesses in order to preserve jobs that may be threatened due to the increase in minimum wage and earnings.

- After 11 years of waiting, we have finally managed to raise the minimum wage for workers in the Federation. We are happy with this decision primarily because workers in the Federation are satisfied with it. We have another important step ahead of us, and that is the adoption of a set of fiscal laws - said the Federal Minister of Development, Entrepreneurship, and Crafts, Vojin Mijatović.

We remind you that the Government of the Federation of BiH is already in the process of adopting a "set of fiscal laws" with the aim of facilitating business for companies in the Federation of BiH.
Namely, this is a whole set of laws, which include amendments to current regulations in the segment of income tax, contributions, and the Law on Fiscalization itself. It is important to emphasize that this issue was set as a priority for the authorities back in 2015, but it was delayed for years between the government and the parliament.

Otherwise, the Employers' Association of FBiH held an urgent extraordinary session of its Management Board last night in an expanded composition, following the session of the FBiH Government at which the Decision on the minimum monthly wage for workers in the amount of 1000 KM net was made.

In their statement, they point to the serious consequences and risks of making such a hasty decision, and note that after last week's constitutive session of the Economic and Social Council of FBiH, they prepared a draft decree on minimum worker earnings, which they stated they submitted to the President of the ESC, Safudin Čengić, who then forwarded the draft to the entity government and the trade union.

Employers are in favor of increasing workers' wages, but in a way that is possible and sustainable, as announced, which is for employers to increase net wages for workers, and for the authorities to reduce employers' obligations to the state through fiscal and other necessary reforms, and in this way, the position of workers will be improved.