FBiH Government enables employers to pay workers BAM 300 without tax, further contribution reduction possible

(Patria - At today's session of the Economic and Social Council, the Decree on the payment of non-taxable aid during 2026 was presented, which the FBiH Government is expected to adopt this week.

The proposal is that the Decree applies for the period January-June, and the payment would be made in the following month for the previous one (during February for the month of January). In the event that there is no new reduction in contributions on salaries at the employer's expense, the FBiH Government is prepared to extend the validity of the decree until the end of 2026.

The maximum monthly amount that employers can pay to workers is foreseen to be BAM 300. Each payment will have to be reported to the Tax Administration by the 7th of the month, which will monitor the application of the decree and the fulfillment of conditions.

Employers cannot pay this aid if they have reduced employees' salaries compared to November 2025.

From July 2025, the application of slightly lower contribution rates for pension and disability insurance (PIO) and health insurance began, and the Government did not fulfill its promise to make an additional reduction by the end of that year. It is planned to be done this year, but any reduction in contributions affects the filling of the PIO/MIO Fund, so it will be a challenge for the Government to maintain the stability of the fund, as well as to relieve employers of high burdens.