FBiH Government Gave 8 Million KM for January Subsidies, While Employers Paid 70 Million KM More in Contributions Alone in February

(Patria) - In mid-March, the FBiH Government adopted a decision on the payment of financial assistance to 11,889 business entities as aid to private employers, crafts, and other independent activities in the FBiH, aimed at maintaining jobs for 2025, following the increase of the minimum wage from 620 to 1,000 KM.

The assistance pertains to 61,213 workers in the FBiH, and 8,139,250 KM has been allocated for this purpose.
This concerns the payment for the month of January, when the decision on the minimum wage of 1,000 KM came into effect.

Data from the Tax Administration of the FBiH for February shows a decrease in the number of employees compared to January, with the number of employees lower by 1,733 individuals.

In January of this year, the Prime Minister of the FBiH, Nermin Nikšić, published data indicating that 187,690 workers in the FBiH receive a salary below 1,000 KM.

Employers who incurred additional costs due to the increase in the minimum wage, and consequently contributions, were required to meet certain criteria to qualify for a refund of part of the contributions.

Depending on the salary level paid as of November 30, 2024, the coefficient was multiplied by the number of workers.

A coefficient of 50 KM applies to all workers for whom contributions were paid on a net salary ranging from 800.01 to 999.00 KM as of November 30, 2024.

A coefficient of 100 KM applies to all workers for whom contributions were paid on a net salary ranging from 700.01 to 800 KM.

A coefficient of 150 KM applies to workers whose net salary as of November 30, 2024, ranged from 620.01 to 700 KM.

And the highest coefficient of 300 KM applies to workers whose employer paid a salary up to a net of 620 KM.

For example, on a salary of 620 KM, the employer paid contributions of 440 KM. On the amount of 1,000 KM, contributions amount to 744 KM.

Data from the Tax Administration of the FBiH show that in the structure of contributions for the period January - February 2025, contributions for PIO/MIO were collected in the amount of 542,831,657 KM, contributions for health insurance in the amount of 382,778,915 KM, and contributions for unemployment insurance in the amount of 44,743,774 KM.

In January 2025, contributions for pension and disability insurance, health insurance, and unemployment insurance were collected in a total amount of 449,315,945 KM. Cumulatively for the first two months, this amounted to 970,354,346 KM.

However, despite the reduction in the number of workers by 1,733 individuals, a higher contribution payment was recorded due to the increase in the minimum wage. Thus, in February, 521,038,401 KM was collected, which is a difference of 71,722,456 KM compared to January. It should be noted here that the FBiH Government planned 100 million KM for employer assistance, and in just one month, 70 million KM more in contributions were collected, which will obviously relieve the Government regarding tranches for the Federal PIO/MIO Institute. In 2024, the Government paid 511 million KM to the Fund. Monthly, 290 million KM is needed for pension payments in the FBiH, and the ratio of employed workers to pensioners has never been smaller. That number is about 80,000 in favor of workers.

More serious analyses and effects of the FBiH Government's decisions will only be possible after the first quarter, i.e., in April. However, some employers waited for the Government's decisions and the measures it would offer, but after these subsidies, there are crafts and smaller companies that cannot bear the increase in costs, i.e., they do not generate enough revenue to increase minimum wages, and there is no promised reduction in contributions, nor has the law been submitted to the procedure.

One employer who received subsidies provided Patria with a calculation of the assistance received for eleven workers. The total assistance amounted to 1,350 KM, while his cost for those eleven workers was about 6,500 KM.

For six workers whose salaries ranged from 620 to 700 KM, he received 900 KM in assistance, which is 150 KM per worker. And the cost per worker after the salary increase with contributions is nearly 700 KM.

For four workers who had salaries ranging from 700.01 to 800 KM, he received 400 KM, although the cost per worker is over 600 KM. For one worker who had a salary ranging from 800.01 to 999 KM, he received 50 KM, and with the salary increase, the cost for that worker is over 300 KM.