For ten minimum wage workers, the employer has an additional monthly cost of 6,840 KM, and the Government provides a subsidy of 3,000 KM

(Patria) - The FBiH Government is expected to adopt two decrees today, one relating to the refund and subsidy of part of contributions due to the increase in the minimum wage and related contributions, and a decree on the payment of aid to workers.

Regarding subsidies to private employers, crafts, and other self-employed activities in FBiH with the aim of maintaining jobs for 2025, four coefficients for calculating subsidies were determined at yesterday's session, which are multiplied by the number of employees.

A coefficient of 50 KM applies to all workers for whom contributions were paid on a net salary of 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 of 700.01 to 800 KM.

A coefficient of 150 KM for workers whose net salary as of November 30, 2024, was between 620.01 and 700 KM.

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

It is clear that employers with the highest costs due to the increase in the minimum wage will receive the largest subsidies. And we will show what this will look like in practice using the example of the smallest and largest subsidies.

The minimum wage in 2025, in the amount of 1,000 KM, also carries additional expenses for duties, i.e., taxes and contributions, in the total amount of 744 KM. For an amount of 620 KM, the employer had costs amounting to 440 KM for contributions.

If an employer has ten employees with a salary of 620 KM, the total additional monthly costs for increasing the salary to 1,000 KM are 3,800 KM, and for the difference in contributions on a net salary of 1,000 KM per worker, an additional 304 KM is needed, which for ten workers amounts to 3,040 KM.

Per worker, this is an increase of 684 KM, and for ten workers on a monthly basis, it is 6,840 KM.

This employer is entitled to the highest coefficient of 300 KM, so for ten workers, if they meet all the prescribed conditions, they will receive 3,000 KM in subsidies.

Regarding the smallest coefficient of 50 KM, it applies to workers who had a net salary of 800.01 to 999 KM.

An employer who paid ten employees 800 KM net salary will have an additional monthly cost of 2,000 KM just for the salary difference. Regarding contributions and taxes, on a monthly basis for one worker, they amounted to 584 KM, and now they will have to pay an additional 160 KM per worker. For ten workers, this is 1,600 KM. With the increase in salaries and contributions, monthly costs increase by 3,600 KM.

For ten workers, that employer can receive 500 KM in subsidies.

To be eligible for the subsidy, the employer must meet certain conditions, the most important being that they have regularly paid salaries and contributions, that they have not reduced the number of employees because they cannot receive a subsidy for that month, and that the profit per employee does not exceed 6,500 KM.

All details of the decree should be known tomorrow or upon publication in the Official Gazette of FBiH.

As stated at yesterday's press conference, employers can expect the first subsidies by mid-March, and the FBiH Government has allocated 100 million KM for this purpose in the budget.

Not all employers could keep up with this measure of increasing the minimum wage and costs, especially those with a large number of employees, after the non-working Sunday was first introduced. Therefore, the closure of some business entities, reduction of operations and number of employees, and deregistration of workers are already noticeable...