During Nermin Nikšić's three-year government: Number of employed rose by 5,570, while number of pensioners increased by as many as 31,237

(Patria) - The Government of the Federation of Bosnia and Herzegovina did not fulfill the promise made in 2025 to further reduce the contribution rate paid by employers, after the rate was reduced from 41.5 to 36 percent, effective from July 1, 2025.

Since the beginning of that year, the minimum wage also increased from 619 to 1,000 KM, and the FBiH Government opted for two measures. One was to co-finance part of the contributions for private employers, and the other was to enable the payment of tax-free aid to workers of up to 450 KM per month. At the same time, the Tax Administration of the FBiH recorded a decline in the collection of contributions for pension and disability insurance (PIO) and health insurance, while the number of pensioners constantly grew, and the number of employed persons experienced both declines and slight increases, as well as stagnation.

When the government of Nermin Nikšić was voted in, according to the records of the Tax Administration of the FBiH in April 2023, there were 539,303 employed persons, while the number of pensioners stood at 435,531. Three years later, in April 2026, the number of employed persons was 544,873, while the number of pensioners significantly increased to 466,768.

In summary, over three years, an increase of 5,570 employed persons was recorded, while the number of pensioners rose by as many as 31,237. The current difference between the number of employed persons and the number of pensioners is only 78,105. The Employers' Association of the FBiH warned that this trend is unsustainable and that, to maintain the liquidity of the pension fund, the number of workers should be increased by 200,000, especially considering the age structure of employees and the generational shift.

The FBiH Government allocated 100 million KM for subsidies to private employers during 2025, and approximately that much less was collected in contributions. After the application of the lower contribution rate began, the Government reduced the amount of subsidies and the amount of tax-free aid that employers can pay to workers, provided that they do not previously reduce their salary compared to the month of November of the previous year.

At the beginning of February 2026, the FBiH Government adopted a decree on the payment of tax-free aid, reducing the amount to 300 KM per month. The decree is not mandatory, but a significant number of employers use it.

The decree is valid until June 30, with the last payment possible by July 31, 2026. The Government left the possibility of extending this decree.

Given that the Government has not proposed amendments to the Law on Contributions and that the application of the Law on Fiscalization of Transactions, which was supposed to be one package of fiscal reforms, has not yet begun, the Government will likely extend the decree on tax-free aid, while through the Ministry of Development and Entrepreneurship, more than 21 million KM in current transfers were recently allocated - subsidies to private companies and entrepreneurs, within the program - support for the small business sector with the aim of strengthening competitiveness.

The Law on Fiscalization of Transactions states that the law begins to apply after the adoption of all necessary by-laws for its implementation and the establishment of technical and administrative capacities required for its implementation, and no later than 18 months from the month in which the Law entered into force. The Law was adopted in January 2026.

At the same time, the government of Nermin Nikšić is taking on debt, and the shortfall for pension payments is covered from the FBiH Budget. Thus, for the month of April, 355.4 million KM was needed for pension payments.