Compensation and benefits are 2 of the most important priorities for all global employees. Providing a high level of compensation and giving more than just the statutory benefits will help you attract top talent and encourage employees to stay in their positions longer. Plus, meeting Bosnia and Herzegovina’s compensation laws and benefits requirements will help you stay compliant and avoid fines and delays.
Bosnia and Herzegovina compensation laws
Bosnia and Herzegovina last changed its minimum wage to BAM 650 per month on June 1, 2022. Employees need to be paid at least that amount per Bosnia and Herzegovina compensation laws. Employees typically work 40 hours a week at 8 hours a day in the country. That said, employees can work up to 10 hours a week of overtime in the Republika Srpska (RS) and 8 hours a week in the Federation of Bosnia and Herzegovina (FBiH) in the case of an increased work volume, earthquake, fire, flood, or similar situation. Overtime rates are usually determined by a Collective Bargaining Agreement (CBA) for each industry.
Guaranteed benefits in Bosnia and Herzegovina
It’s a good idea to start your Bosnia benefits management plan with guaranteed benefits required by law. Some of these benefits can vary by location, so you should make sure you’re following either FBiH or RS regulations depending on where you are conducting business. Bosnia and Herzegovina celebrates 4 national holidays, and employees are granted those days off. Regions celebrate their own additional holidays as well. Employees in FBiH get no more than 30 days of paid annual leave, while employees in RS get 20 days.
Maternity and paternity leave are other important benefits that vary by region. Expecting employees in FBiH must take 42 days of leave, while employees in RS must take at least 60. Employees in RS are entitled to another 6 months of leave if the employee has twins or for every child from the third onward. There is no statutory paternity leave policy in either region.
Bosnia and Herzegovina benefits management
When you’re ready to build your Bosnia and Herzegovina benefits management plan, you should consider adding supplemental benefits that employees may expect. For example, you can provide performance-based bonuses, additional healthcare, a life insurance policy, and more. It’s a great idea to ask employees what they’re looking for and provide the benefits that would mean the most.
Restrictions for benefits and compensation
Before providing compensation and benefits, you must first establish a subsidiary in either FBiH or RS. Luckily, there is an alternative. When you work with an Employer of Record (EOR) like G-P, you can start hiring in minutes, without setting up new entities.
Bosnia and Herzegovina competitive benefits planning
If your company is growing in Bosnia and Herzegovina, designing competitive employee benefits plans should be your top priority. Your program plays a key role in employee recruitment and hiring, so you’ll want to start planning early in your growth process.
Bosnia and Herzegovina employee benefits plans
As you begin building your benefits program, consider all compliance requirements and employee needs. You’ll want to address legal regulations and provide offerings that support employees professionally and personally.
When you provide employees with competitive benefits, you empower them to put their best work forward. The right offerings can also increase retention rates and strengthen your hiring strategy.
You can provide supplemental provisions, such as:
- Travel and housing assistance
- Emotional and physical health resources
- Childcare assistance
- Advanced professional learning courses
Mandatory employee benefits in Bosnia and Herzegovina
To stay compliant, you’ll need to include these required provisions in your plan:
- Unemployment insurance
- Pension
- Legislative leave
- Paid time off
- Eye exams
- Personal accident insurance
How to design your employee benefits program
Each country has specific regulations for benefits programs, but you can use the same fundamental strategy for successful planning anywhere.
1. Evaluate your objectives and finances.
Assess key company goals for your benefits program — determine what size team you want to support and what your hiring and retention goals are. You’ll also want to evaluate your budget and establish how much money you can put toward these goals.
2. Research the labor market.
Understanding the local labor market is vital to a successful growth strategy. Research what comparable companies in the region have to offer and see if you can match their benefits. Common provisions will inform job seekers’ expectations.
To learn more about what employees are looking for, interview local workers about their top benefits preferences. Pay attention to underserved offerings you could provide.
3. Set your program offerings.
With the information you’ve gathered, begin designing a program that meets employee needs and the current market standards. Start by building in mandatory benefits, then add competitive supplemental provisions according to your budget.
Average cost of benefits per employee
Many unique conditions, from operational scale to region to company goals, can affect your final benefits program costs. It’s best to create a sustainable budget for your company rather than relying on a national average for your planning.
You might set a percentage of revenue to support your program each year. With this approach, you can easily scale your benefits budget with your company’s growth over time.
How to calculate employee benefits
Keep in mind that Bosnia and Herzegovina operates under 2 entities — the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS). You’ll need to follow mandatory benefits rates based on your company’s jurisdiction.
You can calculate supplemental provisions based on competitive rates in your local market.
How are employee benefits taxed in Bosnia and Herzegovina?
Most mandatory and fringe benefits are considered taxable, but tax laws may differ slightly between FBiH and RS codes. You’ll want to contact local tax authorities to confirm taxation eligibility for benefits in kind.
Employee health benefits plans
Health insurance enrollment is mandatory in the country, and each employee must provide proof of registration within 15 days of starting employment. You may opt to provide private medical coverage for employees to supplement the national healthcare system, but it’s not a requirement.
Partner with G-P to build your everywhere workforce.
As your partner in global expansion, G-P will handle payroll and compliance, so you can focus on growing your team and scaling your business. Our market-leading global employment platform is powered by the first fully customizable suite of global employment products and backed by the industry’s largest team of in-country HR and legal experts to streamline payroll management and help you offer competitive, compliant local benefits.
Learn more about our platform and request a proposal today.