FBiH govt extends voluntary tax-free assistance for workers through June 2026

Under the new Regulation, proposed by Deputy Prime Minister and Minister of Finance Toni Kraljevic, employers may continue to pay a tax-free allowance of up to 300 Bosnian marks (approximately €153) per month from January to June 2026.

This measure, developed through ongoing dialogue between the government, trade unions, and employer representatives, aims to bolster the living standards of workers by providing a mechanism for increased net income.

Key provisions and compliance

The Regulation includes strict safeguards to ensure the benefit directly reaches the workforce:

• Salary protection: Employers are prohibited from using this assistance to reduce an employee's existing salary levels established as of November 2025.
• Payment schedule: Monthly assistance must be paid during the calendar month following the period to which the aid relates.
• Transparency: Employers must submit a detailed report to the competent Tax Office by the 7th day of the month following the payment. The Tax Administration will verify that all statutory conditions have been met.

Commitment to labor reform

Deputy Prime Minister Kraljevic emphasized that this initiative, coupled with recent amendments to the FBiH Law on Contributions which reduced overall contribution rates for the first time in nearly twenty years, reflects a strategic commitment to labour reform. These measures are designed to foster a more favourable business environment and stimulate job creation across the FBiH.