Employer of Record in Bosnia and Herzegovina: A Comprehensive Guide for 2026

Introduction

An Employer of Record in Bosnia and Herzegovina acts as the legal employer for your staff, holding the employment relationship, running local payroll, and managing statutory contributions and filings. This lets you hire without registering a local entity, which otherwise means court registration, capital deposit, and tax enrollment before your first employee can start.

The challenge specific to Bosnia and Herzegovina is that it is not one employment jurisdiction. The Federation of Bosnia and Herzegovina and Republika Srpska run separate labor laws, separate contribution systems, and separate tax authorities.

Working hours, notice periods, severance basis, and contribution rates all shift depending on where your employee sits, and the wrong framework applied to a hire creates exposure from the first payroll cycle. It is an easy mistake to make when two systems operate inside one country under one currency.

This guide covers what you need to hire compliantly across both regions: employment standards and statutory entitlements, probation and termination rules, work permits and visas, payroll and contribution rates, and what setting up an entity actually involves.

Bosnia and Herzegovina at a glance

Population: 3.11 million

Currency: Bosnia and Herzegovina convertible mark (BAM)

Capital: Sarajevo

Number of officially recognized languages spoken: 3

Languages frequently used: Bosnian, Serbian, and Croatian

GDP: USD 36.77 billion

What you must know before employing in Bosnia and Herzegovina

Employment in Bosnia and Herzegovina runs on two separate labor frameworks, one for the Federation of Bosnia and Herzegovina and one for Republika Srpska, each with its own contract requirements, working hour rules, and termination procedures. The employee's place of work determines which framework applies.  

The table below summarizes employment standards that every employer in Bosnia and Herzegovina has to meet.

Contractors vs. full-time employees

The classification decision carries real weight in Bosnia and Herzegovina, where contractors carry their own tax and protection obligations while full-time employees are entitled to health insurance, pension, severance, and leave compensation.

Skuad supports both hiring models from a single platform.

EOR for full-time employees

• Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
• Supports employment contract generation aligned with local labor laws across supported markets
• Facilitates statutory contribution workflows covering applicable social insurance and pension obligations
• Supports payroll processing in 70+ currencies with automated tax withholding and year-end reconciliation
• Helps administer statutory benefits, paid leave, and parental entitlements in line with local requirements
• Assists with termination and offboarding, including notice periods and severance calculations as required locally

Contractor management

• Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
• Supports invoice generation, approval workflows, and payment processing
• Helps flag classification risk before it becomes a compliance issue with built-in worker classification checks
• Facilitates multi-currency payouts across 70+ currencies with no manual reconciliation
• Helps manage contractor records, contracts, and payment history from a single dashboard alongside full-time employees

Whether you are hiring full-time employees or contractors, Skuad supports both. See pricing.

How to hire in Bosnia and Herzegovina?

To hire employees in Bosnia and Herzegovina, a common means is by utilizing popular job search portals. These portals outline different job openings and opportunities for members to search for the availability of their preferred job roles via the job descriptions provided.

Popular job search portals in Bosnia and Herzegovina include Posao.ba, MojPosao, and specialized platforms like Džobs for IT roles.

To hire employees in Bosnia and Herzegovina, the process begins by creating job descriptions and shortlisting candidates with the required qualifications. Usually, the HR department of the organization handles the entire process.

Sourcing through local job portals gets you candidates, but it does not verify them. Moreover, educational and professional credentials are a persistent risk in any cross-border hire where your team cannot check references in-country.

Skuad supports background checks as part of the hiring workflow, covering identity verification, employment history, criminal records, and education credentials, so you know who you are onboarding before contracts are signed.

Combined with Skuad's local EOR infrastructure, the process from candidate verification to compliant onboarding runs through one platform.

Book a demo to see how Skuad supports hiring across 160+ countries.

What is the probation period in Bosnia and Herzegovina?

Probation rules differ depending on where in Bosnia and Herzegovina (BiH) the employee works. The country is made up of two self-governing regions, the Federation of Bosnia and Herzegovina and Republika Srpska, and each has its own labor law.

How long is the notice period in Bosnia and Herzegovina?

Notice periods in Bosnia and Herzegovina are set by which party terminates the contract, not by length of service.

Grounds for termination

Both regions permit termination for business reasons, performance reasons, and misconduct. Republika Srpska sets out the grounds in more detail across three tiers: ordinary grounds, serious breach of work obligations, and breach of work discipline.

It also allows intermediate sanctions short of dismissal, including a written warning with notice of dismissal and a fine of up to 20 percent of basic salary for up to three months. The Federation has no equivalent fine mechanism.

Termination must be in writing with stated reasons in both regions.

Procedure before dismissal

Severance Pay

Severance is mandatory when an employer terminates an indefinite contract after at least two years of continuous service with that employer.

Termination in Bosnia and Herzegovina is tightly regulated. The biggest exposure is usually a court order rather than a direct government fine. If a dismissal is unlawful, the employer can face reinstatement, back pay, and compensation, and in Republika Srpska the court can also cap compensation at up to 12 salaries depending on the circumstances.

Skuad's Shield compliance platform helps with termination compliance, which includes notice period calculations, severance computation, and offboarding documentation aligned with local labor requirements.

Incorporation: how to set up a subsidiary in Bosnia and Herzegovina

The most crucial step in setting up a subsidiary in Bosnia and Herzegovina is deciding which regions you want to establish your entity in, as different laws apply to the two central regions in Bosnia and Herzegovina - The Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS).

The subsidiary laws then guide the procedures and steps to establish an entity in Bosnia and Herzegovina. However, there are common steps to take for both regions when setting up a subsidiary in Bosnia and Herzegovina.

1. Contract establishment according to the regions’ laws.
2. Basic capital payment at the bank.
3. Company registration at a competent court of law.
4. Opening a bank account.
5. Company and employee registration at the tax authorities.
6. Service permission.

Setting up a subsidiary in Bosnia and Herzegovina is undoubtedly challenging, costly, and tedious. That's where an EOR solution like Skuad helps you to hire compliantly without setting up a local entity.

EOR solution in Bosnia and Herzegovina

Entity setup in Bosnia and Herzegovina means choosing between the Federation and Republika Srpska frameworks, paying in basic capital, registering with a competent court, and completing tax registration for the company and every employee. The full sequence can run for months before your first hire starts work.

Skuad helps remove that dependency. Skuad acts as the legal employer in Bosnia and Herzegovina, so your company can hire, onboard, and pay employees without entity setup or local legal counsel.

Here is what Skuad helps with:

• Employment contract generation across 160+ countries, aligned with local labor laws and statutory requirements
• Statutory contribution workflows across supported markets, covering applicable social insurance and pension obligations
• Payroll processing in 70+ currencies with accurate tax withholding and statutory deductions
• Termination and offboarding support aligned with local labor requirements across supported markets
• Work permit and visa support for foreign nationals joining your team
• Background verification covering identity, employment history, and criminal records before onboarding

Book a demo to see how Skuad gets your first Bosnia and Herzegovina hire onboarded in weeks, not months

Customer Story: how PureRED onboarded 65 employees across six Countries with Skuad

PureRED is an integrated marketing and advertising agency working with large retail and consumer brands. The company needed to onboard employees across the UK, Spain, Croatia, Greece, Colombia, and India, each with separate labor laws and payroll rules. Skuad supported localized employment contracts, multi-currency payroll, and ongoing compliance across all six markets from a single platform. PureRED now runs a distributed team of 65 employees without local entities in those countries.

"Skuad made our team expansion possible, handling the complex onboarding and payroll processes across six different countries with ease. Their local expertise ensured our compliance, letting us focus on what we do best - serving our clients." - Brian Butcher, EVP Corporate Development, PureRED

Read the full case study

What are the types of visas in Bosnia and Herzegovina?

Bosnia and Herzegovina issues visas by category, not by purpose. The Law on Movement and Stay of Aliens and Asylum and the Decision on Visas establish three categories. The purpose of travel is stated within the application rather than determining a separate visa product.

How to get a work permit in Bosnia and Herzegovina?

Work permits are issued at the regional level, not nationally. The Federation of Bosnia and Herzegovina and Republika Srpska each apply their own law through their own employment authority.

Visas and residence permits, by contrast, are handled nationally, so a foreign hire needs one visa from a national process and one work permit from whichever region the employer is registered in.

The Bosnia and Herzegovina work process is split between a national visa and a regional work permit step, so employers must coordinate both before a foreign hire can start work

For employers hiring foreign nationals, the real challenge is managing two separate layers of compliance: the visa and residence process at the national level, and the work permit process at the Federation or Republika Srpska level. That makes onboarding more document-heavy.

Skuad helps you with work permit workflows through its Global Immigration platform. It includes:

• Supporting work permit applications for foreign employees joining your team
• Helping coordinate visa documentation with relevant local immigration authorities
• Assisting with residence and work permit conversions as required by local immigration law
• Helping track documentation requirements and deadlines across the full permit lifecycle
• Helping keep your team aligned with compliance requirements as permit renewals and regulatory updates change

Book a demo to see how Skuad supports work permit documentation for your foreign hires in Bosnia and Herzegovina.

How to manage payroll & taxes in Bosnia and Herzegovina?

Payroll in Bosnia and Herzegovina is governed at the entity level. Employers must apply the Federation of Bosnia and Herzegovina framework or the Republika Srpska framework depending on where the employee works, and each has its own contribution rates, income tax rules, and collecting authority.

The table below summarizes the contribution rates in the Federation of BiH and Republika Srpska.

The Federation of BiH splits its 36 percent between the employee (31 percent) and the employer (5 percent). Republika Srpska applies the full 32.80 percent to a single gross base with no employer split. Either way, the whole amount sits inside your cost of employment.

Additional contributions

The Federation of BiH applies an extra pension contribution where a role qualifies for service counted at an accelerated rate:

The full cost of employment in Bosnia and Herzegovina includes gross salary, social security contributions under either the Federation of Bosnia and Herzegovina or Republika Srpska framework, and any payroll obligations tied to the employee’s place of work.

Before you commit to a hire, use Skuad’s employee cost calculator that helps you estimate this upfront, so budgeting a Bosnia and Herzegovina hire starts from a real number.

Simplifying hiring in Bosnia and Herzegovina with Skuad EOR

Hiring in Bosnia and Herzegovina becomes manageable when you understand the key compliance requirements. The dual-entity labor framework means employers must apply either the Federation of Bosnia and Herzegovina Labor Law or the Republika Srpska Labor Law, each with distinct rules for working hours, notice periods, and severance calculations.

Statutory payroll obligations, including entity-specific social security contributions and income tax filings, must be remitted to the relevant Tax Administration on the day salary is paid. Work permits for foreign nationals follow a defined sequence: employer-led permit application, Visa D, then temporary residence approval before any employment contract can be signed.

For most foreign companies, the real challenge is managing these parallel obligations without local infrastructure.

An employer of record in Bosnia and Herzegovina removes that dependency. Rather than building a Bosnia and Herzegovina entity from scratch, companies can hire, onboard, and pay Bosnia and Herzegovina employees through an EOR that already holds the local registrations.

Skuad supports the operational complexity of hiring in Bosnia and Herzegovina, including employment contracts, social security board registration, payroll in 70+ currencies, statutory leave, work permits, and ongoing compliance, so your team can focus on the work and leave the paperwork to the platform.

Book a demo to see how Skuad onboards your first Bosnia and Herzegovina hire in weeks.

FAQ

1. What is an employer of record in Bosnia and Herzegovina?

An employer of record acts as the legal employer for your workers in Bosnia and Herzegovina, holding the employment relationship under either the Federation labor law or the Republika Srpska framework. The EOR typically handles contracts, payroll, tax withholding, and statutory social security registration on your behalf.

2. How much does an employer of record in Bosnia and Herzegovina cost?

Pricing generally runs from around USD 300 to USD 600 per employee per month, though this usually depends on the entity coverage required and headcount. Total employment cost also includes gross salary in Bosnia and Herzegovina plus employer social contributions, which differ between the Federation and Republika Srpska.

3. Can a foreign company hire in Bosnia and Herzegovina without a local entity?

Foreign companies can typically hire in Bosnia and Herzegovina through an EOR without registering locally, as the EOR holds the legal employment relationship. Direct hiring generally requires a registered entity in either the Federation or Republika Srpska, along with court registration and tax administration enrollment.

4. What are the compliance risks of misclassifying workers in Bosnia and Herzegovina?

Misclassification generally exposes employers to back payment of social contributions, unpaid income tax, and penalties from the relevant tax administration. Disputes can also result in reinstatement orders and compensation awards. Risk usually rises when a contractor works fixed hours under direct supervision.

5. Which region's employment law applies to my hire in Bosnia and Herzegovina?

The employee’s place of work determines the applicable rules. Bosnia and Herzegovina has two separate labour systems, the Federation of BiH and Republika Srpska, each with its own labour law, contribution rates, and tax authority. An employee in Sarajevo follows Federation rules, while one in Banja Luka follows Republika Srpska rules, even for the same employer.

6. How long does it take to onboard an employee through an EOR in Bosnia and Herzegovina?

The timeline varies, but onboarding through an EOR typically runs one to two weeks from contract signature to payroll readiness. Employers must generally register new hires with the relevant Health Insurance Fund within 15 days, which usually sits inside that window.