Professional Employer Organization


Bosnia and Herzegovina

Professional Employer Organization (PEO) in Bosnia and Herzegovina

What Is a Professional Employer Organization (PEO)?

A Professional Employer Organization (PEO) helps employers by leasing employees, sharing employee-related responsibilities, and managing employee-related liabilities. In addition, employers enter a joint employment relationship with PEOs to outsource their human resource functions.

That includes payroll administration, employee benefits, compensation, employment taxes, and workers' compensation. As a result, employers don't have to deal with the employment responsibilities of the specific employees, reporting their wages under the PEO's FEIN (Federal Employment Identification Number.)

As a result, employers benefit from economies of scale with more affordable employee benefits while shifting employee liability to the PEO. Here are a few responsibilities that a PEO can take off of the HR team's hands:

  • Recruiting and hiring
  • Benefits administration
  • Payroll administration
  • Drug testing programs
  • Unemployment administration
  • Compliance assistance
  • Workers' compensation administration
  • Family and Medical Leave Act administration

Close to all HR functions can be outsourced to a PEO, depending on the contract. In addition, companies that don't want to lose control of their employment processes but want to benefit from the outsourcing aspect can opt for an administrative services outsourcing (ASO) agreement.

The main advantage of PEOs is that they help businesses simplify expansion and create international teams. Employers wanting to expand their business in Bosnia and Herzegovina can use PEOs to help expedite the process.

A diverse talent pool characterizes Bosnia and Herzegovina, with 13.8% of the population graduating with engineering, manufacturing, and construction degrees. With a professional employer organization, Bosnia and Herzegovina won't require a legal entity.

Remember not to confuse a PEO with an Employer of Record in Bosnia and Herzegovina. While the PEO takes a co-employment approach, the EOR Bosnia and Herzegovina is the legal employer on paper.

Benefits of Using a PEO in Bosnia and Herzegovina

Businesses that use PEO Bosnia and Herzegovina typically experience benefits such as:

Cost-Effective Expansion

Partnering with a PEO in Bosnia and Herzegovina will help companies benefit from cost savings during their expansion. In addition, they won't need to establish a legal entity in the country.

Employee Onboarding

PEOs in Bosnia and Herzegovina simplify employee onboarding, providing the necessary resources for all labor contracts in the country. That includes fixed-term contracts and open-ended employment contracts.

Employment Law Compliance

PEOs help companies comply with all employment laws in Bosnia and Herzegovina and ensure that all employment contracts adhere to all labor laws and best practices, preventing penalties and fines.

Onsite Legal and HR Team

PEOs in Bosnia and Herzegovina serve as an onsite legal and HR team, providing contract renewals, terminations, annual leave management, HR, and strategic guidance specific to the team.

Payroll Outsourcing

PEOs in Bosnia and Herzegovina take care of all payroll outsourcing responsibilities. That includes social security payments, tax, and other required contributions to the country.

Rapid Market Entry

Working with a PEO helps companies set up a base and start operating in Bosnia and Herzegovina in just a few business days. This way, companies can build their international teams rapidly.

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Hiring in Bosnia and Herzegovina With a PEO

Here's all you need to know about hiring in Bosnia and Herzegovina with a PEO. The PEO will take care of the following factors and more:

Employment Contracts

Bosnia legally requires employers to write employment contracts in Bosnian, Croatian, or Serbian. In these employment contracts, employers must detail the employee's compensation, benefits, and termination requirements. In addition, the salary and compensation should be written in the Bosnia and Herzegovina convertible mark.

Work Hours

The work week in Bosnia and Herzegovina lasts 40 hours, approximately 8 hours per day.


Four national holidays are celebrated in Bosnia and Herzegovina, alongside regional holidays:

  • Independence Day
  • Labor Day
  • Orthodox Christmas Day
  • Ramadan Bajram

Sick Leave

Employees are entitled to 20 days of paid annual leave in Republika Srpska and 30 days in the Federation of Bosnia and Herzegovina. In addition, employees in Bosnia and Herzegovina are entitled to 5 paid sick leaves annually.

Maternity/Paternity Leave

In the Federation of Bosnia and Herzegovina, mothers are entitled to 1 year of maternity leave, but they must take at least 45 days off, after which they will work half-time until their child is two years old.

However, if the father is working half-time, the mother may work full-time. The employee is entitled to compensation under the law.

In Republika Srpska, the mother must take at least 60 days off. Mothers are also entitled to another six months off for twins or every child after her third child. Lastly, they are entitled to compensation for her salary over the past year.

Health Insurance

In the Federation of Bosnia and Herzegovina, the employee contributes 12.5% of their salary to health insurance, while the employer contributes 4%. In Republika Srpska, the employee solely contributes 12% to health insurance.


In the Federation of Bosnia and Herzegovina, the employee is entitled to a termination notice ranging from 14 days to 3 months. In addition, employees working for over two years are entitled to a severance payment equivalent to at least one-third of their monthly salary or, at most, six months of salary.

In Republika Srpska, the employee is entitled to a termination notice of at least 30 days.


In the Federation of Bosnia and Herzegovina, the employer contributes 16%, and the employee contributes 17% of their salary to social security. In addition, the employer contributes 0.5%, and the employee contributes 1.5% of their salary to unemployment insurance.

In Republika Srpska, the employee contributes 18.5% to social security, 1.7% to child protection, and 0.6% to unemployment insurance.

PEO Services Bosnia and Herzegovina

Allowing a PEO to aid you in the expansion process in Bosnia and Herzegovina will help you in the long run. The organization takes a wide range of responsibilities off of the HR and legal team's hands, saving a lot of money and time in the process.

The most commonly voiced concerning hiring a PEO is losing control of your business and its operations, which isn't true at all. PEOs take a co-employment approach and only deal with the employment prospect of your business.

As a result, you're able to make smarter employment decisions and build international teams, benefitting from diverse talent pools. Here are a few services offered by PEOs in Bosnia and Herzegovina:

PEOs Offer

  • Comprehensive HR services for employers
  • Payroll processing, risk management, HR compliance, employment tax, employee benefits, and time and attendance management
  • Reduced liability for state unemployment taxes, payroll taxes, and payment of wages
  • Assistance with employee recruitment
  • Reduction of employee turnover
  • Optimization of business for current and potential employees
  • Saved time on daily business operations

PEOs Do Not Offer

  • Labor supply to your worksites
  • Recruitment and termination decisions
  • Control over your business operations

Why You Should Use a PEO in Bosnia and Herzegovina

Bosnia and Herzegovina is a great country to expand your business, mainly because of its location in Europe. This country allows you to connect your business to major trade hubs such as Germany. Plus, it's extremely rich in resources.

Engineering, manufacturing, and construction graduates make up 13.8% of the population, while unemployed people make up 30%. This means the country has a lot of potential for you to build an international team of talented and educated members.

A PEO can help you do so in a legally compliant manner without having to use a legal entity at all. PEOs in Bosnia and Herzegovina, creating and processing your employment contracts and other legal documents.

In addition, a PEO helps you offer suitable employee benefits and compensation to improve employee experiences at your business. As a result, your business can benefit from less employee turnover in Bosnia and Herzegovina.

Finally, hiring a PEO in Bosnia and Herzegovina is essential to ensure compliance with the country's employment laws and other statutory compliance requirements. In addition, the PEO will ensure that your employees are being compensated lawfully and appropriately for their labor.

As of 2022, the minimum wage in Bosnia and Herzegovina is 406 convertible marks per month. However, this amount may vary in the Federation of Bosnia and Herzegovina. This is where PEOs take the burden of keeping track of the latest changes in minimum wage and worker's compensation.

This way, your HR or legal team no longer has to deal with payroll processing or benefit distribution.

Choose a PEO for Your Expansion Into Bosnia and Herzegovina

Expanding your business to a different country can be extremely challenging, especially if you're not a local resident. In addition, when you don't know the legal terms and employment laws of the country, it can be a tedious and costly process to build an international term.

Hiring international employees from Bosnia and Herzegovina may be a difficult to accomplish, especially when it comes to setting up a benefits system. However, doing it yourself is likely to result in expected delays and maybe even penalties.

Skuad is a PEO that takes this burden off your back by helping you hire and pay your employees in Bosnia and Herzegovina. In addition, the organization handles the responsibilities of onboarding new hires, running global payroll securely, complying with local employment laws, and managing benefits, work permits, timesheets, and more.

Sign up now to stay compliant with employment laws in Bosnia and Herzegovina.

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