Gross and net salary in Bosnia – what goes into the calculation

Federation of BiH: contributions from and on salary

31% in contributions comes out of the employee's gross: pension 17%, health 12.5%, unemployment 1.5%. The remainder (69% of gross), reduced by the 300 KM monthly allowance, is taxed at 10%.

The employer additionally pays contributions on top of gross — 5% total since July 1, 2025 (pension 2.5%, health 2%, unemployment 0.5%), down from the previous 10.5%. It's a significant labor-cost cut that many older guides and calculators still haven't updated.

Republika Srpska: the gross system

In RS all contributions are paid out of gross: pension 18.5%, health 10.2%, child protection 1.7%, unemployment 0.6% — also 31% in total. There are no extra employer contributions, so the employer's cost equals the contracted gross salary.

Income tax on personal income is 8%, with a basic monthly allowance of 1,000 KM. In practice, the part of the base up to 1,000 KM is untaxed.

Example: the same gross in both entities

FBiH: net = 0.69 × gross − 10% × (0.69 × gross − 300) · RS: net = 0.69 × gross − 8% × (0.69 × gross − 1,000)

Gross 2,000 KM in FBiH: contributions 620 KM, base 1,380 − 300 = 1,080 KM, tax 108 KM, net 1,272 KM. The same salary in RS: contributions 620 KM, base 380 KM, tax 30.40 KM, net 1,349.60 KM — about 78 KM more, thanks to the lower tax rate and higher allowance.

On the employer's side, that salary costs 2,100 KM in FBiH (gross + 5%) and exactly 2,000 KM in RS.

What the calculation does NOT include

The standard calculation excludes non-taxable allowances (meal, transport, holiday pay — per entity rules) and FBiH's increased personal allowance for dependent family members (via the tax card). If you receive these, your real net is higher than the basic calculation — but the basis for loans and seniority remains the contracted salary.