🇧🇦 Moving to Bosnia and Herzegovina

• On: Worldwide income of residents
• Who: Federation of BiH: income tax is paid at a flat 10%
• Limit: BAM 3,600/yr ≈ $2,060

Income tax in Bosnia and Herzegovina is set by the entities: the Federation taxes income at 10% after a KM 3,600 a year basic deduction, and Republika Srpska taxes employment pay at 8% after a KM 1,000 a month deduction; employee contributions are 31% of gross pay in both entities, deductible from taxable pay in the Federation but not in Republika Srpska. Residents are taxed on worldwide income.

Taxed on

Worldwide income of residents; income earned in the entity for non-residents. Federation: employment pay after compulsory contributions and the personal deduction. Republika Srpska: gross employment pay (contributions are not deducted) after the personal deduction.

Who it applies to

• Federation of BiH: income tax is paid at a flat 10%, and a resident is a person with residence or one who stays 183 or more days, continuously or with breaks, in the tax period.
• Federation of BiH: taxable income is reduced by a basic personal deduction of KM 3,600 a year (KM 300 a month), plus factors of 0.5 for a spouse, 0.5, 0.7 and 0.9 for the first, second and third child, 0.3 for another dependent family member and 0.3 for own or a dependant's disability, applied to that basic amount.
• Federation of BiH: compulsory contributions paid from pay (pension, health and unemployment insurance) are deducted from employment income before tax.
• Federation of BiH: maximum employee contribution rates are 17% pension and disability, 12.5% health and 1.5% unemployment, 31% in total, charged on gross pay.
• Republika Srpska: tax on personal earnings (employment pay) is 8% of the tax base and tax on self-employment income is 10% from 1 January 2022; the base is gross employment pay and the personal deduction is KM 12,000 a year (KM 1,000 a month).
• Republika Srpska: employee contributions are 18.5% pension and disability, 10.2% health, 0.6% unemployment and 1.7% child protection, 31% in total, paid by deduction from the gross base; they are not deducted from the income tax base.
• Republika Srpska: a resident has a permanent home, or stays 183 or more days in 12 months starting or ending in the tax year, or has a permanent home and centre of life interests there.
• Each entity taxes residents on income from other entities and countries, and non-residents only on income earned in the entity.

Exclusions

• Non-residents (fewer than 183 days) are taxed only on income earned in the entity.

Limits

• BAM 3,600 a year (≈ $2,060) · Federation of BiH basic personal deduction (KM 300 a month)
• BAM 1,000 a month (≈ $570) · Republika Srpska personal deduction on employment pay (KM 12,000 a year)

Days in the country

• At least 183 days in tax period (Federation of BiH) · Staying 183 or more days in the Federation, continuously or with breaks, in any tax period makes a person resident.
• At least 183 days in 12 months starting or ending in the tax year (Republika Srpska) · Staying 183 or more days in Republika Srpska in a 12-month period starting or ending in the tax year makes a person resident.

Tax residence

Residence is decided separately by each entity: 183 or more days of presence, or a permanent home or centre of life interests.

Visas

Immigration status does not set tax residence; the day count applies to any permit holder.

Other taxes

Contributions are 31% of gross pay for the employee in both entities; value added tax and corporate profit tax are levied separately by the entity and state authorities. In the Federation, employer contribution rates were lowered from 1 July 2025 (pension from 6.00% to 2.50% and health from 4.00% to 2.00% in the employer-charge category of Art. 10(2)); the 31% employee rates are unchanged.

Checked against official sources on 11 Oct 2026Change log

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