Decrease of the Average Salary in Bosnia and Herzegovina

In February 2021, the average monthly gross earning per person in employment in legal entities in Bosnia and Herzegovina amounted to 1 490 BAM, which represented the nominal decrease of 2,4% as compared to December 2020. 

In comparison to February 2020 the average monthly gross earnings for the February 2021 was nominally by 2,6% higher. 

In February 2021, the average monthly paid off net earning per person in employment in legal entities in BiH amounted to 961 BAM, which represented the nominal decrease of 2,7% as compared to December 2020, according to the BiH Agency for Statistics. 

In comparison to February 2020 the average monthly paid off net earnings for the February 2021 was nominally by 2,2% higher. 

Having in mind the fact that in the last days in the media, but also in the public, there is speculation about the data related to the lowest salary published on EUROSTAT, in order to accurately inform the entire public, the Federation of Independent Trade Unions of Bosnia and Herzegovina wrote on their page that BiH does not have a legally defined minimum wage, which the Union has been warning about since 2018. 

”There is no “lowest guaranteed salary” of 406 BAM in the Federation. There is the lowest hourly wage of 2.31 BAM net with income tax, which for 176 hours per month gives the amount of “minimum” of 406.56 BAM net with income tax. The legal minimum hourly wage in the FBiH, when converted to the level of the minimum wage, means that this is the amount that the worker receives on hand. There is no guarantee that a worker in the economic sector will also receive a hot meal,because it can be used through an insured meal, so that a hot meal cannot be counted in the “minimum income”. If the worker has no dependent family members, he has a personal deduction of 300 BAM and the state takes 10 percent of the tax from the amount above 300 BAM, in this case 10.65 BAM. So, he has some 396 KM left,” it was announced from the Alliance. 

The lowest salary, which Prime Minister Novalic said in 2015 was a “socially dangerous increase” in the minimum wage, according to the union, does not formally exist, because it was part of the General Collective Agreement which the FBiH Employers’ Association canceled in February 2018. 

”When it comes to the payment of hot meals and transportation fees, it is important to emphasize that these are not legal categories. Namely, if there is no collective agreement (domestic, branch), and thanks to the new Labor Law there are very few of them, the employer does not have to pay this compensation, which a large number do not. The logical question is, “Then why are these fees paid, where they are paid?” The answer is simple. They are paid exclusively because they are currently non-taxable, a hot meal up to 1 percent of the average net salary in FBiH per day, and transportation in the amount of the monthly ticket price, which is regulated by the Ordinance on the application of the Income Tax Act. In this way, the employer pays the employee part of the income without paying mandatory taxes and contributions, which is cheaper. However, if the laws mentioned as a salvation for workers are adopted, all benefits will become taxable, including hot meals and transportation fees, ie they will be equal to the salary in the tax sense,” the union states. 

Poor socio-economic status of workers Instructed by previous experiences, the Union is sure that a large number of employers will simply stop paying them. 

”One of the reasons for the mass emigration in recent years is the poor socio-economic status of workers. In order to improve the status, it is necessary to reduce the tax burden on salaries, which would increase the minimum wage, which should be defined, and abolish the taxation of wages to the amount of 1,000 BAM, which is the lower limit for leading a normal life. The calculation of salaries in contracts should be defined in the gross amount, because in that way any reduction of contributions will be directly directed towards the salary of workers,” they conclude from the Trade Union.

The trade union consumer basket calculated by the Federation of Independent Trade Unions of Bosnia and Herzegovina for December 2020 amounts to 1,863.47 BAM and is 55.06 BAM cheaper than the consumer basket for the previous month, Avaz reports. 

The average salary paid in the Federation of BiH for October 2020 was 961 BAM (last data published by the Federal Bureau of Statistics) and is the same amount as it was for the previous month. 

The coverage of the Trade Union Consumer Basket with an average salary is 51.57 percent. 

The consumer basket itself consists of the following categories: food 44.5 percent, housing and communal services 16.7 percent, hygiene and health maintenance 9.4 percent, education and culture 5.9 percent, clothing and footwear 10.7 percent, transportation 7, 4 percent and household maintenance 5.4 percent. 

In the food category, prices from three shopping centers were used for 85 items. 

When it comes to hygiene and maintaining health, the costs are included for 12 items, and for housing and communal services the costs for six items.

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