In addition to taxes, a significant portion of money from your gross budget amount is set aside for so-called Contributions. Contributions are mandatory payments for strictly public social purposes – primarily intended to cover the costs of your hospital treatment (health) and the payment of your earnings after the end of your working life (pension).
A total of 17% (in FBiH) or 18.5% (in RS) is set aside from the Gross salary.
The pension contribution is a mandatory expense that the employer deducts from your gross salary and forwards to the PIO/MIO fund. This money is used to pay pensions to current retirees (intergenerational solidarity system).
Part of the 31% of total contributions that come from the gross salary. The employer additionally pays 6% on the gross salary.
Part of the fixed 31% of contributions that are set aside from the gross salary. In RS, the employer has no additional contributions "on" salary.
In FBiH, 12.5% is set aside from the salary, while in RS it is 10.2%.
The health insurance contribution in the Federation of BiH directly reduces your net salary (12.5% from gross salary), while the employer additionally pays 4% on your gross salary.
Health insurance is based on the principle of absolute solidarity. Regardless of whether a director has a gross salary of 5,000 KM (and the employer pays a large amount monthly to Zavod zdravstvenog osiguranja) or a cashier with a minimum wage (who pays the minimum legal amount), both have exactly the same right and treatment during surgery or service in a state hospital. The young and healthy thus co-finance the elderly and sick today, but in old age, someone will pay for them.