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Calculator
Gross to NetNet to Gross
What is Gross 1?What is Gross 2?Difference Gross 1 - 2
How is salary calculated?What is included in gross?What items are deducted?Salary calculation exampleMinimum salaryAverage salary
What taxes do I pay?Pension & Health ExplainedTax ratesSurtax – who pays it?Tax reliefs – who is entitled?Personal deduction – what is it?
Common calculation mistakesNegotiating gross salaryGross or net – which is better?How to increase net salary?Regional salary differences
Child tax reliefsReliefs for dependentsDisability reliefsHow to report tax reliefs?
Working from abroadRemote work and taxesWorking for a foreign companyDouble taxation

Personal Deduction – What is it?

The most important mechanism for protecting the existential minimum of workers in all tax systems is the institute called "basic personal deduction". In short: it is a fixed amount of your salary that is never, under any circumstances, legally taxed with even a single fening of income tax!

The Shield of Your Earnings (Tax-free amount registered every month)

The legislator defines that every person has a Minimum existential mandatory living cost (need to buy bread, electricity bills) that must exist for their bare survival within the working municipality. Therefore, it is only fair that the state DOES NOT TAKE AND EXPROPRIATE from you such a strictly basic monthly prescribed amount through taxes.

Deduction Levels in Bosnia and Herzegovina

In 2026, the amount depends on the entity: in the Federation of BiH it is 300 KM, while in the Republika Srpska it is 1,000 KM per month.

How Deduction Works in the Calculation Formula?

Step I:
From the Income you earned, the prescribed Deduction amount is subtracted ("it is set aside, hidden from the view of the Income Tax Administration").
Step II:
Only the remainder is taxed (at the tax rate) – what matches the formula beyond the line of the subtracted "Tax-free" deduction and other dependent additions if you are lucky and have a family!

And what if you earn EXTREMELY LITTLE? What if your taxable income falls through and your Deduction is higher than your salary itself?!

If your total mandatory taxable monthly income is less than or exactly the same as your assigned Deduction amount from the tax card (i.e., you do not earn anywhere near the legally provided tax threshold), INCOME TAX then simply and MUST be 0 KM. Zero. Then the amount (after minimal pension deduction) is paid directly to your account without further reduction for the state! Many people with very low earnings and dependent members actually legally avoid paying this state burden entirely!

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