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Croatia

Payroll and Benefits Guide

Last updated:
Dec 8, 2022

Table of contents

Overview Contributions Minimum Wage Payroll Working Hours Leave Termination Common Benefits VISA VAT

Overview

Capital
Zagreb
Currency
Kuna (HRK)
Date Format
dd/mm/yyyy
Fiscal Year
1 January- 31 December
Payroll Frequency
Monthly
Employer Taxes
16.50%

Contributions

Employer

Employer Payroll Contributions

16.50% Health Insurance
  * In addition, employers with more than 20 employees have certain obligations with respect to the number of disabled individuals employed. (The number depends on the total number of employees, but it cannot be lower than 3% of the total number of employees). Employers who do not comply with prescribed requirements are obligated to pay a monthly fee amounting to 30% of minimal salary for each disabled individual that employer was obligated to employ.
16.50% Total Employment Cost

Employee

Employee Payroll Contributions

15.00% Generation Solidarity (Pillar I) (Annual maximum of 661,032.00 HRK)
5.00% Individual Capital (Pillar II)
  Monthly cap of 55,086.00 HRK, applicable for both pillar I and II payments
20.00% Total Employee Cost

Employee Income Tax

20.00% Up to 360,000.00 HRK
30.00% 360,000.00 HRK and over
  ** Employees are entitled to a monthly allowance of HRK 4,000 for personal allowance, which increases by HRK 1,750 for one child, HRK 2,500 for two and HRK 3,500 for three children. In addition, certain cities and municipalities in Croatia levy a municipal tax, which can be up to 18% high. It’s levied as surtax to the individual’s personal income tax liability.

Minimum Wage

General

The monthly minimum wage is 4,687.50 HRK.

 

Payroll

Payroll Cycle

Salaries are paid monthly and no later than the 15th of the following month.

13th Salary

There are no provisions in the law regarding 13th salaries.

 

Working Hours

General

The standard workweek is 5 days and consists of a maximum of 40 hours. Employers must be granted written permission from employees to increase their working hours.

Overtime

All work in excess of the standard workweek is to be paid as overtime and is regulated by the employment contract or collective bargaining agreements. The maximum number of overtime hours in a week is 10 or 180 hours annually.

All overtime hours are paid at an overtime compensation rate which is stipulated in the employment contract or collective bargaining agreements.

Working Week

Monday-Friday

 

Leave

Paid Time Off

The paid annual leave entitlement is dependent on the years of employment. The standard paid leave entitlement is between 15 and 20 days.

Public Holidays

There are 14 public holidays.

Sick Days

An employee receives up to 42 days of sick leave per year and is paid by the employer at the rate of 70% of the regular salary. Any sickness exceeding 42 days is paid by the employer and reimbursed by Croatia’s health insurance fund.

Maternity Leave

Pregnant employees are entitled to:

  • 28 days of paid maternity leave before the due date (increasing to 45 days in special circumstances, based on a medical assessment)
  • After the birth of a child, the employee is entitled to 70 days of paid maternity leave.
  • After 70 days, the mother can continue the maternity leave until the child is six months old (unpaid, although employers generally do pay this as an additional benefit) or choose to share the maternity leave with the father.

Paternity Leave

There is no statutory paternity leave in Croatia.

However, in special circumstances, the father can take over the mother’s mandatory (70 days) leave if the mother cannot care for the child.  After the 70th day after birth, the mother can transfer the remainder of the leave to the father.

Parental Leave

Each parent has the right to 120 days per parent, paid parental leave for each child, which the employee must take before the child reaches eight years old.

The leave can be taken fully or in two parts (per year) or part-time, where the duration of parental leave is doubled, but the compensation is halved.

 

Termination

Termination Process

The termination process is standard in Croatia, with notice periods required unless an employer can provide sufficient cause for dismissal without notice (due to misconduct, disobedience, lack of skill, neglect of duties, or absence without permission).

If the reason is misconduct, notice must be in writing, and with documented meetings and discussions prior to a final termination decision.

Notice Period

The notice period for a temporary or permanent employee is dependent on the employee’s length of service:

  • 2 weeks for employees with a year of employment
  • 6 weeks for employees with two years of employment
  • 8 weeks for employees with five years of employment
  • 10 weeks for employees with 10 years of employment
  • 12 weeks for employees with over 20 years of employment

An additional two weeks of notice is required for employees over the age of 50 and an additional four weeks for employees over 55.

Severance Pay

Severance pay is dependent on the length of employment. Severance pay for employees with two or more years of employment is paid at 33% of the employees’ regular monthly pay rate for each year of service, at a maximum of six months of the employees’ salary.

Probation Period

The probation period is dependent on the type of role and is stipulated within the employment agreement. In general, probation periods cannot be longer than one year.

 

Common Benefits

General

Supplementary health and travel insurance plans, voluntary pension insurance contributions, professional training allowance, company phone provided/mobile phone allowance, and company car (mostly for management and executives).

 

VISA

VISA

Croatia’s immigration system provides several options for employers of foreign nationals. Croatia is a member of the European Union. Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by permit type.

  • Business visitors require a Short-Term Visa (Type C Visa) to enter Croatia unless they are visa-exempt based on their nationality or hold a suitable alternate visa. Visas are issued for single, dual, or multiple entries at the discretion of the consular authorities. Business visitors must limit their stay to 90 days in any 180 days.
  • The main work authorization categories are the Work Registration Certificate, a registration process for short-term work permit-exempt activities, and the Stay and Work Permit, suitable for a broad range of work activities. The Stay and Work Permit is issued for up to one year initially and can be renewed.
  • Croatia also offers a one-year Digital Nomad temporary stay permit for foreign nationals seeking to work remotely from Croatia without local company sponsorship.
 

VAT

General

25% standard rate.

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