Understanding Employment Norms in Croatia: A Comprehensive Guide
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Hiring in Croatia? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Croatia.

Employment Norms in Croatia

Croatia, situated in Southeast Europe, has undergone a significant economic and social transformation since achieving independence in 1991. The employment norms in Croatia have evolved in parallel, responding to shifts in labour legislation and economic conditions that have impacted the job market.

General Information:

  • The official currency of Croatia is the Kuna (HRK).
  • Zagreb is the capital of Croatia.
  • The official languages of Croatia are Croatian and Italian. Legal documentation can be drafted in either of these languages for it to be considered legally valid.
  • As of 2021, the GDP of Croatia was reported to be USD 53.31 billion.
Croatia's labour laws cover minimum wage, working hours, holidays, discrimination, and termination procedures.
Croatia map

Table of Contents

  • Agreements
  • Onboarding Process
  • Visa
  • Minimum Wage
  • Payroll Cycle
  • Annual Bonus
  • Health Benefits
  • Working Hours and Overtime
  • Leaves
  • Social Security
  • Taxes for Employers
  • Taxes for Employees
  • Probation
  • Termination
  • Severance Pay
  • Employees or Contractors
  • Final Words


  • Collective agreements: Collective agreements in Croatia are contracts negotiated between employers or employer associations and trade unions to establish the terms and conditions of employment, including wages, working hours, and other benefits.
  • Employment contracts: Employment contracts must be in Croatian and signed by both the employer and the employee. Employers must also provide employees with a copy of the agreement.
  • Trade unions: Trade unions may exist for certain trades in Croatia, which can only be formed with the participation of 40% of the employees. In such cases, the trade union may negotiate the terms of the contracts.
  • It is required that the employee works solely for the employer and maintains confidentiality regarding all trade secrets during and after their employment.
Onboarding Process

Onboarding Process

  • Mandatory documents: Employers in Croatia are required to collect and submit certain documents from new employees during the onboarding process. These documents include the following:
    • employee's identification card
    • proof of citizenship or work permi
    • proof of health insurance
  • Orientation and training: It is common for employers in Croatia to provide direction and training to new employees, which can include:
    • an introduction to the company's policies and procedures
    • safety and health training
    • job-specific training
  • Best practices for employee onboarding include providing a warm welcome to new employees, offering clear communication and feedback, and creating a structured training program.


Croatia has several types of work permits and visas that are applicable for different purposes, including:
  • Short-term stay visa: This visa is for individuals who plan to stay in Croatia for less than 90 days and is applicable for purposes such as tourism, business, or visiting family.
  • Temporary stay visa: This visa is for individuals who plan to stay in Croatia for more than 90 days and is applicable for purposes such as study, work, or family reunification.
  • Work permit: Non-EU citizens require a work permit to work legally in Croatia.

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Minimum Wage

Minimum Wage

The minimum wage in Croatia is HRK 5274.15.
Payroll Cycle

Payroll Cycle

The payroll cycle in Croatia is typically monthly, with the salary paid out at the end of the month.
Annual Bonus

Annual Bonus

There is no legal requirement for employers in Croatia to provide employees with an annual bonus. However, it is a common practice in some industries and companies to offer bonuses as part of their employee compensation and benefits package.
Health Benefits

Health Benefits

In Croatia, employers are required to provide mandatory health insurance to their employees. In addition, some employers may offer additional health benefits as part of their employee compensation and benefits package. These may include:
  • Supplementary health insurance can provide additional coverage for medical services not covered by mandatory health insurance.
  • Paid sick leave and paid time off for medical appointments.
  • Access to company-sponsored health and wellness programs like gym memberships or wellness classes.
  • Mental health support, including counseling or therapy services.
Working Hours and Overtime

Working Hours and Overtime

  • Work hours: the standard workweek is 40 hours, typically with an eight-hour workday
  • Break: Employees are entitled to a break of at least 30 minutes after six hours of continuous work.
  • Overtime: Employees who work beyond the maximum daily or weekly hours are entitled to overtime compensation. However, the amount of compensation is not specified by law and should be determined through employment or collective agreement.


Sick Leave

  • The employee is entitled to full pay for up to 42 days per year, except for the first three days of sick leave when the employer is not obliged to pay the employee.
  • If the employee is sick for more than 42 days, they are entitled to a reduced payment amount for up to six months.
  • The employer has the right to request a medical examination by a doctor of their choice.

Parental leaves

  • Parents can take leave 45 days before their expected delivery date and any time until their child is one year old.
  • The employed adoptive parents shall be entitled to a period of adoption leave for six months for a child up to the age of 18

Annual leaves

  • Employees with at least six months of service are entitled to 18 days of annual leave.
  • Employees engaged in hazardous work (construction, mining, etc.) have the right to take a paid annual leave of at least 30 working days per year.
  • A minor employee is entitled to 24 days of annual leave

Public Holidays (for the Calendar year 2023)

  • 1st January - New Year's Day
  • 6th January - Epiphany
  • 4th April - Easter Sunday
  • 5th April - Easter Monday
  • 1st May - Labour Day
  • 30th May - Statehood Day
  • 3rd June - Corpus Christi
  • 22nd June - Day of Antifascist Struggle
  • 5th August - Homeland Thanksgiving Day
  • 15th August - Assumption of Mary
  • 1st November - All Saints' Day
  • 18th November - Remembrance Day
  • 25th December - Christmas Day
  • 26th December - St. Stephen's Day

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Social Security

Social Security

Social security in Croatia is primarily governed by the Croatian Institute for Pension Insurance, the Croatian Health Insurance Fund, and the Croatian Employment Service. The Social Security Rate in Croatia stands at 36.50 per cent with employers contributing 16.5% and employees contributing 20%.
Taxes for Employers

Taxes for Employers

  • Corporate income tax (CIT): For taxpayers with revenues lower than HRK 7.5 million in the tax period, it is paid at a rate of 10%. Otherwise, it is generally 18%.
  • Value Added Tax (VAT) - A standard rate of 25% VAT is applicable.
  • Health insurance: Employers must also pay a health insurance contribution, currently set at 16.5% of an employee's gross salary as Social security contribution.
  • Unemployment insurance: Employers are required to contribute to the unemployment insurance fund at a rate of 1.7% of an employee's gross salary.
  • Work injury insurance: Employers must contribute 0.5% to 5% of an employee's gross salary, depending on the level of risk associated with the employee's job.

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Taxes for Employees

Taxes for Employees

  • Income Tax: Income tax is calculated based on the income earned in a given year.
    • The threshold for income tax is 360,000 HRK per year (up to 30,000 per month).
    • Income earned above this threshold is taxed at a rate of 20%, while income earned below this threshold is taxed at 30%.
  • Capital Gains Tax: Capital gains are taxed at a rate of 10%. Capital losses can only be deducted from capital gains realized in the same tax year.
  • Personal Allowances: Employees are entitled to a monthly allowance, which by 1,750 HRK for one child, 2,500 HRK for two children, and 3,500 HRK for three children.
  • Municipal Tax: Certain cities and municipalities in Croatia may levy a municipal tax of up to 18%.
  • Generation Solidarity: 15% of the employee's salary. This is a part of the social security contribution
  • Individual Capital: 5% of the employee's salary. This is a part of the social security contribution


As per the Labor Act of 2014 in Croatia, the probation period is of 6 months maximum.

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In Croatia, an employer can terminate an employment contract with an employee under the following:
  • By mutual agreement
  • Due to the expiry of a fixed-term contract
  • Due to employee resignation
  • Due to employee misconduct or violation of work obligations
  • Due to employee incapacity to perform work tasks
  • Due to redundancy or organizational changes.
Severance Pay

Severance Pay

Severance pay applies to employees who are laid off due to business reasons. The amount of severance pay depends on the employee's years of service. It ranges from a minimum of 1/3 of their average monthly salary for each full year of service up to 12 years to a maximum of 12 average monthly salaries for 40 or more years.
Employees or Contractors

Employees or Contractors

  • The Labor Act defines an employee as an individual who works under an employment contract with an employer. A contractor is defined as a legal or natural person who is engaged by another person or entity to provide services or perform work for remuneration.
  • Misclassifying an employee as a contractor can result in penalties for the employer, including payment of unpaid taxes, social security contributions, and other benefits.
  • On the other hand, misclassifying a contractor as an employee can lead to claims for unpaid wages, taxes, benefits, and penalties for the employer.
Final Words

Final Words

Croatia has a relatively high unemployment rate, with opportunities in certain sectors such as tourism, manufacturing, and services. The Croatian labor market is regulated by laws that protect workers' rights and ensure fair working conditions. It is a promising destination for job seekers, with a growing economy and a supportive government that is actively promoting employment and economic growth.

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