Good to know
As an employer in Croatia, there are also various tax-free allowances available to be paid entirely at the employer’s discretion. Employers should know what these are and how much is typically paid out for each.
Are you ready to hire in Croatia?
Croatia is a forward-looking economy, competitive labour costs, and a favourble business environment are among the factors that make Croatia a compelling choice for global companies considering future expansion. The country also boasts a wealth of available talent and is highly appealing for international recruitment.
Annually, numerous students graduate from Croatia’s numerous universities and colleges, armed with degrees and eager to embark on their careers with international employers.
It’s a legal obligation in Croatia to include details of any sick or vacation leave on a payslip. It’s important for employers to know that all time off must be recorded and approved.
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The current minimum wage in Croatia is 700 EUR per month.
Standard Working Hours
The standard workweek is 5 days and consists of a maximum of 40 hours. The standard working week is Monday – Friday.
Any work exceeding the regular workweek is classified as overtime and is governed by either the employment contract or collective bargaining agreement. The highest permissible count of weekly overtime hours is 10, totaling 180 hours per year. With the potential to be expanded by Collective Agreements, overtime hours can reach a maximum of 250 hours annually. These additional hours are subject to remuneration at an overtime compensation rate predetermined within the employment contract or collective bargaining agreements.
In Croatia, salaries are paid in a monthly cycle. This is usually paid no later than the 15th of the following month. There are currently no provisions in the law regarding 13th salaries.
Paid time off
Employees are entitled to a minimum of 4weeks (20 working days) of paid vacation each year following completion of 6 months of employment.
Employees must be registered for mandatory health insurance with the Croatian Health Insurance Fund (HZZO). This entitles them to sick pay or income replacement benefit, and sick leave as needed.
Employers will pay sick pay for the first 42 days of sick leave, or seven days for an employee with a disability. Sick payment can’t be less than 70% of an employee’s average wage in the six months before the sick leave. After this period, the employer reclaims the sick leave they pay from the HZZO and the amount must be within 831.50 HRZ and 4,257.28. After 18 months, the amount may be reduced to half.
Females 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 entails 10 working days of compensated absence per child, granted to fathers or equivalent second parents, irrespective of their marital or familial situation. In cases of twins or multiples, this leave extends to 15 working days for the working parent.
Termination of Employment
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.
The notice period for a temporary or permanent employee is dependent on the employee’s length of service.
The duration of the probation period is determined based on the specific role and is outlined in the employment agreement. Typically, probation periods cannot exceed six months.
However, if the employee is absent during the initially agreed-upon probation period, such as due to sick leave or maternity leave, the probation period may be extended beyond the original timeframe.
Croatia’s immigration system offers various options for employers hiring foreign nationals, as the country is an EU member. The specific requirements, processing times, employment eligibility, and benefits for accompanying family members differ depending on the type of permit.
For business visitors, a Short-Term Visa (Type C Visa) is necessary to enter Croatia unless they are visa-exempt based on their nationality or possess a suitable alternative visa. The consular authorities determine whether visas are issued for single, dual, or multiple entries. Business visitors are allowed to stay for a maximum of 90 days within any 180-day period.
The main work authorization categories are the Work Registration Certificate, which is for short-term work permit-exempt activities, and the Stay and Work Permit, which covers a wide range of work activities. The Stay and Work Permit is initially issued for up to one year and can be renewed. Furthermore, Croatia provides a Digital Nomad temporary stay permit lasting one year, catering to foreign individuals seeking to engage in remote work within the country without requiring sponsorship from a local company.
The standard rate of VAT in Croatia is 25% standard rate.