Croatia offers companies endless opportunities for growth and expansion, with shipbuilding and tourism the most prominent industries. To get started in Croatia, you must have a registered accountant to manage your tax filings and report to the government. Croatia also has a PDV tax (similar to VAT in other countries) which is 25% added to the sale of items (10% on select tourist items). Accepting cash payments for your business increases your reporting liabilities to the government, including reporting cash transactions in real-time.

Labor and Payroll Considerations in Croatia:

  • Minimum wage is HRK 4,062 per month
  • All contracts must be in writing, but if a verbal agreement is made, it is considered indefinite
  • Normal working hours are 40 per week, any time worked beyond 40 hours is considered overtime
  • Overtime must not exceed 180 hours a year unless contractually agreed upon
  • Employees dismissed after 2 years of uninterrupted work are entitled to severance pay in the amount determined by the length of their continuous service with the employer
  • Severance pay cannot be less than 1/3 of the average monthly salary
  • Income tax payments are via a Pay-As-You-Earn (PAYE) system
  • There is income and municipal taxes, with an effective tax rate a combination of the two. Rates range from 24% for income up to 360,000 HRK and 36% for income exceeding 360,000 per year

HR and Statutory Requirements

  • All employees receive at least 4 weeks of annual leave after they have worked at least 6 months
  • Employees are entitled to 7 days of employee-paid sick leave, then paid through the Medical Committee of Croatian Health Insurance Fund
  • Maternity is granted until the newborn reaches 6 months of age. Employees are compensated 100% of their salary, and any remaining maternity leave can be transferred to the father of the child
  • Age old pensions is acquired when men reach 65 years of age and have 15 years of service. For female employees the age is 62

Holidays in Croatia

  • January 1 – New Year’s Day
  • January 6 – Epiphany
  • April 17 – Easter Sunday
  • April 18 – Easter Monday
  • May 1 – Labor Day / May Day
  • May 30 – Statehood Day
  • June 16 – Corpus Christi
  • June 22 – Day of Antifascist Struggle
  • August 5 – Homeland Thanksgiving Day
  • August 15 – Assumption of Mary
  • November 1 – All Saints’ Day
  • November 18 – Remembrance Day
  • December 25 – Christmas Day
  • December 26 – St. Stephen’s Day

If you are expanding into Croatia, or would like to simplify operations, we can help. Our cloud-based payroll platform with customized reporting gives you real-time access to your payroll across all countries and currencies. Our hybrid service model provides a dedicated US-based team and in-country experts to help when questions come up. Talk to us to help with business entity set up, accounting and tax filings, and payroll in Croatia. Simplify your operations and ensure compliance – get started today! Click here to learn more