Guide to employment, payroll and benefits in

Croatia

Rivermate offers complete payroll, benefits and compliance services for

Croatia

01. Overview

Last updated: 

August 19, 2021

Currency
Croatian Kuna
Capital
Zagreb
Ease of doing business
73.6
Language
Croatian
Population
4105267
GDP growth
2.92%

02. Grow your team in

Croatia

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Croatia

, particularly if you don't have established local relationships. You can hire employees in

Croatia

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Croatia, officially the Republic of Croatia, is a country on the Adriatic Sea that lies at the crossroads of Central and Southeast Europe. It shares a maritime boundary with Italy to the west and southwest, and borders Slovenia to the northwest, Hungary to the northeast, Serbia to the east, Bosnia and Herzegovina and Montenegro to the southeast. With twenty counties, Zagreb, the country's capital and largest district, is one of the country's primary subdivisions. Croatia has a population of 4.07 million people and covers 56,594 square kilometers. Croats arrived in the 6th century, and by the 9th century, the region had been divided into two duchies. During the reign of Duke Branimir, Croatia was recognized as an independent country for the first time on June 7, 879. By 925, Tomislav had become the first ruler, and Croatia had been elevated to the level of a kingdom. Croatia formed a personal union with Hungary in 1102 during the succession crisis following the end of the Trpimirovi dynasty. In 1527, the Croatian Parliament voted Ferdinand I of Austria to the throne in the face of Ottoman invasion. The State of Slovenes, Croats, and Serbs was founded in Zagreb in October 1918, independent of Austria-Hungary, and incorporated into the Kingdom of Yugoslavia in December 1918. Following the Axis invasion of Yugoslavia in April 1941, the majority of Croatia was absorbed into the Independent State of Croatia, a Nazi-installed puppet state. The Socialist Republic of Croatia was established as a result of a resistance movement, and it became a founding member and constituent of the Socialist Federal Republic of Yugoslavia after the war. Croatia proclaimed independence on June 25, 1991, and the War of Independence lasted four years after the declaration. Croatia is a republic ruled by a parliamentary structure and is a sovereign state. It is a founding member of the Union for the Mediterranean, the European Union, the United Nations, the Council of Europe, NATO, and the World Trade Organization. Croatia has been an active participant in UN peacekeeping, contributing troops to the International Security Assistance Force and holding a nonpermanent seat on the United Nations Security Council for the 2008–2009 term. The Croatian government has been investing in infrastructure since 2000, especially transportation routes and facilities along Pan-European corridors. Croatia is listed as a high-income economy by the World Bank and ranks very high on the Human Development Index. The economy is dominated by the service, manufacturing, and agricultural sectors, in that order. Croatia is one of the top 20 most popular tourist destinations in the world, so tourism is a major source of revenue. With massive government spending, the government controls a portion of the economy. Croatia's most powerful trade partner is the European Union. Croatia offers social security, universal health care, and tuition-free primary and secondary education, as well as cultural support by public institutions and mainstream media and publishing investments.

04. Public holidays

05. Types of leave

Paid time off

Employees are entitled to 20 days of paid vacation.

Public holidays

Croatia recognizes 14 public holidays.

Sick days

The company pays for the first 42 days of sick leave. The amount charged is determined by the collective bargaining agreement, but it cannot be less than 70% of the employee's gross wage for the preceding six months.Employer pays after 42 days, but is reimbursed by the Croatian Health Insurance Fund (HZZO).

Maternity leave

Paid maternity leave is required and begins 28 days before the child's due date (or 45 days if necessary) and ends 70 days after the child's birth. The mother may take paid maternity leave before the baby is six months old after that, but it is not needed.Paid maternity leave lasts for a total of 208 days.

Paternity leave

If the mother is unable to care for the infant, the parent will take over the mother's mandatory leave under exceptional circumstances. The mother will pass the remainder of the leave to the father after the 70th day after birth.

Parental leave

Each parent is entitled to paid maternity leave for each child, which can be used before the child reaches the age of eight. It lasts either 8 months (for the first and second-born child) or 30 months (for the third and fourth-born child) (for twins, third and each subsequent child). When both parents take paternity leave, it lasts for 4 to 15 months, but it lasts for 6 to 30 months if only one parent takes it.

Other leave

06. Employment termination

Termination process

Employers have the right to cancel a fixed-term contract for the following reasons: business, personal, or employee misbehavior. It demands notification and a written explanation of why the employment relationship is being terminated. If the cause is misbehavior, a warning should be issued and the employee given an opportunity to explain his or her actions.


Severance pay is provided, as are other statutory benefits, such as paid time off.

Notice period

Employees with one year of service get a two-week notice period. For employees with two years of service, the notice period is six weeks. Staff with five years of service will be given an eight-week notice period. Employees with ten years of service will be given a 10-week notice period. Staff with more than 20 years of service will be given a 12-week notice period. Employees over the age of 50 will have their notice term extended by two weeks, while those over the age of 55 will have their notice period extended by four weeks.

Severance pay

Employees who have worked for a company for at least two years are entitled to severance pay. Severance pay must equal at least one-third of the employee's annual average monthly wage.

Probation period

The probation period cannot be longer than one year.

07. Working hours

General

The standard workweek consists of 40 hours spread over five days. Overtime is limited to ten hours per week. Employers must obtain written authorization from employees to expand the scope of their work.

Overtime

Employees may work up to 8 hours per week of overtime if their employer submits a written request for overtime work. Overtime must be compensated at a rate of 50% of the employee's regular salary. Employees are generally not permitted to work more than 180 hours of overtime per year (unless agreed to in collective agreement in which case the maximum is 250 hours).

08. Minimum wage

General

Croatian labor laws mandate a monthly minimum wage of 4,250 HRK or 562.80 EUR (2021), which equates to approximately $680 in US currency at the moment. Employees can bargain for a raise or bonus in their employment contract or through a collective bargaining agreement. However, a bonus for the thirteenth month is not customary in Croatia. Instead, employees frequently receive performance-based bonuses. Although it is not mandatory, many Croatian employers will give employees annual raises based on their service.

09. Employee benefits

General

Croatia has a required health insurance program that is integrated with the mandatory employer social insurance programs. As a result, companies seldom give extra private health care coverage.

Croatian employees frequently receive advantages like as corporate cars, mobile phones, performance-based incentives, and seasonal presents such as cash, business items, or shopping vouchers during Christmas and Easter.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Croatia

to hire a team takes time, money, and effort. The labor law in

Croatia

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Croatia

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Croatia

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Croatia

via our Employer of Record / PEO solution.

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