Croatia PEO Services

Croatia has a GDP of around $112.6bn, and tends to experience economic growth every year. Some of the country’s largest exports include fuels, electronics, vehicles, and plastics. Croatia also boasts an educated workforce and a large English-speaking population, making working in Croatia appealing to expatriates. The currency of Croatia is the Croatian kuna (HRK).

Employment Information

• Croatia operates on a 40-hour working week as a standard, however 50/60-hour weeks can be arranged in collective agreement between an employer and their employees
• The Croatian Labour Law dictates that probation periods must be kept to a maximum of 6 months
• Croatian employees can work a maximum of 8 hours’ overtime with a written request. Overtime pay must be greater than that of an employee’s salary, and no more than 180 hours of overtime can be taken annually
• Employees in Croatia usually receive performance-related bonuses
• Employment contracts in Croatia are either Fixed Term or Indefinite Term contracts
• Some non-taxable allowances are available for employers to pay their employees. These include commuting allowances and bonuses up to HRK 5,000 per year
• Notice periods in Croatia increase according to the length of an employee’s service. 2 weeks’ notice is required for less than 1 year's service, whereas 2 months is required for 5 years of service
• Severance Pay is required when an employee’s service exceeds 2 years. This is usually 1/3 of the monthly salary for each year of service (but cannot exceed a total of 6 months of the employee’s salary)

Contributions and Taxes

• Employers must contribute 16.5% on top of their employee’s gross salary towards the Employer’s Social Security
• Croatia has a lower rate tax rate of 20% (for salaries up to HRK 30,000). A higher tax rate of 30% is applied for earnings over HRK 30,000
• Corporation Tax in Croatia is generally paid at a rate of 18%
• Some employees may be required to pay additional surtax rates (up to 18%), depending on their residency status

Public Holidays and Leaves

Croatia has several paid public holidays where employees are not permitted to work, these include:

• New Year’s Day
• Epiphany (6 January)
• Easter
• Easter Monday
• International Worker’s Day (1 May)
• Statehood Day (30 May)
• Corpus Christi (Thursday after Trinity Sunday)
• Anti-Fascist Struggle Day (22 June)
• Victory Day (5 August)
• Assumption of the Virgin Mary (15 August)
• Remembrance Day (18 November)
• All Saints Day (1 November)
• Christmas Day
• Boxing Day

Employees in Croatia are also entitled to 4 weeks of statutory annual leave as a minimum. Up to 7 days paid leave is also available for important personal needs such as marriage, birth, illness or bereavement.

Unused leave may be carried over and must be used by June 30^th of the following year.

Sick leave and parental leaves are also mandated according to the Croatian Labour Law.

Cultural Information

Croatia has a population of around 4 million people and is considered one of the safest countries in the world. Its population is predominantly Roman Catholic, though other Orthodox Christian, Muslim and Jewish groups are present throughout the country.

While Croatian is the official language of Croatia, English and German are the most commonly spoken second languages. Due to its central European location, Italian, Czech and Hungarian are also widely spoken throughout the country.

Impacts from COVID-19

Like other countries in the European Union, Croatia has implemented a range of restrictions to prevent the spread of COVID-19 throughout the country. Remote work always was possible for Croatian employees within the Croatian Labour Act; however, the pandemic has expanded this uptake significantly.

Many businesses in professional sectors have chosen remote and flexible working patterns in response to the pandemic.