Table of Contents

Croatia

Table of Contents

Currency

Croatian Kuna (HRK)

Payroll Frequency

Monthly

Employer Taxes

16.50%

About Croatia

Situated in the Northwestern region of the Balkan Peninsula, Croatia boasts unique distinctions, including being home to “”Hum,”” the world’s smallest town with just 30 residents. Renowned for its wine-making industry, petroleum production, and refining, the country’s diversity extends beyond its charming 100m x 30m town.

Within the confines of this small wonder, Croatia harbors a wealth of resources and a highly skilled population. For organizations seeking to engage local talent in Croatia, the need for a physical entity or local provider to manage payroll is not always mandatory.

Employment Relationship

• Permanent Employment

In Croatia, there are no special provisions that further highlight the definition of permanent employment. However, employment contracts are concluded for an indefinite period of time unless otherwise stipulated by the labor law and binds the parties until it is terminated. If an employment contract does not specify the time for which it was concluded, it is considered to have been concluded for an indefinite period. 

• Fixed-Term or Specific-Purpose Contracts

The labor code of Croatia has provisions for fixed-term employment, termination of which is pre-determined by time or performance of a particular task. The fixed-term contract can be made for up to 3 years. Breaks between employments that last less than 2 months shall not be considered an interruption of the 3-year limit. If the employee continues to work after the date of the conclusion of the fixed-term contract, it is considered to be an indefinite term contract.

• Temporary Employment Contratcs

According to the labor code of Croatia, an employer can conclude a temporary employment agreement for a fixed or indefinite term. This contract must include the following information: Specify that the contract is for a temporary position Specify the nature of the job assigned to the employee Place of work Start date and end date for fixed-term contracts Salary, wages In 2014, Croatia amended its labor code to improve the working conditions of employees who seek temporary employment through agencies by ensuring equality for temporary employees and other employees doing the same job at the same organization.

Probationary Period

In Croatia, the parties to an employment contract may agree to a probationary period of up to 6 months. The probationary period may last longer than 6 months if the employee is temporarily absent due to temporary incapacity, maternity and parental rights, or the use of paid leave. It may be extended in proportion to the duration of the absence. If a probationary period is agreed upon, the employee must be given 7 days' notice before termination. An employer has the right to terminate an employee during the probationary period if the employee's performance is not satisfactory.

Working Hours

Per the labor law of Croatia, the standard workweek is 40 hours, unless otherwise stated in a collective bargaining agreement. Employees who work over this number of hours are eligible for overtime. Overtime must not exceed 180 hours a year unless contractually agreed, in which case it must not exceed 250 hours. An employee may not work for more than one employer with a total working time of more than 40 hours per week except when the employee is working abroad.  Part-time work is any working time below the standard 40 hours per week. An employee whose total working time is 40 hours per week, may enter into an employment contract with another employer for a maximum of 8 hours per week, or up to 180 hours per year. The existing employer with whom the employee has already concluded a contract must give written consent for such work.

Holidays / PTO

• Statutory Holidays

The following are observed as public holidays and non-working days in the Republic of Croatia: New Year's Day – January 1  Epiphany or Holy Three Kings – January 6 Easter and Easter Monday – date subject to change annually Tijelovo – date subject to change annually Labor Day – May 1 Statehood Day – May 30 Anti-Fascist Struggle Day – June 22 Victory and Homeland Thanksgiving Day and Croatian Veterans Day – August 5 Assumption – August 15 All Saints Day – November 1  Day of Remembrance for the Victims of the Homeland War and Day of Remembrance for the Victims of Vukovar and Škabrnja – November 18 Christmas – December 25 The first day after Christmas, St. Stephen's Day – December 26

• Paid Annual Leave

The labor code of Croatia provides paid annual leave of at least 4 weeks to all employees. The employee is entitled to annual leave after he or she has worked for at least 6 months with the employer. The law does not allow compensation in lieu of annual leave.

• Sick Leave

The labor code of Croatia provides workers with a right to 7 working days of employee-paid leave in case of serious illness. Additionally, employees are entitled to wage replacement benefits through the Medical Committee of the Croatian Health Insurance Fund (Hrvatskog Zavoda za Zdravstveno Osiguranje or HZZO) for the first 42 days of sickness, typically paid by the employer. From the 43rd day onward, the employer continues to pay out the benefits but is reimbursed by the HZZO.

• Maternity Leave

In Croatia, an employed mother is entitled to maternity leave during pregnancy, childbirth, and care of a newborn child until the child reaches the age of 6 months. The employee is entitled to 100% of their salary compensation for the duration of maternity leave, which is paid from the funds of the Croatian Health Institute.  Croatian law dictates that the mother must use maternity leave 28 days before the expected date of delivery and use it continuously until 70 days after birth (compulsory maternity leave). An employed mother may start taking maternity leave 45 days before the day of the expected birth.

• Paternity Leave

Per the labor laws of Croatia, after the expiration of the compulsory maternity leave period, the remaining maternity leave, which lasts until the child reaches the age of 6 months, may be transferred to the child's father. An employed father is also entitled to parental leave separate from maternal leave. An employed father can use paternity leave in the period from the day of the child's birth up to the sixth month of the child's life. Fathers may take 10 working days for one child and 15 working days in the case of multiple babies (i.e. twins, triplets, etc.) An employee is entitled to parental leave for eight months for the first and second-born child, and 30 months for twins, the third, and each subsequent child. If both parents use parental leave, each can take leave for four or 15 months, depending on the number of children. Salary compensation during parental leave for the first 6 months of maternity leave or 8 months of parental leave is paid in the full amount of the salary compensation base (100% of the salary compensation base), but cannot, for full-time work, amount to more than 225.5% of the budget base per month EUR 995.45 (Euro).

Termination of Employment

• Notice Period

The Croatian Labor Code provides that, in the case of dismissal, the employer must give prior notice to the employee in writing. The duration of the notice period depends on how long the employee has been working for the same employer: 2 weeks' notice: employed for less than 1 year 1 month: employed for 1 year 1.5 half months: employed for 2 years 2 months: employed for 5 years 2.5  months: employed for 10 years 3 months: employed for 20 years An employee whose employment contract is terminated due to employee misconduct is entitled to a notice period in the amount of half of the notice periods listed above.

• Severance Benefits

An employee who is dismissed by the employer after 2 years of uninterrupted work (unless dismissed due to misconduct) is entitled to severance pay in the amount determined by the length of their previous continuous service with that employer. The severance pay may not be less than one-third of the average monthly salary earned by the employee in the 3 months before the termination of the employment contract, multiplied by each completed year of service with the same employer.