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Before hiring employees in Croatia, there are a few important things you’ll need to know. Firstly, 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.
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.
We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform.
Get an overview of what you need to know when hiring in Croatia below.
In Croatia, full-time employment cannot be more than 40 hours per week. An employee can work up to 48 hours in a week, but eight of these will be overtime.
Employees are entitled to a minimum of 12 hours break between two consecutive work days and at least 24 consecutive hours once a week
It is a legal obligation in Croatia to include details of any leave on a payslip, so all time off must be recorded and approved.
A probationary period in Croatia cannot exceed six months. During the agreed probationary period, the termination period must be at least seven days.
In Croatia, the notice period is defined by law and varies depending on the length of continuous employment, and potentially with age. It goes as follows:
Non-compete clauses can be included in the employment agreement provided it has been mutually agreed, and the employee is earning above the national average wage in Croatia. A non-compete cannot last more than two years and will only be valid if it aims to protect legitimate business interests and does not disproportionately limit the ex-employee's work opportunities elsewhere.
Employees in Croatia are entitled to at least four weeks of annual vacation.
Paid leave is available for important personal reasons such as marriage, childbirth, serious illness or death in the immediate family. Employers can also grant unpaid leave if requested.
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.
To be eligible for sickness income replacement benefit, employees in Croatia must have had nine consecutive months of pensionable service, or at least 12 months in the last two years if they’ve had interruptions in their career. Without this, they’re only entitled to minimum sick pay.
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.
Mandatory maternity leave consists of 28 days before the expected birth date, but can be taken up to 45 days before in case of complications, and lasts up to 70 days after the birth.
Additional maternity leave lasts up to six months, but mothers can transfer part or all of it over to the father if she decides to go back to work.
A parent is entitled to take more parental leave when their child or children are between the ages of six months and eight years of age.
In Croatia, an employer’s social contributions total 16.5%. Health Insurance is paid at 16.5% of an employee’s gross salary, and is not capped.
Employees in Croatia pay between 24% and 36% in taxes depending on their income bracket.
Employees also pay social security contributions of 20%. These are pension contributions (15% goes to Pillar I and 5% goes to Pillar II) Both contributions are capped at 52,452 HRK monthly.
In Croatia, employees also pay a municipality surtax of up to 18%.
All terminations must be notified to the employee in writing and there can be regular or exceptional terminations. The types of terminations are as follows:
Regular termination (with agreed notice):
Exceptional terminations can be executed with only 15 days' notice from learning about an issue where there is a serious breach in employment relationship or other highly important fact.
Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast.
We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities.
With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.
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