Hire in Croatia

EOR in Croatia

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Croatia, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Croatia ―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in Croatia and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in Croatia

Employment in Croatia is governed by the Croatian Labor Act, the constitution, collective bargaining agreements and individual employment agreements, as well as international conventions and treaties.

Employment contracts in Croatia

As you look to hire employees in Croatia, here are some standard regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours

The number of weekly working hours is limited by statute to 40.

The only exception is when an employee who works full time enters into an employment agreement with another employer for additional work up to eight hours a week (180 hours a year), in which case both employers need to provide their written consent.

Every employee who works at least six hours a day (or in the case of minor employees 4.5 hours a day) is entitled to a rest break of at least 30 minutes, which is to be counted as working time.

Employees are also entitled to minimum daily rest periods of 12 consecutive hours and weekly rest periods of 24 uninterrupted hours. For minor employees, weekly rest amounts to 48 hours. Employees normally use their weekly rest on Sunday and Saturday or Monday. If this is impossible due to the organization’s work schedule, employers need to ensure the use of alternative weekly rest.

Employers can require employees to perform overtime work only in situations of absolute necessity. Overtime work cannot exceed 50 hours a week or 180 hours a year unless stipulated in a collective bargaining agreement (in which case the maximum duration of overtime work is 250 hours a year).

Compensation

As you consider the appropriate salary to offer new employees, keep in mind:

• Effective January 1, 2024, the monthly minimum wage is 840 euros per month.
• In Croatia, minimum wage is defined by the following regulations:
• Employees are entitled to an increased wage in cases of overtime work, although the law does not prescribe the exact amount.
• Employees who are required to work on a national holiday are entitled to extra pay, which is typically negotiated in the bargaining agreement.

As your employer of record in Croatia, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses

While there is no legal obligation for an employer to pay bonuses, it is quite common for Croatian businesses to agree to various bonus payments under an employment contract or a collective bargaining agreement. It is also common to pay certain bonuses even if these have not been formally agreed to.

The most common bonuses or gratuities are:

• Christmas bonus
• Easter bonus
• Gifts for children
• Annual vacation bonus
• Seniority bonus
• Retirement bonus (mostly in state services).

Probationary period

A probationary period can be no longer than six months.

Termination and severance

Notice periods must be proportional to the duration of employment and amount to at least two weeks for less than one year of employment.

• After the first year, an employer has to observe a notice period of one month.
• After two, five, 10, or 20 years of employment, the statutory notice period increases to one month and two weeks, two months, two months, and two weeks and three months, respectively.
• After 20 years of employment, the notice period increases by two weeks for employees aged at least 50 years and by one month for employees aged at least 55.

During the notice period, employees are entitled to receive their wages and all other entitlements under the law. Garden leave— the employee paid but required not to work—during the notice period is allowed.

Employees are entitled to terminate an employment agreement without stating the reason, although legally prescribed or agreed notice periods must be respected.

Employees with at least two years’ employment with the same employer dismissed for economic reasons or for inability to perform the job must receive a severance payment.

The minimum amount of severance is calculated by multiplying one-third of the average monthly wage paid in the last three months by the number of years of continuous employment with the same employer. Severance is capped at six times the average monthly wage unless otherwise stipulated by law, employment bylaw, collective bargaining agreement, or employment agreement.

Employers and employees are allowed to agree on notice periods and severance payments more favorable for an employee than provisions prescribed by the law.

Employee benefits and paid leave in Croatia

When negotiating terms of an employment contract with a candidate in Croatia, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave

Employed pregnant women are entitled to maternity leave beginning 28 days before the date of birth. In case of complications resulting from pregnancy, leave can be taken 45 days before the birth.

After a child is born, mothers are entitled to postnatal leave until the child reaches 6 months of age. This period is divided into mandatory and additional postnatal leave. Mandatory leave lasts for 70 days after childbirth and has to be used by the mother. Additional maternity leave begins on the 71st day after childbirth and lasts up to six months. The father of the child has the right to use the remaining period of maternity leave if the mother agrees.

The maternity entitlement amounts to 100% of the average monthly earnings of the insured person in the last six months before the month in which the maternity leave began and is paid by the Croatian Institute for Health Insurance; the employer bears no cost.

Vacation

Under the Labor Act, employees are entitled to at least four weeks of vacation leave per year.

During vacation, employees are entitled to remuneration in the minimum amount of their average monthly wage during the previous three months. Employees are eligible for their full vacation entitlements if they have been employed for at least six months and cannot waive their vacation rights or agree to compensation in exchange for time off.

The unused portion of annual vacation can be carried over to the following year but must be used at the latest by June 30 (some exceptions are allowed in instances such as sickness and maternity leave). Upon termination of employment, an employee is entitled to compensation for unused vacation days.

Employers must prepare a schedule for taking annual leave no later than June 30th of the current year, and inform the employees about the schedule. An employee must be informed about the duration and schedule of annual leave at least 15 days before the annual leave is to be taken. Employees are allowed to take one vacation day any time they want, provided they inform the employer at least three days in advance and the employer has no credible reason for refusing the request.

Holidays

The following are the national holidays in Croatia:

• New Year’s Day
• Epiphany
• Easter
• Easter Monday
• International Workers’ Day
• Corpus Christi
• Fascist Resistance Day
• National Day
• Homeland Thanksgiving Day
• Assumption
• Independence Day
• All Saints’ Day
• Remembrance Day
• Christmas
• St. Stephen’s Day

Croatia also observes several unofficial holidays and observances including the Carnival celebrations held on Shrove Tuesday, the day before the beginning of Lent.

Sick leave

Employees are entitled to paid sick leave for a single illness of a maximum of three years. After six months’ sick leave, the employee is subject to sick leave review by the Institute for Health Insurance.

During the first 42 days of sick leave, the employer is obligated to pay remuneration equal to 70% of the employee’s average wage in the preceding six months. After the 42nd day of sick leave, compensation is reimbursed by the Institute for Health Insurance.

Health coverage

The minimum retirement age in Croatia is 65 with 15 years of contributions into the social security system.

Social security benefits in Croatia include pension insurance, health insurance, unemployment insurance, work injuries, and professional disease insurance.

The pension system is composed of three parts:

• The generational solidarity system
• Compulsory individual pension insurance
• Voluntary pension insurance

Insured employees must generally contribute 15% of wages to the generational solidarity system and 5% to the compulsory individual pension insurance system.

The Croatian Institute for Pension Insurance (HZMO) is responsible for organizing and implementing the pension insurance system.

Additional benefits

In addition to healthcare benefits, employees in Croatia are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance.

Employer social costs will cover a large portion of employee benefits in Croatia, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance if needed.

Updated: July 02, 2024

Employee onboarding with an employer of record in Croatia

We write and validate all local employment contracts, streamlining the onboarding process for you and your Croatian employees—all you have to do is provide relevant information and review and approve the employment agreement. As your employer of record in Croatia, we will:

• Schedule a welcome call to discuss HR and employment information for Croatia, as well as answer any questions
• Prepare a customized employment contract in English or other local language
• Share the employment contract and benefits information with the new employee for signature and review
• Gather tax and banking information from the employee to set up payroll
• Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll

The entire onboarding process for the employee is often completed in as little as two weeks.

Partner with Safeguard Global as your Croatia employer of record and PEO

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Croatia. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.