Croatia

Employer of Record & PEO in Croatia

Hire & manage teams remotely in Croatia without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.

Native Language

Croatian

Employee Protection

Medium

Payroll Frequency

Monthly

Capital city

Zagreb

Termination

Hard

Internet

Medium

Currency

Croatian Kuna (HRK)

Immigration

Hard

English Speaking

>50%

Population

4.06 Million

Employment Cost

Low

Cost of Living

Medium

How NNRoad Employment & PEO Services Work?

NNRoad provides professional employment organization (PEO) & employer of record (EOR) services for companies looking to hire and manage teams in Croatia. Registering a legal entity in Croatia as a means for employment is an outdated practice that takes both time (months) and money (thousands of USD). NNRoad’s employer of record and PEO services enables companies to hire and manage employees in Croatia in full accordance with local labor laws in under a week.

Employer of Record in Croatia

Employer of Record (EOR) services are for companies who do not have a legal entity in Croatia, but who want to hire in Croatia. Employment and full liability are outsourced to NNRoad.

➊ You interviews & select the candidates you want to hire in Croatia.
➋ NNRoad arranges a local labor contract with your new employee.
➌ NNRoad arranges a service contract between your organization & NNRoad.
➍ NNRoad organizes, manages & processes  payroll in Croatia in full compliance with local employment laws.
➎ You maintain a normal working relationship and manage your team in Croatia while NNRoad manages payroll & HR liabilities.

  • Engaging employees through local labor contracts including contract administration, engagement, extension termination and conversion to permanent hire
  • On-boarding and off-boarding employees following local labor law practice
  • On-boarding and off-boarding employees following local law practice
  • Registration of employees with social security board and with tax office
  • Complete payroll solution and mandatory benefit administration
  • Payments of local taxes and local social contributions to the relevant authorities
  • Payment management, including invoicing customers/clients and salary payments
  • Support with Visa and Work permit applications

Payroll & PEO in Croatia

Professional Employment Organization (PEO) services are for companies who have a legal entity in Croatia, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.

➊ You interviews & select the candidates you want to hire in Croatia.
➋ NNRoad organizes, manages and processes payroll for your local employees in full compliance with local employment laws.
➌ You maintain a normal working relationship and manage your team in Croatia while NNRoad manages payroll & HR compliance.

  • Registering and de-registering the necessary company and personnel information for payroll calculation in compliance with local rules
  • Registering all local employees with the social security board, if required
  • Calculation of gross salary, salary deductions, such as withholding taxes, social insurances, unpaid leaves, etc., and net salary based on information provided by the Company including irregular payments such as overtimes hours, incentive/bonus, domestic and foreign per diems on the basis of travel orders, etc. if applicable
  • Maintaining Payroll accounting for seconded workers
  • Preparation of applications to HZZO (Croatian Health Insurance Fund) for sick leave refund
  • Pro-rata calculation for people who join/resign
  • Monthly issue of electronic pay-slips
  • Preparation of RAD1-G report, IDD-1 form and the certificate of paid receipts

Advantages of NNRoad's Croatia Employment Services

  1. With EOR/PEO solutions you can manage client meetings, sales, quality control, marketing, R&D and customer support without a local company in Croatia.
  2. Pay as you go
  3. ​​Dedicated account manager – One point of contact for multiple locations
  4. Employment & termination processing
  5. Complete payroll solution and statutory benefit according to local laws
  6. With EOR/PEO solutions you can hire staff while waiting for the registration of your company in Croatia.
  7. NNRoad only works with professional locally licensed partners
  8. GDPR compliant
  9. NNRoad manages employee record timekeeping, bonus and allowance, expenses claims and personal leaves according to local law.
  10. NNRoad provides foreigner VISA application services, if needed

Employment Compliance in Croatia

Taxes & Payroll in Croatia

Employee Income Taxes:

Individual income tax rates in Croatia are based on progressive tax brackets. 

Tax Brackets

20%: 0 to 360,000 HRK
30%: Over 360,000 HRK

Sample Calculation

Yearly income = 300,000 HRK
20% * 300,000 = 60,000

Yearly income tax = 60,000 HRK

Employer Costs in Croatia

Employer Contributions:

16.50% – Health Insurance

Total employment cost: 16.50%

Employee Contributions:

15% – Generation Solidarity (Annual maximum of 661,032.00 HRK)
5% – Individual Capital (Monthly cap of 55,086.00 HRK)

Total employee cost: 20%

Working Hours in Croatia

Working Hours per Week

Full-time work shall not exceed 40 hours a week. Part-time work shall be any working time shorter than full-time work. The worker shall not be allowed to work at several employers with a working time exceeding forty hours a week. 

Overtime

If a worker works overtime, the total number of hours worked per week must not exceed 50. Because the full-time weekly working time in Croatia is 40 hours (including daily breaks), a worker with a full-time contract can work up to 10 hours of overtime per week, whereas a worker with a part-time contract of 20 hours per week can work up to 50 hours per week, but only 20 hours will be regular working hours and 30 hours will be overtime.

Benefits & Insurance in Croatia

Health Insurance

Health insurance in the Republic of Croatia is compulsory, meaning that every citizen of the Republic of Croatia should have regulated compulsory health insurance status. Compulsory Health insurance is implemented by the Croatian Health Insurance Fund (CHIF) and regulated by the Compulsory health insurance Act.

The right to financial compensation and the right to health care services are among the rights granted by Croatia’s mandatory health insurance.

The right to health care includes the right to:

  • Primary health care
  • Specialist health care
  • Hospital health care
  • Medications
  • Dental prostheses
  • Orthopaedic and other medical prostheses

Generation Solidarity (First pillar)

Pension insurance based on generational solidarity is a type of pension insurance in which insured persons are entitled to rights in the event of old age, reduced workability, partial or total loss of working ability, and physical impairment, and members of their family are entitled to rights in the event of the insured’s death, or beneficiary’s rights, based on reciprocity and solidarity principles.

Individual Capital (Second pillar)

Individual capitalized savings pension insurance (second pillar) ensures the same circle of people who had the status of insured people in the first pillar but were under 40 years old on the day the second pillar was implemented (on January 1, 2002) or at the time of entry into insurance (employment, self-employment, or on a different basis).

Termination Laws in Croatia

The following are the causes for regular termination as defined by the Labour Act:

  • if the need for work ceases to exist for economic, technical, or organizational reasons (notice due to business reasons);
  • the employee is incapable of fulfilling his employment-related duties due to certain personal characteristics or qualifications (notice due to personal reasons);
  • the employee intentionally breaches a contractual obligation (‘notice due to misconduct’);
  • the employee did not satisfy the employer’s requirements during the probationary period (notice due to probationary period)

For the regular termination, the notice period ranges from two weeks to three months. For 50/55-year-old employees who have 20 or more years of continuous employment with the same employer, the three-month period is extended by two weeks / one month.

Severance pay

If an employee is fired after two years of continuous employment with the same company, the employee is entitled to statutory severance compensation based on the length of service, unless the dismissal is due to the employee’s wrongdoing. The amount of severance pay for each year of employment with the same company cannot be less than one-third of the employee’s average monthly income in the three months prior to termination.

Holidays in Croatia

Public Holidays in Croatia

  • New Year’s Day – January 1st
  • Three King’s Day – January 6th
  • Easter – April 17-18
  • Labour Day – May 1st
  • Statehood Day – May 30th
  • Corpus Christ – June 16th
  • Anti-Fascist Struggle Day – June 22nd
  • Victory and Homeland Thanksgiving Day – August 5th
  • Assumption of Mary – August 15th
  • All Saint’s Day – November 1st
  • Remembrance Day – November 18th
  • Christmas and St. Stephen’s Day – December 25-26

Paid Leave in Croatia

Employees are entitled to a minimum of 4 weeks full paid leave each year.

Employment Contract in Croatia

Employment Contract

Unless otherwise specified in the labor law, an employment contract is for an indeterminate period of time. Exceptionally, an employment contract may be formed for a set duration for the purpose of starting a job when the conclusion of the job is determined by objective factors such as meeting a deadline, finishing a task, or the occurrence of a specific event.

The employment contract shall be concluded in writing. If an employment contract is not in writing, the employer is required to deliver a letter of engagement to the employee prior to the commencement of employment.

The written employment contract or letter of engagement must include the following information:

  • the parties’ identities, residences, and registered places of business;
  • place of work; 
  • the title, nature, or category of the work for which the worker is employed, or a brief specification or description of the work;
  • the date of the worker’s employment;
  • the estimated period of a fixed-term job contract in the case of a fixed-term employment contract;
  • the length of paid annual leave to which the employee is entitled, or, if this is not specified when the contract is signed or the letter of engagement is issued, the methods for assigning and deciding such annual leave;
  • the length of the notice periods to be observed by both the worker and the employer, or, if this is not specified when the contract is signed or the letter of engagement is issued, the procedure for determining the notice periods;
  • the worker’s base wage, incentives, and frequency of remuneration payments;
  • duration of a regular working day or week.

Probation Period

When entering into an employment contract, a probationary period of up to 6 months may be agreed upon, with a termination notice period of at least 7 days during that time.

Types of Leaves in Croatia

Sick Leave

An employee is entitled to up to 42 days of sick leave each year, which is compensated at 70% of the usual wage by the company. Any illness that lasts longer than 42 days is paid for by the employer and repaid by the Croatian health insurance fund.

Maternity Leave

Mothers must take maternity leave for 28 days before giving birth and up to 70 days afterward, with the option of taking additional leave until the child is six months old. The additional leave is usually unpaid, but often employers pay this as an additional benefit.

Paternity Leave

In Croatia, there is no statutory paternity leave. However, if the mother is unable to care for the child, the father can take over the mother’s statutory (70-day) leave.

Parental Leave

Each parent is entitled to 120 days of paid parental leave for each child, which must be taken by the employee before the child turns eight years old.

Immigration Laws in Croatia

A residency permit based on employment is unique permission that permits you to work for a certain Croatian company while staying in the country.

To be eligible for a work permit, you must meet the following two requirements:

  • Are a third-country national (non-EU)
  • A labor contract with a Croatian company has been offered to you

Requirements, processing times, employment eligibility, and benefits for accompanying family members vary by permit type.

Resources

Scroll to Top