Quick facts

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Croatia, a member of the European Union, is a mixed economy with key industries in tourism, agriculture, and manufacturing. The country enjoys steady growth, leveraging its strategic position and robust service sector. However, its labor market is characterized by progressive employment laws and a strong emphasis on workers’ rights, aligning with EU standards.

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Employment Contracts

Employment contracts in Croatia are typically concluded for indefinite periods and on a full-time basis. Fixed-term contracts are permitted for specific jobs or events, and employees may combine contracts with multiple employers up to a full-time rate of 40 hours per week. With employer consent, additional contracts are allowed for up to 8 hours per week or 180 hours annually.

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Probation Period

Employers can stipulate a probationary period of up to 6 months.

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Working Hours

Standard working hours are 8 hours per day or 40 hours per week. Employees working at least 6 hours daily are entitled to a paid 30-minute break. Daily rest periods must be at least 12 consecutive hours. Overtime, night shifts, and work on Sundays or public holidays are compensated at higher rates.

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Vacation Days

Employees are entitled to a minimum of 4 weeks of paid vacation annually, with 5 weeks for minors and those working under challenging conditions. Additional vacation days may be granted based on age, family status, or job complexity, but the maximum is typically 30 days. Paid leave of up to 7 days annually is allowed for significant personal events. Vacation rights cannot be waived or replaced with monetary compensation.

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Sick Leave

Eligibility for income-replacement benefits requires at least 9 consecutive months of pensionable service or 12 months over the past 2 years. Employers cover sick leave payments for the first 42 days (or 7 days for disabled workers), with payments ranging from 70% of the average wage to a minimum of €111 and a maximum of €567. Beyond this period, payments are handled by the Croatian Health Insurance Fund (HZZO).

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Wages and Salary Payment

Salaries are typically paid monthly by the 15th day of the following month, often via bank transfer. Additional pay applies for overtime, night shifts, and work on Sundays or holidays. Collective agreements often provide a 0.5% annual increase in salaries. The minimum gross salary for 2024 is €840.

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Public Holidays

Croatia recognizes 13 public holidays, including:

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• New Year’s Day (1 January)
• Labour Day (1 May)
• Statehood Day (30 June)
• Christmas (25 December)

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Public holidays are considered non-working days.

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Employer Taxes

Employers contribute 16.5% of gross salaries to health insurance. Additional non-taxable benefits may include allowances for transportation, meals, or bonuses (e.g., Christmas bonuses up to €400).

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Employee Taxes

Croatia employs progressive tax rates:

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• 20% for income up to €48,000 annually.
• 30% for income above this threshold.

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Social security contributions are 20% of gross salaries, with 15% allocated to the first pension pillar and 5% to the second. Contribution caps are as follows:

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• €7,630 monthly for salaries.
• €91,840 annually for overall contributions.

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Notice Period

Notice periods depend on the duration of employment, ranging from 2 weeks for one year of service to 4 months for over 20 years. Employees over 50 years old are entitled to an additional 2 weeks, and those over 55 receive an extra 1 month.

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Termination and Severance Pay

Employers may terminate contracts for valid reasons, such as business changes, personal performance issues, or misconduct. Severance notice depends on the tenure:

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• 2 weeks for 1 year of service
• 2.5 months for 10 years
• 3 months for over 20 years

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Employees over 50 years old receive an additional 2 weeks, while those over 55 receive 1 additional month. Misconduct-related terminations entail half the standard notice period.