If you want to expand your business operations, Croatia is a great place to do so. Croatians are known for being highly professional while still relaxed about business. However, before you start running your business, you’ll need to hire talented employees and set up payroll in Croatia.
Starting a subsidiary and handling payroll yourself could take months. Instead, Globalization Partners can hire employees that work for your company without the headache of a subsidiary and get your business running in a matter of days.
Understanding your tax responsibilities as an employer is one of the most significant parts of payroll. Croatia does not have a state-sponsored social security system, but employers must contribute to health insurance, unemployment insurance, and accident insurance. These costs range from 0.5% to 15%. You are exempt from paying any social security contributions for five years if you hire someone less than 30 years old under a permanent contract.
Croatia Payroll Options
You have a few different Croatia payroll options depending on your company’s size and resources, including:
- Internal payroll: Larger companies ready to invest in Croatia may choose to run payroll out of the Croatia subsidiary. This option requires a full HR staff and extensive knowledge of the country’s employment laws.
- Croatia payroll outsourcing: If you lack the staff or time to learn every part of Croatia’s payroll laws, you can work with a local company to run your payroll. However, you’ll still be liable for any mistakes.
- Remote payroll: Another Croatia payroll option is to add any employees in Croatia to your company’s established payroll in the US or wherever you are located.
- Global PEO: Finally, you can choose a global PEO like Globalization Partners that can process payroll for Croatia employees for you. We will handle your payroll and assume the risk, so you only have to worry about growing your business.
What Do You Need to Set up Croatia Payroll?
After you decide which Croatia payroll options is best for you, you’ll need to set up the right payroll procedure for all your employees. Keep records of your employees since you’ll need to present them upon request to a Labour Inspector. Each employee needs a written employment contract including the nature of the work, working hours, salary, and more.
Then you must make sure your monthly payroll calculation is correct based on the number of days or hours your employees worked during the month. You’ll pay employees their net salary and forward any deductions to the relevant authorities.
Necessary Entitlement and Termination Terms
Termination is tricky in Croatia, so outlining explicit termination and entitlement terms in an employment contract is crucial. You can terminate that contract if both parties agree or if you have reasonable cause. Employees also receive severance pay under certain conditions.
Croatia Payroll Processing Company
If you’re ready to start building your business in Croatia, you aren’t alone. Globalization Partners will help you with everything from payroll to HR and get your business running sooner. Contact us today to learn more.