In Croatia, employer of record (EOR) products and services are essential for ensuring compliance with the country's complex employment regulations. They ensure that employment processes, from hiring to termination, meet local legal requirements. AI-powered EOR services include everything from legal employment contracts and managing payroll taxes to ensuring compliance in business operations.

By tapping into the expertise of an Employer of Record Croatia, companies can confidently navigate diverse regulatory requirements, minimizing legal risks. Support from EOR Croatia minimizes compliance issues, enabling companies to concentrate on core operations, and freeing them from the complexities of local legal and tax requirements.

Hiring in Croatia

The primary form of employment in Croatia is the indefinite-term contract. Fixed-term contracts are permissible only under specific, objective circumstances, such as for seasonal work, replacement of a temporarily absent employee, or a temporary project. Using an EOR ensures that employment contracts are drafted in full compliance with these regulations.

A written employment contract, in Croatian, is mandatory. It must specify key terms of employment, including parties' details, place of work, job title and description, start date, expected duration (for fixed-term contracts), annual leave entitlement, notice periods, and detailed information on salary and other compensation in Euros (EUR).

Working hours in Croatia

The standard workweek in Croatia is 40 hours over 5 or 6 days, with specific provisions for overtime as part of the employment contract. It ensures that employers comply with Croatian labor laws. Overtime is permitted but generally cannot exceed 10 hours per week or 180 hours per year, unless specified otherwise in a collective agreement. Employees working at least 6 hours a day are entitled to a 30-minute break, which is counted as working time. A minimum daily rest of 12 consecutive hours and a minimum weekly rest of 24 consecutive hours are mandatory.

Public holidays in Croatia

Employees in Croatia are entitled to paid time off for 14 public holidays:

Note: Easter and Corpus Christi are moveable holidays; the dates shown are for 2025.

Vacation and leave in Croatia

Croatia annual leave

The statutory minimum paid annual leave is 4 weeks per calendar year. For a standard 5-day workweek, this equates to 20 days. Specific entitlement may be increased by an employment contract or collective agreement.

Croatia personal leave

Employees are also entitled to paid leave for important personal events. The Labour Act provides for a total of up to 7 days of paid personal leave per year for events such as marriage, birth of a child, serious illness, or death of a close family member.

Croatia sick leave

An employee can take sick leave with a medical certificate. For the first 42 days of leave (or 7 days for a disabled employee), the employer pays sick leave compensation. From the 43rd day onward, compensation is paid by the Croatian Health Insurance Fund (HZZO). Croatian health regulations ensure employees receive adequate compensation during sick leave. The compensation must be at least 70% of the employee's average monthly salary in the 6 months preceding the leave, but it cannot be less than a prescribed minimum base.

Maternity, paternity, and parental leave in Croatia

Maternity leave in Croatia

Pregnant employees are entitled to maternity leave, which starts 28 days before the due date (or 45 days in case of complications) and lasts until the child is 6 months old. The period from 28 days before the due date until 70 days after birth is mandatory for the birth parent. During this leave, compensation is 100% of the salary base, paid by the HZZO.

Paternity leave in Croatia

Fathers are entitled to 10 working days of paid paternity leave for a single child, or 15 working days for twins or multiples. This leave is an individual right, non-transferable, and must be used within the first 6 months after the child's birth. It is fully compensated by the HZZO.

Parental leave in Croatia

After maternity leave ends, each parent is entitled to 4 months of parental leave per child for their first and second child (total of 8 months). For twins or the third and subsequent child, the leave is extended to 15 months per parent (total of 30 months). Generally, 2 months of each parent’s entitlement are non-transferable. The leave can be used until the child turns 8 years old. Compensation during parental leave is paid by the HZZO, subject to a cap.

Health insurance and supplementary benefits in Croatia

Croatia health insurance

Croatia has a mandatory public health insurance system funded by social security contributions. While this system provides comprehensive coverage, employers can offer supplementary private health insurance as a highly valued benefit to cover costs not included in the public scheme and provide access to private clinics.

Croatia supplementary benefits

In addition to base salary, it is common practice in Croatia for employers to offer supplementary benefits, many of which can be provided tax-efficiently. These often include:

Termination and severance in Croatia

A probationary period may be set in the employment contract for a maximum of 6 months. During this period, the contract can be terminated with a minimum notice of 7 days.

An employer may terminate an indefinite-term contract for business-related reasons, personal reasons (employee incapability), or employee misconduct. Each reason requires a specific and fair procedure to be followed to avoid wrongful dismissal claims, ensuring companies adhere to Croatian employment laws. Notice periods for termination (not due to misconduct) depend on the employee's length of service with the employer:

Croatia severance pay

Employees terminated after at least 2 years of continuous employment (for reasons other than misconduct) are entitled to statutory severance pay in accordance with Croatian regulations. The minimum amount is one-third of the employee's average gross monthly salary (over the 3 months preceding termination) for each year of service. Total statutory severance is capped at 6 times the employee's average monthly salary.

Paying taxes in Croatia

Employers are responsible for withholding and remitting income tax and social security contributions from employees' gross salaries. Navigating Croatia’s tax system is a key function an EOR provides, ensuring compliance with local tax obligations. An EOR manages payroll intricacies, helping companies fulfill their tax responsibilities swiftly.

Croatia income tax

As of 2025, income is taxed at 2 progressive rates:

These rates may be increased by a local municipal tax rate, which varies by location (e.g., the rate for Zagreb is 23.6% and 35.4% respectively). This system replaced the former local surtax (prirez) in 2024.

Croatia social security contributions

The primary contributions are deducted from the employee's gross salary:

The employer also pays a contribution for health protection at work, which is a small percentage of the gross salary.

Why G-P?

G-P EOR is the award-winning, AI-powered SaaS platform that empowers ambitious companies to build global teams. Onboard, manage, and pay top talent in over 180 countries in minutes, bypassing the typical time, cost, and complexity of local entity setup. G-P EOR is the preferred partner for leading HCM, PEO, and payroll platforms. Bring your workforce data together in one place to maintain existing workflows while guaranteeing consistent and accurate data across your integrated systems.

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