If you want to expand your business operations globally, Croatia is a great place to do so. 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, G-P eliminates the need to set up local entities or subsidiaries so you can get your business running in a matter of minutes.

Taxation rules in Croatia

Understanding your tax responsibilities as an employer is one of the most significant parts of payroll. Companies in Croatia are generally required to pay corporate income tax on taxable profits. They may also need to register for, charge, and remit value-added tax depending on their activities, turnover, and transactions.

In addition to these taxes, employers must contribute to the Croatian social security system. Employers are required to pay 16.5% of the employee’s gross salary for mandatory health insurance. Employers must also withhold a certain percentage of their employees’ gross salaries for personal income tax. Personal income tax ranges from 20% to 30%, depending on the employee’s income.

Croatia payroll options for companies

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 resources 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.
  • Global Growth Platform™: Finally, you can choose G-P’s Global Growth Platform™, which streamlines the payroll process in Croatia. We will handle the complexities and mitigate risk, so you can focus on growing your business.

How to set up a payroll in Croatia

After you decide which Croatia payroll option is best for you, you’ll need to set up the right payroll procedure for all your employees. Keep prescribed employee records accurate, current, and ready for inspection. Employers must provide them to a Labour Inspector when requested. Employees should receive a written employment contract, or written confirmation of the concluded contract before starting work. It must include key terms such as the nature of the work, working hours, salary, and other statutory particulars.

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.

Streamline global payroll management with G-P.

G-P streamlines each step of the payroll management process with our market-leading Global Growth Platform™. Pay your team with confidence anywhere in the world in 150 currencies with our 99% on-time automated payroll system — all with just a few clicks. Our products also integrate with leading HCM solutions, syncing employee payroll data across platforms automatically to create one reliable, convenient source of truth for HR teams.

Contact us to learn more about how we can support you.