Employer of Record Croatia
Our Employer of Record in Croatia service enables clients to hire employees without the need to operate a local legal entity there.
It makes a big difference to develop a new market with your own personnel on the ground. Particularly for functions related to sales & marketing, business development, distributor management, and service & maintenance, our customers are very satisfied using our Croatia Employer of Record Service.
Our customers and their local teams can be free of the distractions of administrative tasks and complex local requirements. So you can fully focus on the development of your core business.
If your local business grows large enough, you can easily transfer the employees to your own subsidiary. It also provides a quick exit strategy if necessary. In addition to Croatia, we offer Employer of Record services in several other countries.
- Employer of Record Croatia – FMC Group’s Approach
- Hiring an Employee
- Income Tax
- Typical Benefits
- Visa for the Employees
- Time off Policies
- Terminating an Employee
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Employer of Record Croatia - FMC Group's Approach
- Quick, flexible, and easy entry into Netherlands in compliance with local employment laws
- Complete control over business development with your own team
- Good option for building up, managing, and supporting your distributors and key accounts by directly observing local developments and adjusting the strategy whenever necessary
- Using our comprehensive recruitment experience for international clients, we can form a local team that fits your corporate culture.
- Focusing on your core business instead of dealing with the time-consuming and complex local administrative tasks
- Allowing for easy market exit if necessary
- Integrating your employees into our team through motivational events and special meetings
EOR Croatia Management & Reporting Flow
Hiring an Employee
In Croatia, it is indeed a legal requirement for employers to provide new employees with a formal contract of employment that includes all relevant details of the employment agreement. The contract should be written in the local language, which is Croatian, to ensure that both parties fully understand the terms and conditions of employment.
Additionally, any references to compensation should be expressed in the local currency, the Croatian kuna (HRK), to provide clarity and transparency regarding salary and benefits.
Employment Contract – indefinite vs. fixed term
In Croatia, the general practice for employment contracts is to establish indefinite-duration contracts for either full-time or part-time employment. However, there are exceptions when a contract may be made for a definite period. Such exceptions include seasonal work, temporary replacement of an absent employee, or for a specific temporary project or task.
Croatian labor laws stipulate specific requirements for employment contracts:
- Written Contracts: Employment contracts must be provided in writing to ensure clarity and legal compliance.
- Language Requirements: Contracts must be written in the local language (Croatian) or bilingual if necessary to accommodate the parties involved.
- Mandatory Information: The contract should clearly state essential information related to the contracting parties, including their addresses. It must also cover details such as salary (specified in Croatian kuna), working hours, the place of work, job title, the nature or category of work, the contract’s start date, annual leave entitlements, and notice periods.
Adhering to these legal requirements helps ensure that both employers and employees have a clear understanding of the terms and conditions of the employment agreement, contributing to a transparent and legally compliant employment relationship.
In Croatia, the probationary period, as per the Labor Act of 2014, typically lasts for a maximum of six months after the signing of the employment contract. During this probationary period, either the employer or the employee can terminate the employment relationship with a notice period of at least seven days.
Work Week, Overtime & Maximum Working Hours
In Croatia, the standard workweek for full-time employees typically consists of up to 40 hours, which can be spread out over 5 or 6 days, depending on the employer’s policies. However, employees may have the option to work overtime if necessary, with certain limitations in place:
- Overtime Hours: Overtime work should not exceed 10 additional working hours per week.
- Annual Limit: Annually, the total overtime work hours should generally not exceed 180 hours, unless stated otherwise in the employment contract or collective agreements.
- Compensation: The compensation for overtime work is typically determined through the employment agreement or collective bargaining agreements. This means that the terms and rates for overtime pay should be outlined in the employment contract, providing clarity for both employers and employees.
Employers and employees need to adhere to these regulations regarding working hours and overtime to ensure compliance with Croatian labor laws and to provide fair compensation for additional work performed beyond the standard workweek.
In Croatia, personal income tax is applicable to individuals who are physically present and earning income within the country. This means that residents and non-residents who generate income in Croatia may be subject to personal income tax based on their earnings and other relevant factors.
|Tax Rate (%)
|Above HRK 360,000
|Up to HRK 360,000
In Croatia, there are mandatory employee benefits such as government-covered healthcare and mandatory health insurance contributions, which means that private health insurance is not usually necessary for employees. However, some employers may choose to offer private health insurance as part of their benefits packages, although it is not mandatory.
Additionally, there are non-mandatory employee benefits that employers may offer at their discretion. These can vary from one company to another and are not required by law. Some of these non-mandatory benefits may include:
- Life insurance
- Private health insurance (even though government healthcare is available)
- Transportation allowance
- Wellness programs
- Training and education opportunities
The specific benefits offered to employees can depend on the employer’s policies and employment agreements. Employees are advised to review their employment contracts and company guidelines to understand the specific benefits they are eligible for and to make informed decisions regarding their compensation packages
Visa for the Employees
In Croatia, both a work permit and a residency permit are mandatory requirements for employees who are not European Union (EU) citizens and are planning to work in the country. European citizens have the freedom to live and work in Croatia without additional visa requirements due to Croatia’s EU membership.
For non-EU foreign nationals who wish to live and work in Croatia, the following steps typically apply:
- Employer Sponsorship: To work in Croatia, foreign employees must have an employer in Croatia who can obtain a work permit on their behalf. This means that the employer plays a key role in the immigration process.
- Work Permit: Before applying for a long-stay visa for work and business purposes, the employer must obtain a work permit for the employee. A valid work permit is a prerequisite for obtaining a temporary residence permit for work.
- Temporary Residence Permit: Once the work permit is secured, the employee can apply for a temporary residence permit, which is necessary for legal residence and work in Croatia.
- Long-Stay Visa: In some cases, depending on the individual’s nationality and the specific circumstances, a long-stay visa for work and business purposes may also be required as part of the process.
Time off Policies
Croatia observes a total of 14 public holidays, during which employees are typically given the day off. These public holidays may vary each year, and they can include both national and religious holidays. Some of the major public holidays celebrated in Croatia include:
- New Year’s Day
- Easter Monday
- Labor Day
- National Day
- Corpus Christi
- Anti-Fascist Struggle Day
- Victory Day
- Assumption Day
- All Saints’ Day
- Day of Remembrance
- Christmas Day
- Saint Stephen’s Day
In Croatia, employees are entitled to a statutory minimum annual leave of 4 weeks per calendar year. This means that full-time employees are entitled to a minimum of 20 days of paid annual leave each year. This annual leave is provided to allow employees to take a break from work, rest, and recharge.
Additionally, employees in Croatia are entitled to special leave days for important personal events, such as marriage or the death of a close family member. These special leave days are typically granted and can provide employees with up to 7 days of leave per calendar year to attend to these significant life events.
In Croatia, employees are entitled to sick leave benefits to address illness or injury. The sick leave entitlement typically allows for up to 42 days of sick leave annually, during which employees receive compensation at 70% of their standard salary.
It’s important to note that beyond these initial 42 days of sick leave, the additional leave days due to illness or injury are paid for by the employer. The employer is then reimbursed for these additional sick leave days by Croatia’s Health Insurance Fund. This arrangement helps ensure that employees receive necessary support during extended periods of illness or recovery.
Other Leave Types
In Croatia, there are provisions in place to support parents and caregivers with leave entitlements to care for their children. These include:
- Maternity Leave: Female employees are entitled to 98 days of maternity leave, with the option to take 28 days of this leave before giving birth. This provides expecting mothers with time to prepare and rest before the birth of their child.
- Parental Leave: Parents are entitled to parental leave for a total of four months per parent for children aged between six months and eight years. If parents have twins or three or more children, they are allowed 15 months of parental leave each.
- After this initial period of parental leave, employees have the option to reduce their work hours to half until their children reach the age of three. If the child is disabled or has special needs, this arrangement can be extended until the child turns eight years old.
- Adoption Leave: In cases of adoption, employees receive six months of leave for children up to 18 years of age. An additional six months of leave is granted if the adopted child is below eight years of age.
Terminating an Employee
In Croatia, the employment relationship can include a probationary period, typically lasting up to 6 months. During this probationary period, the employer has the right to assess the employee’s suitability for the position. If it is determined that the employee does not meet the criteria for the job, the employer may dismiss the employee without the need for severance pay. However, a minimum of 7 days’ written notice is required for this termination during the probationary period.
Employment relationships can also be terminated by mutual agreement between both parties.
The minimum notice periods for regular terminations based on the length of employment are as follows:
- Before completing the first year of employment: 2 weeks’ notice
- After 1 year of employment: 1 month’s notice
- After 2 years of employment: 1 month and 2 weeks’ notice
- After 5 years of employment: 2 months’ notice
- After 10 years of employment: 2 months and 2 weeks’ notice
- After 20 years of employment with the same employer: 3 months’ notice
Additionally, employees who are terminated (other than for misconduct) after completing 2 years of continuous employment are entitled to severance pay. Severance pay is calculated as 1/3 of the average monthly salary, based on the three months preceding the termination, for each consecutive year of employment with the same employer. This provides financial support to employees who lose their jobs due to reasons other than their own misconduct after long-term service with the employer.
Disclaimer: Although we carefully researched and compiled the above information, we do not give any guarantee with respect to the actuality, correctness, and completeness.