It is no secret, but starting a local entity to hire from Croatia is costly. Hence, companies partner with an EOR in Croatia to hire local talent without a local entity. On your behalf, a Croatian EOR will onboard local talent on their own entity and act as the primary employer. This means the EOR will take on all the legal responsibilities and risks of being an employer for your employees, allowing you to focus on managing the day-to-day activities.

Croatia boasts a robust talent landscape with employable graduates and a young population. Besides starting a local entity, employers also need to create compliant employment contracts and payroll processes and to stay in compliance. 

Croatia, like many other countries in Europe, is an employee-friendly market. Strict regulations around wages, maternity leaves and paid leaves need employers to perform due diligence. Particularly for employers from business-friendly nations, this can be challenging.  For example, there are no federally mandated minimum wages and overtime in the USA. However, Croatian laws mandate employers to pay above the minimum wage and pay at a rate of 150% of the standard hourly rate. Moreover, trade unions and their Collective Bargaining Agreements play a significant role, especially in larger companies. For example, CBAs often outline the minimum wage thresholds for different professions within an industry. This could be different to the national minimum wage.

By leveraging a Croatian EOR, employers can offload preparing employment contracts, and payrolling amid such complicated labor laws. By entrusting your HR tasks to the experts, you can optimize your operations, minimize administrative complexities, and concentrate on achieving your business objectives.

The cost of Croatia EOR/PEO services in Croatia may differ based on various factors, such as the number of employees, the extent of services needed, and the intricacy of the project. The pricing structure for Croatia EOR/PEO services usually involves a monthly fee per employee or a percentage of the employee's salary. Extra charges may apply for additional services or customization.

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Key Metrics For Foreign Employers in Croatia

Whether you're in need of professionals in IT, engineering, finance, or other fields, you can find qualified individuals in Croatia to support your business growth. Their economics stability, low labor costs, and business-friendly climate that Croatia offers make it an attractive option for multinational corporations considering international growth. 

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Source: The Global Talent Competitiveness Index 2023

Through Gloroots' Recrew platform, you have the opportunity to discover remarkable talent in Croatia.

The term "misclassification of employees" refers to the inaccurate classification of workers by their employers. Misclassification occurs when an employer categorizes a worker as an independent contractor or exempts them from certain employment laws and benefits, even if the worker should be classified as an employee and entitled to legal protections, benefits, and rights.

Utilizing a PEO/EOR in Croatia helps mitigate the risks associated with misclassification by ensuring compliance with labour laws, proper employee classification, accurate payroll processing, and access to comprehensive benefits. This enables businesses to focus on their core operations while entrusting employment-related responsibilities to experienced professionals.

Employment Contracts

Even though written employment contracts are not required by law in Croatia, it is recommended that parties enter into a written agreement that details the important aspects of their work relationship. The identification of both parties, the start date, the location of the job, the tasks, the remuneration, the perks, the working hours, the holidays, and the notice periods are all included in these. 

It’s important for employers to understand the intricacies of these programs before making a hire. 

This might sound overwhelming—but it doesn’t have to be. A solution like Gloroots eliminates the barriers for you. With Gloroots’ Employer of Record offering, hiring and managing employees globally is a piece of cake.

Get an overview of what you need to know when hiring in Croatia.

Working Hours

The standard workweek in Croatia is 5 days, with a maximum of 40 hours. To increase working hours beyond this limit, employers must obtain written consent from the employee.

Overtime

Work overtime is only authorized when it can be rationally justified by the demands of the firm, and the total amount of overtime worked in a given year should not exceed 180 hours. Employers must put their requests for overtime in writing. 

Employees who normally put in 40 hours of work during the workweek are not permitted to work overtime more than 10 a week.

Public Holidays

The country observes 13 public holidays employees can take as paid days off.

Minimum Wage

Croatia's current monthly minimum wage stands at EUR 700 per month.

Sick Pay

Employees who are unable to work as a result of an injury or illness are entitled to receive payment from their employers in the form of sick pay. The employee should get at least 70 percent of their regular pay while on sick leave. 

In the event that an employee is absent from work for more than 42 consecutive days, the Croatian Health Institute will issue sick pay to the employee. 

It is the responsibility of the worker to provide immediate notification to his or her employer. In addition to that, they need to present a medical certificate.

Annual Leave

According to Article 81 of the Labour Act (OG 93/14, 127/17, 98/19), employees in Croatia are entitled to a minimum of four weeks (20 working days) of paid annual leave after completing six months of continuous employment.

If an employee has not met the six-month threshold, they are entitled to one-twelfth of the annual leave for each full month worked in the following cases:

Employment is established but ends before six months

Employment ends before July 1st

The employee works for multiple employers within the same calendar year

During annual leave, employees are entitled to full pay, calculated as the average salary (including in-kind benefits) earned over the three months prior to the leave.

Minor employees and those exposed to hazardous working conditions (e.g., firefighters, miners, divers) are entitled to five weeks (25 working days) of paid leave.

Maternity Leave

Pregnant employees receive 28 days of paid leave before childbirth, extendable to 45 days with medical approval, plus 70 days after birth. Afterward, they may take unpaid leave until the child is six months old or share it with the father.

Paternity Leave

After maternity leave, each parent is entitled to 4 months of parental leave per child (15 months for third child or twins), to be used before the child turns eight.

‍Income tax

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Personal Allowances

‍Social Security Contributions

Employer Payroll Contributions

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Employee Payroll Contributions

Employment Termination and Severance

The law in Croatia acknowledges a number of different reasons for an employment relationship to come to an end, including but not limited to:

• Expiration of a fixed-term contract
• Employee's resignation
• Parties' mutual consent
• Underperformance
• Serious misconduct
• Breach of employment contract
• Redundancy due to adverse economic conditions
• Unsatisfactory probation period

The notice period might be anywhere from seven days to four months long, depending on how long the employee has been with the company. Only workers with over two years of service who were let go for reasons other than misbehavior are required to receive severance compensation when their employment ends. The amount of the payout is determined by taking one-third of the typical monthly wage and multiplying that number by the number of years of service.

Notice period

In Croatia, notice period varies with employment duration.

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‍Probation period

The probationary period should not exceed Six months.

When it comes to global hiring, ensuring compliance can be a challenging endeavor. Employers must navigate through employment laws, payroll procedures, DE&I compliance, GDPR, and other regulations to ensure a smooth onboarding process. Setting up the necessary infrastructure and staying abreast of the ever-changing compliance landscape can add further complexity to the task at hand.

At Gloroots, we are here to simplify the process for you. Our comprehensive solutions provide a centralized platform to effectively manage all aspects of hiring. With our in-house experts, you can confidently navigate cross-border employment and payroll compliance risks. We will assist you in generating employment contracts, ensuring timely payments, and offering compliant benefits, allowing you to focus on talent screening and selection.

Our commitment is to provide you and your employees with a seamless global employment experience.

Contact our experts today to kickstart your global hiring campaign in Croatia.

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Growing a team means hiring the right employees at the right time and for the appropriate positions. Employers in Croatia must have a local legal organization and use local resources to handle compliance, payroll, tax, and benefits management. The complexity of employment regulations in Croatia makes compliance with employment laws demanding.

With Gloroots’s global Employer of Record (EoR) service, you can let Gloroots do the heavy lifting of payroll, tax, benefits, and compliance and concentrate on what matters to you most: your employees and company growth.