Employer of Record in Croatia

An Employer of Record (EOR) in Croatia is a company that legally hires employees on your behalf. This means you can build a team in Croatia without setting up a local entity. An EOR handles all the legal and HR tasks, like payroll, taxes, benefits, and compliance with Croatian labor laws. This lets you focus on managing your team's day-to-day work. Companies like Rivermate offer EOR services to simplify your expansion into Croatia.

How an Employer of Record (EOR) Works in Croatia

Using an EOR in Croatia simplifies the process of hiring employees. Here is how it generally works:

1. You Find the Candidate: You recruit and select the best person for the job.
2. The EOR Hires Your Candidate: The EOR legally hires the employee through a local, compliant employment contract.
3. Onboarding and HR: The EOR manages the entire onboarding process. They also handle all HR administrative tasks, including payroll, taxes, and benefits, in compliance with Croatian regulations.
4. You Manage Your Employee: You manage your employee's daily tasks and responsibilities, while the EOR takes care of the legal and HR complexities.

Why use an Employer of Record in Croatia

An EOR helps you hire in Croatia quickly and safely. It removes the need to open a local company, which saves you time and money. You can enter the market faster and avoid the complexities of Croatian employment laws.

Here are some key benefits:

• Faster Market Entry: Hire employees in days, not months.
• Legal Compliance: EORs are experts in Croatian labor law, so you do not have to be. They ensure your employment contracts and practices are fully compliant.
• Reduced Costs: Avoid the significant expenses and administrative burden of setting up and maintaining a legal entity in Croatia.
• Simplified HR: The EOR handles payroll, tax withholdings, and mandatory social contributions. This frees up your time to focus on your business.
• Competitive Benefits: Offer your Croatian employees competitive and compliant benefits packages, which can be difficult to arrange from abroad.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Croatia includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Croatia.

Hiring in Croatia is a strategic move for many companies. Its membership in the European Union opens up a large talent pool, and the country has a growing tech scene. Croatians value a healthy work-life balance, with a standard 40-hour workweek. When you decide to hire here, you can either set up your own local entity or partner with an Employer of Record (EOR). An EOR allows you to enter the market quickly, handling payroll, taxes, and compliance for you.

Employment contracts & must-have clauses

You must provide a written employment contract in Croatian. While verbal agreements can exist, key terms and specific contract types require written documentation to be enforceable. If you don't provide a written contract, the law considers the employment to be for an indefinite term.

Your contracts can be for a fixed term or an indefinite period. You can have a maximum of three consecutive fixed-term contracts, and their total duration cannot exceed three years.

Make sure every employment contract includes these essential clauses:

• Parties involved: The names and addresses of your company and the employee.
• Place of work: Where the employee will be based.
• Job details: The job title and a description of the work.
• Start date: The first day of employment.
• Contract duration: Specify if it's a fixed-term or indefinite contract.
• Salary: The gross salary, including any allowances and payment schedules.
• Working hours: The expected daily and weekly hours.
• Annual leave: The amount of paid vacation time.
• Notice periods: The process and timeline for termination.

Probation periods

You can include a probation period in an employment contract to see if a new hire is a good fit.

• The maximum length of a probation period is six months.
• If an employee is absent for an extended time (like sick leave), you can extend the probation period by the amount of time they were away.
• During probation, the notice period for termination is shorter, typically at least seven days.

Working hours & overtime

A standard workweek in Croatia is 40 hours, usually spread over five days.

• Overtime: You can ask employees to work overtime, but it's regulated. The weekly limit, including overtime, is 50 hours. Annually, overtime is capped at 180 hours, though a collective agreement can increase this to 250 hours.
• Overtime Pay: The law does not set a specific rate for overtime pay; this should be defined in the employment contract or a collective agreement.
• Consent for Overtime: Certain employees, like pregnant workers and parents of young children, must provide written consent to work overtime.
• Breaks: Employees working at least six hours a day get a paid 30-minute break. They are also entitled to a daily rest period of at least 12 hours.

Public & regional holidays

Employees in Croatia are entitled to paid time off for public holidays. The official public holidays for 2024 are:

Hiring contractors in Croatia

You can hire independent contractors for specific projects, which offers flexibility. However, you must classify them correctly. An independent contractor runs their own business, works for multiple clients, and uses their own tools. They are not covered by Croatian labor laws, meaning they don't get benefits like paid leave or minimum wage.

The biggest risk is misclassification. If authorities determine a contractor is actually a "disguised employee" because you control their work, hours, and location, you face serious penalties. These can include fines, back payment of taxes and social contributions, and being forced to provide full employment benefits.

An Employer of Record (EOR) helps you avoid this risk. An EOR can hire workers on your behalf, ensuring they are classified correctly and that you comply with all local labor laws. This lets you work with talent in Croatia without the legal and administrative burden of misclassification.

In Croatia, you pay your employees monthly in Euros. You must deposit their salary into a local Croatian bank account. This is a key part of managing your payroll in the country. The system is a mix of national laws and EU regulations. Since Croatia adopted the Euro in 2023, staying updated on payment practices is important.

Payroll cycles & wage structure

You should pay your employees once a month. The law requires you to pay salaries by the 15th of the month for the previous month's work. All payments must be made via bank transfer. You are also required to give each employee a payslip that details their gross earnings, deductions, and net pay.

A typical compensation structure in Croatia includes the base salary plus other potential elements:

• 13th-month salary: While not required by law, many companies provide a Christmas bonus, often equal to a month's salary.
• Meal allowances: It is common practice to offer meal vouchers or allowances as a tax-friendly benefit.
• Holiday pay: You must provide extra pay for work done on Croatia's national holidays.

Overtime & minimums

Standard working hours in Croatia are 40 hours per week. If you require an employee to work more than that, you must pay them for overtime. The minimum overtime rate is 50% above the employee's regular hourly pay. Collective agreements or individual contracts can set a higher rate.

As of January 1, 2025, the national gross minimum wage is set at 970 EUR per month.

Employer taxes and contributions

As an employer, you pay social security contributions on top of the employee's gross salary. These contributions cover pensions and health insurance.

Employee taxes and deductions

Employees also contribute to social security from their gross salary. They also pay income tax.

In Croatia, the benefits and leave you offer your team are a mix of government-required entitlements and extra perks. The law sets the minimum standards for things like vacation time and sick days. To attract and keep the best talent, many companies offer more than the basics. This shows employees you value their well-being and creates a better work environment.

Statutory leave

Croatian law outlines several types of mandatory leave for employees.

• Annual Leave: Employees get a minimum of four weeks of paid vacation each year after they have worked for you for six months. You can offer more than this, and it should be noted in the employment contract. Unused vacation days can be carried over, but your employee must use them by June 30th of the following year.
• Sick Leave: An employee can take up to 42 days of sick leave. You pay at least 70% of their regular salary during this time. If they are sick for longer than 42 days, the Croatian Health Insurance Fund covers the cost.
• Maternity Leave: Pregnant employees can start their leave 28 to 45 days before their due date. After the baby is born, they are entitled to 70 days of maternity leave. This leave is paid.
• Bereavement Leave: Employees can take up to seven days of paid leave if an immediate family member passes away.

Public holidays & regional holidays

Your employees are entitled to paid time off for public holidays. If they have to work on one of these days, they are entitled to higher pay.

This table does not include regional holidays, which can vary.

Typical supplemental benefits

Here is a look at both the required benefits and the extra perks that can make your company more attractive.

How an EOR can help with setting up benefits

Setting up a benefits package in a new country can be complicated. An Employer of Record (EOR) simplifies this process for you.

An EOR already understands the local laws and employee expectations in Croatia. We handle the administrative work of enrolling your employees in mandatory benefits like health insurance and social security. We can also advise you on supplemental benefits that are competitive in the local market. This saves you time and reduces the risk of non-compliance. We take care of the paperwork so you can focus on supporting your team.

When you part ways with an employee in Croatia, you need to follow a structured process. It’s not just about saying goodbye; it’s about ensuring you meet all legal requirements to avoid any complications. You must provide a written notice of dismissal that clearly states the reasons for the termination. The process also involves de-registering the employee from the Tax and Insurance Authorities and paying out any final salaries, unused vacation time, and severance that are due.

Notice periods

You must give employees a notice period before their employment ends. The length of this period depends on how long the employee has worked for your company.

Here is a breakdown of the minimum notice periods:

• Less than 1 year of service: 2 weeks
• 1 year of service: 4 weeks
• 2 years of service: 6 weeks
• 5 years of service: 8 weeks
• 10 years of service: 10 weeks
• 20 or more years of service: 12 weeks

For employees on probation, the notice period is seven days. In cases of serious misconduct, you can terminate an employment contract immediately, without a notice period.

Severance pay

Employees who have worked for you for at least two years are entitled to severance pay. The amount is calculated as one-third of their average monthly salary for each year they have worked for you. For example, an employee who has been with your company for 12 years would receive four months' wages as severance.

How Rivermate handles compliant exits

Navigating the details of Croatian labor law can be complex. We make sure every termination is handled correctly and in full compliance with local regulations.

Here’s how we help you manage the offboarding process:

• Legal expertise: We ensure that all termination procedures align with Croatian labor laws.
• Proper notice and pay: We calculate and provide the correct notice period and any severance pay owed to the employee.
• Administrative tasks: We handle the final payment processing, including accrued leave and other benefits.
• Documentation: We prepare and maintain all necessary documentation related to the termination to ensure you are fully compliant.

Navigating the world of visas and work permits in Croatia can feel complicated. Put simply, if you are not a citizen of the EU or EEA, you will need permission to work in the country. This usually means getting a combined stay and work permit. Think of this as your main ticket to legally live and work in Croatia. The process involves your employer proving they couldn't find a suitable local candidate for your job.

Employment visas & sponsorship realities

When it comes to getting a work permit, you need a sponsor. This sponsor must be a legally registered company in Croatia. This is where an Employer of Record (EOR) comes in.

An EOR can act as your legal employer in Croatia, even if the company you work for is based elsewhere. This means the EOR can sponsor your work permit application. They handle the necessary steps, like the labor market test and dealing with local authorities.

Here are the practical routes for different types of workers:

• Full-Time Employees: This is the most common path. A company or an EOR with a registered entity in Croatia can sponsor your stay and work permit. These permits are usually valid for up to one year and can be renewed.
• Highly-Skilled Workers: If you are a highly qualified professional, you might be eligible for an EU Blue Card. This is a special permit valid for two years, offering a more stable option.
• Digital Nomads: Croatia offers a temporary residence permit for remote workers whose employer is not based in Croatia. This permit is for up to one year.
• Independent Contractors: This is a different path. Contractors cannot be sponsored for a standard work permit and must register themselves through a separate process.

An EOR cannot sponsor independent contractors for a work permit. The permit is always tied to a specific job and employer.

Business travel compliance

If you are visiting Croatia for short-term business, the rules are different. You likely will not need a work permit for activities like attending meetings, conferences, or negotiations.

For these short visits, a Schengen short-stay visa (Type C) is typically what you'll need. This visa allows you to stay in the Schengen Area, which includes Croatia, for up to 90 days within a 180-day period.

It is important to remember that this visa does not allow you to work. It is strictly for business-related travel. Always check the specific entry requirements for your nationality before you travel.