International employers from all corners of the world hire Croatians for their proficiency in tech, tourism, construction, and more. It also helps that labor costs are on the more modest side and that the country is very welcoming to foreign companies.

So, if you want to hire Croatian workers to drive your business objectives, save money on payroll, or fill talent gaps, chances are you’re on the right track. Still, it’s critical not to act haphazardly – labor laws in the country are relatively strict, and full adherence is essential to the well-being of your business and future Croatian employees.

Read on for the information you need to fully prepare. We’ll touch on mandatory and supplementary employee benefits in Croatia and pertinent labor laws in the country.

Croatian Labor Law

In Croatia, the employee/employer relationship is governed by The Labour Act of Croatia. This lengthy piece of legislation covers topics and situations like working hours, social benefits, termination pay, leave entitlements, and more. If you want to learn about your obligations as an employer, this is the main law to familiarize yourself with.

Still, there are other laws that hold significance for international employers hiring in Croatia:

And there’s more where that came from. Regardless, we encourage you to start with the main labour act and use your judgment from there. If you find yourself struggling to understand any of the legalese, call an international business lawyer and ask for some clarification.

Mandatory Employee Benefits in Croatia

When building an employee benefits plan, the very first thing to do is get your mandatory benefits all in a row. But it’s impossible to do so if you’re unfamiliar with employer obligations in the country. Here, we’ll get into the mandatory employee benefits in Croatia.

Working Hours and Overtime Pay

Per the labour law, if you hire a Croatian employee for a full-time position, the maximum working hour limit is 40 hours per week or 8 hours per day over 5 days. Hours worked over these limits would be considered overtime. They should be paid at 150% of the worker’s regular wage. If there’s a collective agreement in place, the terms of that agreement should be used.

Paid Annual Leave

If a worker has been with their employer for at least 6 months, they are entitled to paid annual leave. They get 4 weeks of leave every year. If you intend to give any employee more paid annual leave than this, it must be noted in a collective agreement or in the employment contract.

Newer employees who have not yet reached their 6-month work anniversary get paid annual leave too. But it’s accrued at 1/12 of the annual leave for each completed month of work.

Paid Sick Leave

When an employee falls ill, they are entitled to time off to recover when ill or injured, and they should receive monetary compensation throughout their leave.

The table below shows how paid sick leave works in Croatia:

Leave Day(s)Entitlement
First 42 days of leaveEmployer pays the employee’s salary during the first 42 days of sickness.
Starting day 43 of leaveEmployees meeting social security requirements receive 70% of their normal pay rate through the Croatian Health Insurance Fund.

Social insurance benefits stop when the worker is feeling better or after 18 months (whichever is sooner).

There’s much more to sick leave than we have space to cover here. Go to this government health insurance resource for more information.

Maternity Leave

Maternity leave is very generous for Croatians. Female employees should begin taking their leave from the 28th to 45th day pre-birth to when the baby reaches 70 days old. If the mother dies in childbirth, fathers can use this leave as well. There’s another type of maternity leave that the employee can request – it lasts until the baby is 6 months old.

As for the financial side of things – if the employee is eligible for the maternity leave benefit through social security, they can receive 100% of the benefits outlined in health insurance regulations. You can read more about maternity leave in this government resource.

There is no compulsory paternity leave in Croatia.

Parental Leave

Parental leave isn’t the same as maternity or paternity leave. It’s an additional benefit that employers should make available to their workers. It kicks in after the child turns 6 months old and is in place to ensure that parents can care for their little ones and keep their jobs. The leave must be taken before the child turns 8 years old.

The general leave duration is 8 months (each parent gets 4 months of leave), and it’s paid. The payment amount depends on how much money they were making prior to the leave, but the compensation ceiling is 40% of the salary.

Social Security Contributions

Employers are required to contribute to social security for their Croatian employees. If you were to hire workers from this country, you’d have to do the following:

  • Register the employee with the necessary social security authorities.
  • Withhold funds from employees’ paychecks and submit them to the appropriate organization(s).
  • Make your own separate contributions (16.5% of the employee’s gross salary) toward the social security insurance fund.

Here’s what you need to know about the social security accounts employees get:

  • Health Insurance: Covers routine and acute health-related services. Register your employees with the Croatian Health Insurance Fund (also called HZZO), withhold employee contributions, and contribute a percentage of the employee’s gross salary.
  • Pension Insurance: Provides monetary benefits for those who are of advanced age, families of deceased workers, and more. In Croatia, there are three pillars in the pension system, and the first (old-age) and second (capitalised pension scheme) are funded by the employer. You can find out more about pension insurance on this Croatian government resource.
  • Maternity and Paternal Leave: Ensures that mothers, fathers, and certain loved ones can care for their newborns and growing children. This topic is addressed earlier in the article but is partially covered by social security.
  • Unemployment Insurance: Should an employee find themselves out of a job, they may be eligible for unemployment insurancethrough social security.

Social security also includes work-related accidents and diseases, disability, social assistance, and more. Read about it in this European Commission document on social insurance rights.

Public Holiday Pay

Employees in Croatia do not work on public and religious holidays:

  • January 1 – New Year’s Day
  • January 6 – Epiphany
  • Easter – Date varies every year
  • Easter Monday – Date varies every year
  • May 1 – International Workers’ Day
  • May 30 – Statehood Day
  • Corpus Christi – Date varies every year
  • June 22 – Anti-Fascist Struggle Day
  • August 5 – Victory and Homeland Thanksgiving Day and the Day of Croatian Defenders
  • August 15 – Assumption of Mary
  • November 1 – All Saints’ Day
  • November 18 – Remembrance Day for the victims of the Homeland War and the victims of Vukovar and Škabrnja
  • December 25 – Christmas
  • December 26 – St. Stephen’s Day

If an employee is made to work on any of these days, they should receive special holiday pay. The amount of extra pay should be outlined in the employee’s contract or collective agreements.

Severance Pay

Severance pay is required for qualifying employees who are terminated. Depending on the situation, employers have to submit a lump sum payment that coincides with the worker’s length of service. The actual amount will have been laid out in labor laws, collective agreements, or the employment contract.

Supplementary Employee Benefits in Croatia

Supplementary employee benefits can help your business stand out against competitors looking for candidates in the same pool. Here are some non-mandatory benefits to consider offering to your future workers:

  • Extra time off for leave
  • Free or reduced meals on-site
  • An allowance for home office equipment
  • Vision and dental insurance coverage
  • A free or reduced-cost life insurance plan
  • Transportation allowance for travel-related positions
  • Educational enrichment opportunities available for free
  • Childcare allowance for working parents

Take your time to scope out the best possible supplementary employee benefits for your specific workers. What works for one company won’t necessarily work for another. Think about your desired worker demographic and any gaps you can fill for them. These benefits will make the biggest possible impact.

So, there you have it – the basics of employee benefits in Croatia. We hope you found all the information you were looking for in this employee benefits guide, and we wish you the best in pursuit of top-quality Croatian talent.