Employment in Croatia is governed by the Labour Act (Zakon o radu), with parental rights set by the Maternity and Parental Benefits Act and collective agreements adding to the statutory minimums. Here is what employers need to know about leave, pay, tax, contributions and ending employment.
The Labour Act sets the minimum leave. Collective agreements, work rules and employment contracts often grant more, for example extra annual leave days for length of service. Maternity, paternity and parental leave are paid by the Croatian Health Insurance Fund (HZZO), not the employer.
Per calendar year, or 5 weeks for minors and hazardous work. New employees earn the full entitlement after 6 months; before that it accrues at one-twelfth per month.
28 days before the expected birth and 70 days after, followed by additional maternity leave until the child is 6 months old.
30 working days for twins or more. Taken in one block before the child is 6 months old, paid at 100% of the compensation base.
For the first and second child, usually 4 months per parent (2 months each are non-transferable). 30 months for twins and third and later children.
The employer pays sick pay for the first 42 days of each absence. From day 43 the HZZO takes over. Sick pay is at least 70% of the employee’s compensation base, and higher for work injuries and some other cases.
Set up each Croatian leave type in IceHrm with its own accrual, carry forward and approval rules, including the one-twelfth-per-month accrual for new starters and the 30 June carry-over deadline. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
The government sets the minimum wage each year, effective from 1 January. Collective agreements can set higher minimums for their sectors.
For full-time work from 1 January 2026. Paid pro rata for part-time employees.
Including overtime, total working time can’t exceed 50 hours a week.
Per employee, or up to 250 hours a year if a collective agreement allows it.
Overtime, night work, difficult working conditions and work on public holidays must be paid at an increased rate, set by the collective agreement, work rules or employment contract. Work on Sundays must be paid at least 50% extra for every hour.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so you can track overtime against the weekly and annual limits and pay the right premiums. Time & attendance →
Residents are taxed on worldwide income. Employment income is taxed at two progressive rates that each city or municipality chooses within a legal range, so the rate depends on where the employee lives. Employers withhold tax monthly, and the final liability is settled in the annual assessment.
| Annual taxable income | Lower rate range | Higher rate range |
|---|---|---|
| Up to €60,000 | 15% – 23% | – |
| Over €60,000 | – | 25% – 33% |
Croatia’s employer costs are relatively low: the employer pays health insurance on top of gross salary, while pension contributions are deducted from the employee’s gross salary.
On gross salary, with no upper cap.
15% first pillar and 5% second pillar, withheld from gross salary. Capped at a monthly base of €11,958 in 2026.
Employers with 20 or more employees must employ people with disabilities or pay a monthly fee for each missing position.
For gross monthly salaries up to €1,300, the base for the employee’s pension contributions is reduced, so low earners take home more. The employer’s health contribution is still calculated on the full gross salary.
Build Croatian pay the way you already structure it, with your own salary components, deductions and formula columns, such as a pension contribution or health insurance column. Want to know how well IceHrm handles payroll calculations for Croatia? Contact us or see Payroll →
An employer can only give ordinary notice for a justified reason set out in the Labour Act. When choosing whom to dismiss for business reasons, the employer must consider length of service, age and family maintenance obligations.
| Continuous service with the employer | Notice |
|---|---|
| Less than 1 year | 2 weeks |
| 1 year | 1 month |
| 2 years | 1 month and 2 weeks |
| 5 years | 2 months |
| 10 years | 2 months and 2 weeks |
| 20 years | 3 months |
Severance is due when the employer dismisses an employee after at least 2 years of continuous service, unless the dismissal is for misconduct or the employee is at least 65 with 15 years of pension insurance.
| Rule | Amount |
|---|---|
| Minimum per completed year of service | 1/3 of average monthly pay |
| Maximum total | 6 months’ average pay |
Final pay must include compensation for unused annual leave, calculated in proportion to the days not taken.
Croatia has 14 public holidays and non-working days, set by the Public Holidays Act. Work on a public holiday must be paid at an increased rate.
Leave groups give each office its own holiday calendar, so your Croatia team gets the right days off automatically alongside colleagues in other countries. Holiday calendars →
Employment contracts must be in writing. If there is no written contract, the employer must give the employee a written confirmation of the contract before work starts. Otherwise the employment is deemed to be indefinite.
A probation period is optional and can last up to 6 months. It can be extended in proportion to absences such as sick leave or parental leave. Fixed-term contracts are an exception: they need an objective reason stated in the contract, and at most 3 consecutive fixed-term contracts totalling no more than 3 years are allowed with the same employee. Fixed-term employees must get the same working conditions as comparable permanent staff.
Send contracts for e-signing, store them and insurance registrations on the employee’s record, and track onboarding with task lists so nothing is missed before day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Croatia, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Croatia? Talk to us.
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