EOR and local Employment in Croatia

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Capital: Zagreb

Official language(s): Croatian.

EU member country: since July 1, 2013

Currency: Croatian Kuna (HRK). Croatia will adopt the euro on 01.01.2023.

Time zone: the standard time is Central European Time (CET; UTC+01:00).

Average gross1 salary in 2021 was 9.599HRK (ca. 1.280 EUR)

Gross salary is the amount on which pension, taxes and surcharges are calculated, and it is also called gross 1. This amount is the amount which is defined in Employment Agreement and it is visible at the top of the payroll, while gross 2 is with added health contribution cost. Gross 2 is the total cost of Employee for the Empoloyer.

Residence and work permit:

An application for a residence and work permit may be submitted by:

third-country national (see the part relating to where to apply for the approval of temporary stay); or
employer, with the local police department or station according to the place of intended residence or work of the third-country national or the seat of the employer; or
temporary employment agency.

A third-country national in the Republic of Croatia may work on the basis of a residence and work permit or a work registration certificate, unless provided otherwise by the Foreigners Act.

Here most frequently asked questions about regulations of Employment in Croatia:

Employment contracts of indefinite duration

Unless otherwise provided for by the Labour Act, an employment contract shall be a contract of indefinite duration.

Fixed-term employment contracts

Exceptionally, an employment contract may be concluded for a fixed term, for the
purpose of taking up an employment where the end of the employment is determined by
objective conditions such as reaching a specific date, completing a specific task, or the
occurrence of a specific event.

The cumulative duration of all successive fixed-term employment contracts,
including the first employment contract, may not exceed three consecutive years, unless
where it is necessary for the purpose of replacing a temporarily absent worker or where it is
on objective grounds allowed by law or a collective agreement.

Mandatory content of written employment contracts or a letter of engagement

The written employment contract must contain information concerning:
1) the identities of the parties and their residence and the registered place of business,
2) place of work; where there is no fixed or main place of work, a reference that the work
is performed at various places,
3) the title, nature or category of the work for which the worker is employed or a brief
specification or description of the work,
4) the date of commencement of employment,
5) in the case of a fixed-term employment contract, the expected duration thereof;
6) the duration of paid annual leave to which the worker is entitled or, where this cannot
be indicated when the contract is concluded or the letter of engagement is given, the
procedures for allocating and determining such annual leave;
7) the length of the periods of notice to be observed by the worker and the employer or,
where this cannot be indicated when the contract is concluded or the letter of
engagement is given, the method for determining the periods of notice;
8) the basic salary, the bonuses and the frequency of remuneration payment to which the
worker is entitled;
9) duration of a regular working day or week.

Temporary employment agency – Employer of record

The agency may perform the activity of assigning workers to the user
undertakings provided that it is established in accordance with specific provisions and
registered with the ministry responsible for labour affair.

The agency may conclude a temporary assignment contract of fixed or indefinite
duration with the worker.

The user undertaking may not use the work of the assigned worker for the
performance of the same works for an uninterrupted period exceeding three years unless it is
necessary for the purpose of replacing a temporarily absent worker or where it is allowed by
collective agreement on the grounds of some other objective reasons.
An interruption of less than two months shall not be regarded as the interruption
of the three-year period.

In relation to the assigned worker the client undertaking shall be regarded as the
employer within the meaning of the obligation of implementing the provisions of Labour Act and other laws and regulations governing the safety and health protection at work and a special protection of particular categories of workers.

Any damage to a third party caused by the assigned worker during his work at the
user undertaking or related thereto shall be indemnified by the user undertaking, who shall be regarded as the employer considering the recourse liability of the assigned worker.

Contracting and duration of probationary period

A probationary period may be agreed upon by the employment contract.
The length of the probationary period may not exceed six month.

Full-time work

Full-time work shall not exceed 40 hours a week.

Part-time work

Part-time work shall be any working time shorter than full-time work.
The worker shall not be allowed to work at several employers with a working time
exceeding forty hours a week.

When concluding a part-time employment contract, the worker shall inform the
employer about part-time employment contracts concluded with other employer or employers

Overtime work

In the case of force majeure, an extraordinary increase in the scope of work and in
other similar cases of a pressing need, the worker shall, at the employer’s written request,
work longer than the full-time or part-time working hours (overtime work).

Break

Unless otherwise provided for by specific provisions, the worker who works at
least 6 hours a day shall be entitled to a daily period of rest (a break) of minimum 30 minutes.

Duration of annual leave

The worker shall be entitled to a annual leave of at least four weeks in each
calendar year, and the minor and a worker engaged in works involving exposure to harmful
effects in spite of the implementation of health and safety at work protection measures shall
be entitled to at least five weeks of annual leave.

National holidays and non-working days stipulated by law, periods of temporary
incapacity for work assessed by competent physician and days of paid leave shall not be
counted in the period of annual leave.

Remuneration during annual leave

During annual leave the worker shall be entitled to remuneration in the amount
defined by collective agreement, working regulations or employment contract, which may not
be less than his average monthly remuneration over the previous three months (counting in
any benefits in cash or in kind representing compensation for work).

Allowance in lieu of annual leave

In the case of termination of employment contract, the employer shall be obliged
to pay to a worker who did not use his annual leave an allowance in lieu of annual leave.

Paid leave

During the calendar year, the worker shall be entitled to be free from work with
remuneration (paid leave) for important personal purposes, and, in particular for those related to marriage, childbirth, serious illness or death of an immediate family member.
Unless otherwise provided for by collective agreement, working regulations or
employment contract, the worker shall be entitled to the leave for seven working days a year in total.

Unpaid leave

The employer may grant the worker unpaid leave, at the worker’s request.

Payment of remuneration and compensation

Unless otherwise provided for by the collective agreement or employment
contract, remuneration and compensation for the previous month shall be paid no later than
within the fifteenth day of the current month.

Entitlement to remuneration increase

The worker shall be entitled to an increased remuneration for arduous working
conditions, overtime and night work, and for work on Sundays, holidays, and on other days
that are not working days according to the law.

Form of employment contract termination agreement

The employment contract termination agreement shall be concluded in writing. Both the employer and the worker shall be allowed to terminate the employment contract.

The employer shall be allowed to terminate the employment contract for legitimate reasons by giving either the statutory notice or the notice stated in the contract of employment (regular notice of dismissal), in the following cases:
1) where the need to perform certain work ceases due to economic, technological or
organisational reasons (business conditioned cancellation),
2) where the worker is not able to fulfil his obligations from the employment relationship
due to his specific permanent characteristics or capacities (dismissal on personal
grounds), or
3) the worker violates his obligations from the employment relationship (dismissal due to
the worker’s misconduct), or
4) the workers did not satisfy during probationary period (dismissal due to incompetence
during probationary period).

Extraordinary notice of termination

Both the employer and the worker shall have a just cause to terminate the
employment contracts of indefinite duration or fixed-term employment contracts without
observing the statutory notice or the notice stated in the contract (extraordinary notice of
termination) where the continuation of employment relationship is regarded as impossible due to a severe breach of obligations from the employment relationship or any other fact of
critical importance, and recognising all the circumstances or interests of both contracting
parties.
The employment contract may be subject to an extraordinary notice of termination
solely within 15 days of the date when the party concerned gained knowledge of the fact
constituting the grounds for extraordinary notice of termination.
A party to the employment contract that gives an extraordinary notice of termination shall have right to claim indemnity for the damage caused by the breach of the obligations from the employment contract.

Period of notice

The notice shall begin as on the date of notice of termination of the employment contract. The notice shall be suspended during pregnancy, maternity, parental or adoption
leave, half-time work, part-time work due to intensive childcare, leave of pregnant or
breastfeeding worker, and during leave or part-time work due to having to take care of a child with severe developmental disabilities, under specific provisions, as well as in the case of
temporary incapacity for work during treatment or recovery from injury at work or an
occupational disease, and during service in national defence forces.

Minimum notice period

In case of regular notice of dismissal, the notice period shall be a minimum of:
1) two weeks, for less than one year of tenure with the same employer,
2) one month, for one year of tenure with the same employer,
3) one month and two weeks, for two years of tenure with the same employer,
4) two months, for five years of tenure with the same employer,
5) two months and two weeks, for ten years of tenure with the same employer,
6) three months, for twenty years of tenure with the same employer.

Severance pay

When the employer dismisses the worker following a two-year tenure, and unless
dismissal is given due to the worker’s misconduct, the worker shall be entitled to severance
pay in an amount determined on the basis of the worker’s tenure with that employer.
(2) Severance pay for each year of tenure with the that employer must not be agreed
upon or determined in an amount lower than one-third of the average monthly salary earned
by the worker in a period of three months prior to the termination of the employment contract
(3) Unless otherwise provided for by the law, collective agreement, working

regulations or employment contract, the aggregate amount of severance pay referred to in
paragraph 2 of this Article may not exceed six average monthly salaries earned by the worker
in a period of three months preceding the termination of the employment contract.

Penal provisions

There are 3 categories: