On the first day of 2024, a new calculation of tax-free allowances and receipts will begin.
Amendments to the Income Tax Ordinance (Order Nov., No. 143/23) amended, among other things, the amounts from Art. 7 of the Ordinance (rewards, fees and other material rights that employers pay to their workers) in such a way that all amounts are increased.
In this way, employers will be able to pay all workers a special reward, i.e. Christmas bonus and annual vacation allowance in the maximum amount of 700 euros per year, which is 36.38 euros more than the current 663.62 euros.
The reward for work results will increase from 995.43 euros to 1,120 euros from next year, which is a jump of 124.57 euros.
Furthermore, the monetary flat-rate award for the costs of food for workers currently amounts to a maximum of 796.44 euros, and from next year it will increase to 1,200 euros, which is 403.56 euros more.
Thus, in these three categories of tax-free receipts, the maximum annual tax-free amount that could be paid to workers so far was EUR 2,455.49, and from January 1, 2024, it will increase by EUR 564.51, to EUR 3,020.
Apart from these three, perhaps the most important non-taxable categories, non-taxable expenses will also increase in some other categories.
Thus, for example, the fee for using a private car for official purposes will rise to 0.50 euros per kilometer traveled from January 1, 2024, which is 25 percent more than the current 0.40 euros.
Per diems for official trips in the country are also increasing, and from next year they will be tax-free up to 30 euros, compared to the current 26.55 euros.
Support for the worker due to disability, support for death in the immediate family, support for long-term sick leave and support for the child of a deceased worker are also increasing.
Starting next year, up to 560 euros in each of the categories will be paid tax-free on behalf of these grants.
Among other things, the non-taxable amount of severance pay for workers on retirement is also increasing, from the current maximum of 1,327.24 euros to 1,400 euros starting next year.
The possible non-taxable receipts of workers for completed work experience are also changing.
The award for 10 years will increase from the current 199.09 euros to 280 euros, for 15 years from 265.45 to 336 euros, for 20 years from 331.81 to 392 euros, while for 25 years of service, workers will receive from next year be able to pay tax-free up to 448 euros, compared to the current 398.17 euros. Furthermore, tax-free awards for those who have reached the age of 30 increase from 464.53 to 504 euros, for 35 years from 530.90 to a maximum of 560 euros, and for 40 years and every subsequent five years from 663.62 to 672 euros.
All the mentioned changes will increase the income of workers.
The Ministry of Finance stated that HRK 12 billion was paid last year based on the above-mentioned receipts. This certainly contributed to a greater growth in the total income of employees than is shown by the data on average salaries.
According to the new Ordinance, the employer has the option, if he decides to do so, to pay tax-free allowances up to a maximum of 250 euros per month to every worker in Croatia.
Of course, the only question now is which of the mentioned options and in what amount the employer will use in order to additionally reward his employees.
