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If you are considering hiring in Croatia, you need to understand Croatian labour laws, which outline the rights and responsibilities of employers and employees. Key areas to consider include the minimum wage, working hours, vacation time, and termination of employment.
In addition, Croatian law requires employment contracts to detail the worker's responsibilities, compensation, and employment duration in writing. Therefore, every employment agreement deserves a thorough review before signing.
In summary, companies can benefit greatly from tapping into Croatia’s competent and low-cost labour. However, you should familiarise yourself with local laws and customs to ensure a suitable hiring process in a foreign country.
In Croatia, there’s a strong emphasis on obtaining technical skills through education. As a result, many Croatian workers have university degrees and are proficient in multiple languages, making them well-suited for a variety of roles across different industries.
Croatia has a lower cost of living than many other European countries, which means wages are generally lower. This can make hiring in Croatia a cost-effective option for companies looking to save on labour costs.
Croatian workers are known for their strong work ethic and dedication to their jobs. They are also highly adaptable, making them well-suited for dynamic and fast-paced work environments.
Overall, hiring remote workers from Croatia can be smart for companies looking to tap into a skilled, cost-effective, and dedicated workforce in a strategic location.
Native Teams’ Employer of Record services help you hire and pay your team through an owned infrastructure in Croatia. We handle everything from legal employment to ensuring your team is paid and managed compliantly and with care, without any third parties involved.
Hire your first Croatian employee with Native Teams.
Employers must comply with the following laws and regulations to ensure a fully compliant employment process.
Employment relationships in Croatia are governed by the Labour Act, which establishes the main rights and obligations of employers and employees and is harmonised with EU labour legislation.
The Labour Act allows employers, employees, works councils, trade unions, and employers' associations to negotiate employment conditions that go beyond statutory requirements. This principle, known as freedom of contracting, gives parties flexibility when agreeing on working conditions.
Collective agreements may also establish conditions that are less favourable than those prescribed by the Labour Act, but only where expressly permitted by law.
Where employment rights differ between legislation, employment contracts, collective agreements, or internal rules, the provision most favourable to the employee generally applies, unless the Labour Act or another law specifies otherwise.
Employers with more than 20 employees must establish and publish internal employment rules covering matters such as salaries and work organisation, unless these matters are already regulated by a collective agreement.
In Croatia, employment contracts are generally concluded for either an indefinite or fixed term, with indefinite-term contracts being the standard form of employment.
Indefinite-term contracts
An indefinite-term contract has no predetermined end date and remains in effect until terminated in accordance with applicable employment laws.
If an employment contract does not specify its duration, it is automatically considered an indefinite-term contract.
Fixed-term contracts
Fixed-term contracts are permitted only in exceptional circumstances where there is an objective reason for temporary employment. The reason must justify why the employment relationship is expected to end at a predetermined point.
Fixed-term employment is subject to the following restrictions:
Employers should carefully monitor the duration and renewal of fixed-term contracts to ensure compliance with these restrictions.
In Croatia, an employment contract, known as an ugovor o radu, must clearly define the terms and conditions of employment, including the employee's role, remuneration, working hours, and employment rights.
Each employment contract must include the following information:
Download a free Croatian employment contract template.
In Croatia, employment contracts must be concluded in writing before the employee starts work.
However, failure to formalise an employment contract in writing does not automatically invalidate the employment relationship. The contract remains legally valid even if the required written documentation has not been completed.
In Croatia, employers may include a probationary period in an employment contract to assess an employee's suitability for the role. The probationary period generally cannot exceed six months.
However, the probationary period may be extended if the employee is temporarily absent from work for certain reasons, including:
Where a probationary period has been agreed, the minimum notice period for termination is seven days.
In Croatia, standard full-time working hours cannot exceed 40 hours per week. If working hours are not specified by law, a collective agreement, an agreement between the works council and employer, internal regulations, or the employment contract, the standard working week is considered to be 40 hours.
Croatian labour law distinguishes between the following working arrangements:
Working hours may be distributed equally or unequally across days, weeks, or months, depending on the applicable working arrangement.
The working schedule must be established through legislation, a collective agreement, an agreement between the works council and employer, internal employment rules, an employment contract, or a written decision by the employer.
In Croatia, the standard working day is generally eight hours. Employees who work at least six hours per day are entitled to a 30-minute paid break, which counts towards their regular working hours.
Employees are also entitled to minimum daily and weekly rest periods:
An employee is considered a night worker if they work at least three hours during the night as part of their regular schedule. This classification also applies to employees who perform at least one-third of their working hours at night over a consecutive 12-month period.
In Croatia, employees are entitled to a minimum of four weeks of paid annual leave per calendar year, equivalent to 20 working days for employees working a five-day week.
Employees entering employment for the first time, or returning to work after a break of more than eight days between employment relationships, become entitled to full annual leave after six months of continuous employment with the same employer.
Employees who have not yet completed the required six months are entitled to proportional annual leave, calculated at one-twelfth of their annual entitlement for each month of employment.
According to the supplied guidance, unused annual leave must be taken by 30 June of the following calendar year.
In Croatia, all employees are entitled to remuneration for their work, with equal pay rights for women and men.
Employers must specify the employee's gross salary in the employment contract and ensure that it meets the statutory minimum wage requirements.
The Croatian Government sets the minimum wage annually through a special decree. The applicable rate covers the calendar year from January to December. For employees working part-time, the minimum wage is adjusted proportionally to their contracted working hours.
Employers are responsible for calculating, deducting and paying the applicable income tax, surtax and salary contributions on behalf of their employees.
Salaries must be paid by the 15th of each month for work performed in the previous month. Employers who fail to meet this deadline may face financial penalties.
Employees who work on Sundays are entitled to a salary supplement of at least 50% for the hours worked.
To calculate the salary and taxes in Croatia, click here.
In Croatia, employees are entitled to sick leave when they are temporarily unable to work due to illness, injury or other qualifying circumstances.
The start date and duration of sick leave are determined by the employee's primary healthcare physician, who assesses their temporary incapacity for work.
To receive salary compensation during sick leave, employees must obtain a medical report confirming their temporary incapacity for work from their primary healthcare physician.
Sick leave compensation is calculated based on the employee's average salary over the six months preceding the illness or injury. This calculation applies regardless of whether the compensation is paid by the employer or another responsible institution.
In Croatia, maternity and parental leave are available to employed and self-employed parents who have valid mandatory health insurance coverage under the Croatian Health Insurance Fund.
Maternity leave
Pregnant employees and self-employed women must begin maternity leave 28 days before the expected date of birth, although they may start as early as 45 days before the due date.
Maternity leave continues until the child reaches six months of age and is divided into two periods:
Parental leave
After the child reaches six months of age, employed and self-employed parents become entitled to parental leave, which can be taken until the child turns eight years old.
Parental leave is an individual right of both parents, with the total entitlement depending on the number of children:
Both parents have the right to exercise their parental leave entitlement in accordance with the applicable regulations.
In Croatia, employment contracts may end for several reasons, including mutual agreement, dismissal, expiry of a fixed-term contract, retirement-related conditions, or a court decision.
Under Croatian labour law, an employment relationship may terminate in the following circumstances:
Employment contracts may also be terminated through ordinary or extraordinary dismissal.
Ordinary dismissal may be initiated by either party. Employers must have a valid reason for terminating an employment contract, and employees have the right to challenge the dismissal in court.
Employees may resign through ordinary dismissal without providing a reason, provided they comply with the applicable statutory or contractual notice period.
In Croatia, employers may terminate an employment contract through ordinary dismissal if they have a justified reason and comply with the applicable notice period.
Ordinary dismissal is permitted on the following grounds:
For dismissals based on business-related or personal reasons, the employer must first consider whether the employee can be reassigned to another suitable position. Termination is permitted only if reassignment is not possible.
Employers must issue the dismissal in writing, provide an explanation of the reasons for termination, and deliver the dismissal notice to the affected employee.
In Croatia, the notice period for ordinary dismissal depends on the employee's length of service, age and reason for termination. The notice period begins on the day the written termination notice is delivered to the employee.
Employers may terminate an employment contract through ordinary dismissal if they have a justified reason, including business-related changes, personal circumstances affecting the employee's ability to perform their duties, misconduct or unsatisfactory performance during probation.
For dismissals based on business-related or personal reasons, employers must first consider whether the employee can be reassigned to another suitable position.
The statutory notice periods for employer-initiated ordinary dismissal are:
Additional notice requirements apply depending on the employee's age. Employees aged 50 or over are entitled to an additional two weeks, while those aged 55 or over are entitled to an additional month.
For dismissals resulting from employee misconduct, the applicable notice period is reduced by half. Employees aged 65 or over with at least 15 years of pensionable service are not entitled to a notice period.
During the notice period, employees are entitled to at least four hours of paid leave per week to look for new employment.
All dismissals must be issued in writing, include an explanation of the reasons for termination, and be delivered to the employee.
Employees who believe their dismissal is unjustified have the right to challenge its validity in court.
In Croatia, the rights and obligations of unemployed persons are regulated by the Labour Market Act, which establishes the requirements for accessing unemployment benefits and employment support services.
Unemployed individuals are expected to actively seek employment and take reasonable steps to improve their chances of finding work. Their main obligations include:
The Labour Market Act also provides several forms of financial assistance and support, subject to eligibility requirements. These include:
To claim unemployment benefits, individuals must register with the Croatian Employment Service and submit their application within the legally prescribed deadline.
In Croatia, employees whose employment contracts are terminated through ordinary dismissal are generally entitled to severance pay after at least two years of continuous employment with the same employer.
Severance pay is intended to provide financial support following termination, with the amount depending on the employee's length of service.
However, severance pay is not required in the following circumstances:
In Croatia, employees are subject to two types of non-compete restrictions: statutory prohibition of competition, which applies during employment, and contractual prohibition of competition, which may apply after employment ends.
Statutory prohibition of competition
During employment, employees cannot engage in business activities that compete with their employer, whether on their own behalf or for a third party, without the employer's approval.
This restriction applies automatically to all employment relationships, even if it is not expressly included in the employment contract.
If an employee breaches the restriction, the employer may claim compensation for damages or require the employee to transfer the earnings or related claims arising from the competing activity. The employer may also demand that the business transaction be treated as having been concluded on its behalf.
However, if the employer knew about the employee's competing activities when the employment relationship began and did not request that they stop, the employer is considered to have given permission for those activities.
Contractual prohibition of competition
Employers and employees may also agree to a non-compete restriction that applies for a specified period after employment ends.
Under such an agreement, the employee may be prohibited from working for a competing employer or conducting competing business activities on their own behalf or for a third party.
Unlike the statutory restriction, a post-employment non-compete restriction must be expressly agreed between the employer and employee.
In Croatia, employees can work outside their employer's premises either from an agreed location, such as their home, or through remote working arrangements, which allow them to choose where they perform their duties.
Employees working remotely are entitled to the same employment rights as on-site employees, including salary, daily and weekly rest periods, and annual leave.
Employers must reimburse work-related expenses when an employee works outside the employer's premises for more than seven working days in a calendar month.
Employers may also access an employee's home or other agreed working location to maintain equipment or inspect working conditions, provided that this right has been expressly agreed in the employment contract.
Employees may request temporary remote working arrangements in certain circumstances defined by law, including pregnancy or caring for a family member.
Employers must consider these requests and provide a reasoned response within 15 days.
In Croatia, the Labour Act distinguishes between remote work and work at a separate workplace. Both arrangements can be agreed between the employer and employee and included in the employment contract.
Remote work (rad na daljinu) is performed using information and communication technology, with employees free to choose their working location.
Work at a separate workplace (rad na izdvojenom mjestu rada) takes place at a specific location agreed between the employer and employee, such as the employee's home.
The two arrangements also differ in their contractual requirements. For work at a separate workplace, the employment contract must include provisions on work equipment and reimbursement of associated expenses if the arrangement exceeds seven working days in a calendar month. These provisions are optional for remote work.
Employees may also request to temporarily work from a separate workplace due to important personal circumstances, including illness, pregnancy, caring for a child under eight years old or looking after a sick family member.
Employers must consider these requests and provide written reasons if they reject them.
In Croatia, employers are responsible for ensuring safe and healthy working conditions, including for employees working from home. These obligations are regulated by the Labour Act and the Workplace Safety Act.
Employers must provide a safe working environment, arrange an ergonomic workstation as agreed with the employee, and offer appropriate health and safety training, particularly for employees working with computers.
Employees are also required to follow the applicable health and safety measures. Accidents occurring while working from home are considered workplace accidents.
Although working from home is generally considered low-risk, employers must still conduct a workplace risk assessment, which does not necessarily require an in-person inspection.
Additional requirements apply to employees who use a computer for more than four hours a day. Employers must assess potential risks to their visual, mental and physical health and take appropriate steps to minimise them.
Employers must also arrange and cover the cost of eye examinations:
To reduce the health risks associated with prolonged screen use, employers must educate employees about the importance of regular breaks and changing activities.
Where possible, employers should organise alternative tasks away from the screen. Otherwise, employees must be provided with breaks of at least five minutes and appropriate exercises to relieve eye strain.
In Croatia, intellectual property rights are governed by legislation designed to protect the interests of both employers and employees. Under the Copyright and Related Rights Act, copyright protection arises automatically when an original work is created.
The ownership of inventions developed during employment depends on the nature of the invention, the employee's duties and any applicable employment or collective bargaining agreements.
Under the Croatian Labour Act, inventions created by employees as part of their employment duties generally belong to the employer. The source also identifies a five-year period associated with these rights.
However, employees may retain ownership in certain circumstances, including when:
Employers and employees should therefore clearly define intellectual property ownership in their employment agreements, particularly where the role involves developing inventions or creating original works.
In Croatia, employee data protection is governed by the General Data Protection Regulation (GDPR), alongside the Croatian Act on the Implementation of the GDPR and relevant employment legislation.
Employers must ensure that employees' personal data is collected, processed and stored lawfully, fairly and transparently, and only for legitimate purposes.
Employee consent may be required where no other lawful basis for processing applies. However, employers may also process personal data when necessary to fulfil an employment contract or comply with a legal obligation.
Where consent is used, it must be specific, informed and freely given, and employees must be able to withdraw it at any time.
Under the GDPR, employers must follow several key data protection principles:
Hiring employees from Croatia can offer several advantages compared to hiring from other countries. Firstly, Croatia is a member of the European Union (EU), which can simplify hiring processes for employers based in other EU countries. This membership also ensures compliance with EU regulations and standards, which can benefit companies operating across multiple EU markets.
In addition, Croatia’s thriving tourism industry has cultivated a pool of talent with expertise in hospitality, tourism management, and related fields. This can be particularly advantageous for companies operating in the tourism, travel, and hospitality sectors.
The cultural similarities with other European countries, particularly those in Central and Eastern Europe, ensure a smooth integration of Croatian employees into multinational teams.
Native Teams helps you employ and pay your team in Croatia directly through owned entities and infrastructure.
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