Hiring guide in Croatia

What you should know about hiring in Croatia?

Legal framework

Types of employment contracts

There are two main types of employment contracts, indefinite-term and fixed-term contracts. The indefinite-term contract is the most common form of employment contract in Croatia. 

An indefinite-term contract is one where the duration of the employment relationship isn’t specified. On the other hand, a fixed-term contract establishes an employment relationship for a specified period. These contracts must clearly state the reason for termination in advance and can last a maximum of 3 years.

In addition, there are consecutive contracts which refer to employment agreements where there is no break between successive contracts or where contracts are concluded with intervals of not more than 3 months between them.

Content of an employment contract

The employment contract is called “ugovor o radu” in Croatian, which translates as employment contract or contract on work. Below, we’ll dive into the information the employment contract must contain.

Firstly, it should clearly state the names and addresses of both parties involved in the contract. Additionally, it must specify the location of the workplace or indicate if the work will be performed at multiple locations. The start date of the employment is also an important detail, especially for fixed-term contracts where the duration of employment is specified.

Other essential information that must be included is annual leave, along with how it is calculated. The contract should also specify the notice periods required for termination and provide comprehensive details about the salary, including any supplements, and the frequency of payment. Lastly, a clear outline of the regular working hours or the weekly duration of work expected from the employee needs to be included.

Download a free Croatian employment contract template.

Oral, written or electronic employment contracts

According to Croatian labour rules, employers must create a written employment contract before the employee starts working. This contract can be bilingual, in either Croatian or English. If the contract isn’t in written form, the employer must provide written confirmation. For electronic contracts, a qualified electronic signature (“QES”) is equivalent to signing by hand on paper.

Probationary period

The probationary period should generally last no longer than 6 months. However, it may be extended if the worker is temporarily absent. This could be due to reasons such as being unable to work temporarily, taking maternity or parental leave or using paid leave.

Working hours

There are three main types of working arrangements: full-time, part-time, and part-time roles, where worker protection from harmful influences isn’t possible even with safety measures. 

Full-time work involves up to 40 hours per week. On the other hand, part-time work means fewer hours than full-time. When entering into a part-time contract, the worker must inform the employer about any other part-time contracts they have with other employers.

Breaks and night work

Every employee who works for at least 6 hours per day has the right to a daily 30-minute break. This break is included in the daily working time and is paid. 

Night workers must not work more than 8 hours during the night within a 24-hour period, which is defined as between 10 PM and 6 AM. In agriculture, night work is considered between 10 PM and 5 AM, but this can vary based on other laws, regulations, agreements, or collective agreements.

Annual leave

Employees are entitled to four weeks (20 days) of paid vacation each year after working for 6 months. This vacation time must be used by June 30th of the following year and cannot be carried over beyond that date.

Holidays

In Croatia, employees are entitled to 14 paid national holidays per year. If a worker has to work on a national holiday or an official non-working day, according to Croatian labour laws, they may receive extra annual leave as compensation.

Salary

The minimum wage in Croatia for 2024 is €840 gross, and the minimum net salary is approximately €677.

Employers who hire young people under 30 on indefinite contracts get reduced contributions for up to 5 years. This includes a lower pension insurance contribution rate of either 20% or 15% (for insured pension insurance based on individual capitalised savings) and a contribution rate of 5% for pension insurance based on individual capitalised savings.

Moreover, workers aged up to 25 are fully exempt from income tax. Workers aged 26 to 30 receive a 50% reduction in income tax for earnings up to €47,780.28 annually.

To calculate the salary and taxes in Croatia, click here.

Sick leave

An employee can take up to 42 days of sick leave per year, and they will be paid 70% of their regular wage during this time. If the sick leave lasts longer than 42 days, Croatia’s health insurance fund will reimburse the employer for these additional days.

Parental and maternity leave

In Croatia, women are entitled to maternity leave starting 28 days before their due date, and this can be extended to 45 days if recommended by a medical evaluation. After giving birth, there is a maternity leave policy that guarantees 70 days of full pay to the mother.

Following the maternity leave, mothers have the option to take an additional 70 days of unpaid leave or to split this time with their partners as parental leave. Parental leave is a right granted to both employed and self-employed parents. 

The duration of parental leave varies based on the number of children. For the first and second child, parents are entitled to 8 months of parental leave per child. For twins, the third child, and each subsequent child, parents are entitled to 30 months of parental leave per child.

Methods of employment termination

There are various ways to terminate an employment contract in Croatia. The contract may end due to the death of the worker, the death of the employer if they are an individual or the cessation of a trading business. 

In addition, workers who reach 65 years of age and have 15 years of pensionable service may conclude their employment unless both parties agree otherwise. Termination can also occur by mutual agreement between the worker and employer or upon notification to the employer of a disability pension due to complete work incapacity. Lastly, dismissal or a court decision can lead to contract termination according to the relevant laws and regulations.

Ordinary dismissal by employer

Employers can end an employment contract by giving notice, known as ordinary dismissal when there’s a valid reason. This could be due to business-related reasons like economic changes, personal issues with the worker, misconduct, or unsatisfactory performance during a probationary period.

Notice period and challenging the dismissal

In Croatia, the notice period for regular dismissals depends on how long the worker has been working for the same employer. For example, if someone has worked continuously for less than a year, the notice period is two weeks. 

After one year, it becomes one month, and it gradually increases with years of service: one month and two weeks for two years, two months for five years, two months and two weeks for ten years, and three months for twenty years.

For employees with twenty years of service, the notice period extends by two weeks at age fifty and by one month at age fifty-five.

Rights and obligations of unemployed individuals

Unemployed individuals must actively seek work and enhance their job prospects by attending counselling sessions and creating job plans. The Labour Market Act provides financial assistance for job-related activities, including support for travel and relocation expenses, pension eligibility under certain conditions, and access to unemployment benefits.

Severance pay

Severance pay is calculated based on how long someone has worked for their employer. It must be at least one-third of their average monthly salary from the three months before termination for each year of service.

Prohibition of competition

The employee isn’t allowed to start a business similar to the employer’s without permission. If the employee breaks this rule, the employer can ask for compensation for any harm caused or end the employment and ask the worker to give back money earned from such work.

The legal rule against competition applies even if it’s not in the contract. The employer and employee can also agree that after the contract ends, the worker won’t work for a competitor or start a similar business (contractual prohibition of competition).

Remote working policy

Employees who work remotely for more than seven days a month can get reimbursed for work-related expenses. The employer may also visit the employee’s home or other location for equipment maintenance and supervision if it’s agreed upon in the contract.

Moreover, Croatian law supports the right to disconnect, which means employers should avoid contacting employees outside of working hours unless it’s urgent.

Health and safety at home

Employers must ensure workplace safety and provide ergonomic workstations. They should also educate employees about health and safety, especially related to computer use.

Additionally, employers are required to offer and pay for eye exams before hiring and every two years afterwards. Activities away from screens, frequent breaks, and exercises to reduce eye strain should also be suggested.

What are the advantages of hiring employees from Croatia vs other countries?

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 be advantageous for 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.

Why use Native Teams for hiring in Croatia?

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• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.