How to Hire and Pay Employees in Croatia: A Step-by-Step Guide for Global Teams

You’re looking at Croatia. Smart choice. The talent is skilled, the location is strategic, and the business environment is steadily opening up to global employers. But once you start figuring out how to actually hire and pay someone there, things get complicated fast.

Employment contracts need to follow specific local rules. Payroll involves a handful of agencies you’ve probably never heard of. And if you skip a step, you could face delays, fines, or worse.

This guide gives you a simple, straight-talking roadmap. It’s designed for growing companies looking to hire in Croatia without getting lost in legal jargon or red tape. Let’s break it down.

Step-by-step process to hire employees in Croatia

Hiring in Croatia isn’t something you can improvise. The process is clear, but it’s strict. Here’s how to do it right from day one:

1. Know the legal basics

Every employment relationship in Croatia is based on the Labor Act, and yes, that includes written contracts. If you’re hiring someone from outside the EU or EEA, they’ll need both a work and residence permit—here’s how that works.

Fixed-term and permanent contracts are both legal, but short-term deals come with limits. You typically can’t renew them beyond three years unless the contract terms meet specific exceptions.

2. Write up a legally sound contract

You’ll need to put everything in writing before your new hire starts. Include the essentials:

• Job title and duties
• Working hours and location
• Gross salary (net is helpful but not required)
• Contract type and duration
• Probation period (optional)
• Leave entitlements

EU contract templates can help as a starting point, but local legal review is a must.

3. Register your employee with the proper authorities

You’re required to register each new hire before their first day. That means submitting paperwork to:

• The Tax Administration (Porezna uprava)
• The Health Insurance Fund (HZZO)
• The Pension Insurance Institute (HZMO)

Missing this deadline? That’s one of the most common compliance issues foreign employers face.

4. Prep the onboarding paperwork

Once your employee is official, you’ll need to hand over some documents:

• Registration proof
• Health and safety acknowledgment
• Payroll and tax ID info
• Company policies or employee handbook (if available)

Getting it right up front saves you time and shows your new hire they’re in good hands.

Croatia payroll and compensation essentials

Payroll in Croatia might feel familiar if you’ve hired in the EU before, but it still has its quirks. Let’s walk through what you need to know.

1. Set the right salary

As of 2025, the minimum gross wage is EUR 840 (~US$870) per month. But the average salary in urban areas (especially in tech and professional services) is often much higher.

Croatian salaries are usually agreed to and referenced in gross terms. You’re responsible for calculating and paying all the deductions, and your employee will care most about the net pay they take home.

2. Understand the taxes and contributions

Croatia uses a progressive tax system:

• 20% on income up to EUR 50,400 (~US$52,400) per year
• 30% on income above that

Then come the social contributions:

• Employer pays. 16.5% (primarily pension)
• Employee pays. 20% (pension, health, unemployment)

You’ll need to report and submit everything monthly using the JOPPD payroll form.

3. Follow the monthly pay cycle

Payroll typically runs once a month. Here’s what your timeline might look like:

• 1st–5th. Collect hours worked and any leave
• 6th–10th. Run payroll and process deductions
• 15th. Pay employees and submit contributions
• End of month. File JOPPD

Payslips are mandatory. You can send them electronically, but you have to keep all records securely for at least six years.

Essential employee benefits and leave in Croatia

Employee benefits in Croatia come in two buckets: what the law requires, and what companies offer to stand out.

1. Statutory leave

Here’s what every employee is entitled to:

• Annual paid leave. 20 working days of annual paid leave (minimum)
• Sick leave. Paid by you for the first 42 days, then by the state
• Maternity leave. Up to one year, partially paid by the state
• Paternity leave. 10 working days
• Parental leave. Up to the child’s eighth birthday, shared by parents

And don’t forget public holidays—there are more than a dozen each year.

2. Health insurance and severance pay

• Health coverage is public and mandatory. Your contributions fund it.
• Severance pay applies for terminations not related to misconduct—typically one-third of a month’s pay per year of service.

Some companies offer extras like travel stipends or food allowances. They’re not required, but they’re becoming more common.

Tips for global companies: Remote talent, EORs, and hiring compliance

Croatia’s labor laws are strict, but you’ve got options.

1. Hiring remote workers in Croatia

If your new team member is already living in Croatia, you can hire them as an employee or contractor. Just be careful. If they work full-time, report to a manager, and follow your hours, they’re probably an employee, legally speaking.

Hiring non-EU nationals adds another layer because you’ll need a Croatian entity to sponsor their visa and work permit.

2. Use an Employer of Record (EOR)

No entity in Croatia? No problem. An Employer of Record (EOR) acts as the legal employer. You manage the work; they handle the admin.

That means:

• Hiring and onboarding
• Local payroll and tax filings
• Benefits administration
• Labor law compliance

It’s fast, flexible, and scalable—especially if you’re hiring in more than one country. If you’re hiring beyond Croatia, you may also want to explore global hiring in other countries.

Tips and resources for a successful application

Croatian bureaucracy can be heavy on paperwork, but there’s a rhythm to it once you know the process. Here’s how to stay organized:

• Use official sites like the Croatian Ministry of Labor for up-to-date rules
• Keep a digital folder of employee documents, contracts, and registrations
• When in doubt, ask a local tax advisor or legal expert—they’ll save you time and frustration

Why EOR support makes a difference

EORs do more than just handle compliance. They give you peace of mind. You get:

• Local guidance from day one
• Help navigating contracts, payroll, and registration
• Reduced admin burden so you can focus on your team

Global hiring in Croatia made simple

Hiring in Croatia can feel like a maze. But with the right guidance from the right partner, the process will be surprisingly straightforward and fast.

You now know how to:

• Create a compliant employment contract
• Register your employee with Croatian authorities
• Run payroll, submit taxes, and issue payslips
• Provide legally required benefits

Pebl can help you go even further. Our EOR services help you hire, pay, and manage employees in 185+ countries, including Croatia. We handle the local legwork—payroll, compliance, taxes—so you can focus on scaling your team.

No surprise fees. No missed steps. Just smart, compliant hiring.

Let’s talk about how we can help you build your global team.

This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.

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