The global talent pool is limitless. So, if you’re on the search for new team members, consider extending beyond your physical borders. Gain access to a bigger, more affordable talent pool of skilled professionals worldwide with fresh perspectives and valuable insights.
Croatia has a highly educated and skilled workforce with a strong focus on science, technology, engineering, and math (STEM) fields. If you’re looking to expand into the EU market and would benefit from multilingual employees - consider hiring from Croatia.
If you’re interested in hiring employees from Croatia, it’s key to understand how much it costs. This guide will break down everything you need to know.
Costs to Consider
There are a number of costs to keep in mind when hiring employees from Croatia. Some are legally mandated, while others are optional but frequently offered. We’ll also go over some fringe benefits that can help attract and retain top talent.
Mandatory Costs
- Salary
- Taxes and benefits
- Paid time off
- Overtime pay
- Severance pay
Optional and Frequently Offered Benefits
- Added Benefits
- Bonuses, discounts, and rewards
- Extended health plan
Optional Perks
- Coworking space
- Health and wellness benefits
Mandatory Costs of Hiring in Croatia
To start, you need to take the following costs into account - there’s no way around it. So make sure to budget for them to ensure you comply with local Croatian laws and regulations.
Salary
The national minimum wage in Croatia has been raised by 12.5% to €700 (EUR) per month, which equates to 784.73 USD.
The average monthly wage in Croatia in 2022 was €1,328, according to the Croatian Bureau of Labor Statistics. Based on exchange rates from April 2023, this works out to about 1,448 USD every month.
Taxes and contributions
Employers are required to pay 16.5% of an employee's gross salary towards social security contributions.
Paid leave
Employees in Croatia are entitled to the following types of paid leave from work.
Vacation: Employees in Croatia are entitled to a minimum of four weeks of paid vacation leave per year. This entitlement is based on a standard 40-hour workweek, so employees who work fewer hours per week may receive a proportional amount of vacation leave.
Sick leave: Employers are responsible for paying employees up to 42 days of sick time per year at a rate of 70% of their usual wage. Croatia's health insurance fund (HZZO) reimburses the employer for any costs incurred for sick leave over longer than 42 days.
Maternity Leave: Pregnant employees are entitled to 28 paid maternity leave days before the due date (which may increase to 45 days in exceptional situations, based on a medical evaluation). Following birth, they’re entitled to 70 days of paid maternity leave.
After 70 days, mothers have the option to either share their maternity leave with the father or continue their maternity leave alone until their child is six months old (although most employers do pay this as an additional bonus).
Paternity Leave: Regardless of their marital or familial status, fathers or second parents who meet the legal requirements are entitled to 10 working days of paid paternity leave for each child. When a working parent has twins or multiple children, the leave is extended to 15 working days. The 10 days of leave cannot be shared with another parent and must be used within six months of the adoption or birth of the child. Parents are eligible to receive their full income during this time from the Croatian government.
Parental Leave: Parents are entitled to parental leave following the first six months of a child's life, which is covered by maternity leave. Each parent may take 4 months for the first two children and 15 months for any additional children or twins, but only if the child is younger than 8 years old.
Public holidays: In total, there are 14 public holidays in Croatia. Weekend public holidays are typically ignored. Employees who must work on a holiday are entitled to overtime compensation, which is usually agreed in the contract or collective bargaining agreement.
Overtime Pay
All work performed in excess of the standard workweek must be compensated as overtime. The maximum amount of overtime per week is 10 hours or 180 hours per year. Up to 250 hours of overtime per year may be added through collective agreements. The rate for overtime pay that is specified in the employment contract or collective bargaining agreement is applied to all overtime hours.
Severance Pay
Employees with two or more years of service are eligible for severance pay at a rate equal to 33% of their regular monthly pay rate for each year of service, up to a maximum of six months of their income.
Optional Costs
Attracting in-demand talent in today’s job market isn’t easy. The ongoing labor shortage has companies locked in fierce competition around the world, making it increasingly important to level up. Consider implementing the following benefits to attract and retain top talent.
Benefits
Offering a solid benefits package shows job seekers and employees that you value your team. Many employers in Croatia offer private health insurance as a benefit to employees that provides additional coverage for medical expenses beyond what is covered by the public healthcare system. The type and extent of coverage offered by private health insurance plans may vary depending on the company and the specific plan.
An EOR, like Borderless, offers localized benefits packages that typically include the following:
- Medical Insurance
- Vision Insurance
- Dental Insurance
- Life Insurance
- Retirement Contributions
In addition to health insurance, it’s wise to add extra perks to your benefits package. Consider offering a health and wellness spending account, professional development opportunities, and monthly subscriptions. These are just a few attractive offerings that can help incentivize new hires.
Bonuses
Though not legally mandated, it's customary for employers in Croatia to offer employees bonuses around Christmas and Easter time, typically based on performance. The amount provided is up to the discretion of the employer.
Along with attracting top talent, bonuses come with a range of benefits. They help to improve retention rates, strengthen company morale, and boost productivity. Providing your team with a variety of generous bonuses shows them you value their hard work. There are a number to choose from, like signing, referral, and holiday bonuses.
Perks and Rewards
In addition to bonuses, many employers opt to provide their team with fun perks and gifts as a way to show their appreciation. For example, employers offer their workers rewards based on their interests, such as free sports tickets or live shows. They wine and dine employees and work to show them a good time outside of working hours. Another approach many top companies take is to offer quality employees more paid time off and flexible working arrangements.
Workspace Costs
Working with a global team helps cut down on costs surrounding real estate, utilities, cleaning, office furniture, etc. In short, remote-first work can save you a ton. However, it is a good idea to put aside some money for your distributed team members' workspaces.
Many companies offer their remote employees a budget for their home office or set them up in a coworking space. These membership-based workspaces have been proven to help employees thrive and are available throughout Croatia.
You can sign up for the Technology Innovation Centre Međimurje (TICM) in Čakovec for €50.00 per month, which equates to just over $55.00 USD. If your employees are located in the capital of Zagreb, you can try out BIZkoshnica, which ranges from €15,00 to €25,00 per day.
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Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
