Employers contribute to social security through 16.5% health insurance. The social security contributions also cover work accident insurance, pension, family and maternity benefits.
Companies employing workers with no work experience or under the age of 30 with a permanent employment contract do not need to make health insurance contributions for one to five years, depending on the case.
Companies with more than 20 employees must employ disabled individuals. The number of disabled employees depends on the number of employees, but it cannot be lower than 3% of the total number of employees.
Companies that do not comply with this requirement must pay a monthly fee amounting to 20% of the minimum salary for each disabled employee they are not employing.
Employers must pay a monthly fee to the chamber of commerce, which ranges from EUR 5 to EUR 527, depending on the company size.
Residents of Croatia are subject to tax on their worldwide income (except if exempt under a double taxation agreement). In contrast, non-residents are subject to tax on the income generated only within the country. To be considered a resident, the person must spend more than 183 days in one or two calendar years in Croatia, own real estate, or have one at their disposal for more than 183 days in one or two years.
Staying in the real estate is not a determining factor. If the individual has real estate both in Croatia and abroad, they will be considered resident taxpayers in the country in which their family resides or, in case of no family, the country the person usually goes to work or is physically present. If the other country does not consider the person a resident taxpayer, they are seen as a Croatian resident taxpayer.
|GROSS INCOME||PROGRESSIVE TAX RATE (%)|
|Up to EUR 47,780||20|
|Over EUR 47,780||30|
Couples cannot file taxes jointly and are treated as separate individuals for tax purposes.
Personal allowances are non-taxable portions of income. Employees are entitled to a monthly allowance of EUR 530, which increases by EUR 232 if they have one child, EUR 332 for two and EUR 465 for three.
The government also provides income tax relief for specific age groups.
Certain cities and municipalities in Croatia levy a municipal tax, which can be up to 18% high. It’s levied as surtax to the individual’s personal income tax liability as follows:
Social security contributions consist of pension contributions, which are withheld by the employer during payroll, at a rate of 20% of the employee’s gross income, capped at EUR 970 monthly and EUR 12,095 annually.
First: EUR 232 second: EUR 332; third: EUR 465
Benefits in kind are seen as employment income and are taxed accordingly with the exception of the following:
If any of these benefits exceed the outlined limits, the difference is considered income and is subject to personal income tax, municipal tax, and employer’s and employee’s social security contributions.
Do not pay 100% of their annual tax liability arising in connection with the portion of their income from employment in the 20% tax band.
Do not pay 50% of their annual tax liability arising in connection with the portion of their income from employment in the 20% tax band.
Do not pay 50% of their annual tax liability arising in connection with the pension benefit.