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Download NowEmployers 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 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 of 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 60,000 | 20% |
Over EUR 60,000 | 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 600, which increases by EUR 300 if they have one child, EUR 400 for two and EUR 500 for three.
The government also provides income tax relief for specific age groups.
Prior to 2024, Croatia operated a municipality tax, which was levied as a surtax on the individual’s personal income tax liability. However, as of 2024, that is now cancelled, and Croatia will switch to a municipality-based income tax rate system. The rate will range from 15% to 23% for income up to €60,000 and from 25% to 34% for income exceeding €60,000.
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.
The basic personal deduction will increase from €53,090 to €56,000. The base for personal deduction increase will also change from €33,181 to €56,000. The percentage of personal deduction increase will change for family members or disability, with specific ratios and monthly increases outlined.
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.
Taxpayers up to 25 years old 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.
Taxpayers between 26 and 30 years old 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.
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