Looking for an Employer of Record in Croatia? Here’s what you need to know

Hiring skilled professionals in Croatia is appealing for many global companies, but managing employment, payroll, and compliance can quickly become complex due to local labor laws and regulatory requirements.

In many countries, businesses typically rely on an Employer of Record model to hire talent without setting up a local entity. However, using an Employer of Record in Croatia may not be an applicable model to legally employ workers.

Instead of using an EOR in Croatia, companies can turn to a workforce management platform, such as Payoneer Workforce Management, to help manage hiring, payroll, and benefits with compliance support.

Learn more about how Payoneer Workforce Management supports global teams, or keep reading to learn more about the employment aspects in Croatia.

How to hire employees in Croatia

Companies looking to hire and pay employees in Croatia typically have three main options, each with different costs, complexity, and compliance implications.

1. Setting up a local entity: This allows businesses to hire and pay employees in Croatia directly under local labor law, with full control over contracts, payroll, and benefits. However, this requires formal company registration, local accounting support, and ongoing compliance, making it better suited to long-term expansion plans.

2. Hiring independent contractors or freelancers: This can be quicker, but it carries legal risk. Contractor arrangements are closely monitored, and misclassification may lead to penalties or retroactive payments.

3. Using a workforce management platform: While an Employer of Record in Croatia model may not be permitted, companies can use a workforce management platform as a streamlined solution. This approach supports onboarding, payroll, and workforce administration while aligning with local employment regulations, including localized benefits where required.

How to onboard employees in Croatia

Onboarding employees in Croatia involves preparing compliant contracts, registering employees with the relevant authorities, and setting up payroll and benefits.

The process of onboarding talent in Croatia generally includes:

• Payroll and benefits onboarding: Register local employees in payroll systems and ensure they are enrolled in all required benefits in accordance with local labor laws.
• Device provisioning and setup: Make sure the new hire receives the necessary equipment and that all devices are properly configured to support their work from day one.
• First‑week orientation: Organize an introductory session during the employee’s initial week to walk them through company guidelines, onboarding workflows, and the expectations of their role.
• Team introductions: Arrange time for the new hire to meet their immediate team and connect with colleagues across the wider organization.

Payoneer Workforce Management enables companies to compliantly engage talent across borders through its technology platform, helping streamline onboarding while maintaining compliance.

Pay employees in Croatia

To pay employees in Croatia, employers must carefully manage payroll timing, statutory deductions, and benefits. Salaries must be paid in euros (EUR), and wages must be paid no later than the 15th day of the month for the previous month’s work.

The minimum gross monthly salary is EUR 970, though higher minimums may apply under collective agreements. While there is no legal obligation to pay a 13th-month salary or annual bonus, employers may pay non-taxable bonuses up to EUR 700 annually, with amounts above this threshold subject to tax and contributions.

Taxes and contributions

Employers must also account for mandatory taxes and contributions.

• Income tax: 20% on annual income up to EUR 50,400 and 30% on income above that amount, with possible local surtaxes
• Public health insurance: Mandatory coverage administered by the Croatian Health Insurance Fund (HZZO), funded through payroll contributions totaling approximately 16.5%
• Pension insurance: Contributions include a first pillar rate of 15% and a second pillar rate of 5%
• Other: Additional contributions apply for unemployment and occupational injury insurance

Managing Croatia payroll accurately is essential for compliance. Payoneer Workforce Management’s unified, all-in-one platform gives you a single dashboard to manage a global workforce.

Employment laws in Croatia

Croatian labor law provides strong employee protections and clearly defined working standards. Employers must stay compliant with the following key rules:

• Probation periods may not exceed 6 months and must be proportionate for fixed-term contracts.
• Standard working hours are 40 hours per week, with a 30-minute break included.
• Overtime requires written notice and is limited to 50 hours per week and 180 hours per year.
• Overtime is prohibited for minors.
• Certain employee groups, including pregnant women, parents of children under 8, and part-time workers with other employment, require written consent for overtime, except in emergencies.
• Additional pay applies for overtime as per collective agreements for night work, Sundays, holidays, and non-working days, with Sunday work requiring at least a 50% hourly increase.

You can get support to stay compliant with local labor laws by using Payoneer Workforce Management’s infrastructure.

Minimum wage in Croatia

The minimum wage in Croatia is set at a national level and applies to private sector employees. As of 2026, the minimum gross monthly salary is EUR 970. This rate may vary depending on sector-specific rules or collective bargaining agreements.

For outsourced workers, pay and working conditions must not be less favorable than those of employees performing the same work at the user company. In practice, this means outsourced workers fall under the collective agreement applicable to the company where they actually work, if one exists.

Employment contracts in Croatia

Employment contracts in Croatia must be provided in writing and clearly define the employment relationship. Each employment contract must include:

• Identification details of both parties
• Place of work or applicable work locations
• Job title or description of duties
• Contract signing date and start date
• Contract type (and duration, if fixed-term)
• Paid vacation leave entitlement, or how it is calculated
• Termination procedure and applicable notice periods
• Gross salary, allowances, and payment schedule
• Working hours and whether the role is full-time or part-time
• Training or development rights, if applicable
• Probation period terms if agreed

Onboard talent quickly and securely with localized contracts and payroll using Payoneer Workforce Management.

Leave policy in Croatia

In Croatia, employers must offer their employees paid leave, including vacation time, public holidays, sick leave, and parental leave.

Vacation leave and public holidays

Employees working a 5-day week are entitled to at least 20 working days of paid vacation leave per year. They can usually carry forward unused leave, but it must be used by June 30th of the following year. 

Croatia also observes 14 public holidays per year.

Sick leave

In Croatia, employees are entitled to sick leave and sick pay for up to 42 calendar days. Employers pay 70% of the employee’s average salary for the first 42 calendar days. After that, the Croatian Health Insurance Fund continues payments, usually at the same rate.

Parental leave and other leave

Maternity leave lasts 98 days, with 28 days off before birth and 70 days off after. Fathers are entitled to paid paternity leave of 20 working days for 1 child, or 30 days for multiple births, provided by the state. 

The parents’ jobs are usually protected during this time. 

Other leave

Employees may also be entitled to compassionate leave (2 days of paid leave), wedding leave (1 paid day), and family illness leave (1 or 2 days).

Work permit in Croatia

Work permit requirements depend on the employee’s nationality. EU citizens face fewer restrictions, while UK and other non-EU nationals must follow specific immigration procedures.

Employers should consult official government resources to confirm requirements before hiring.

Background check in Croatia

Employers may conduct background checks before hiring, subject to privacy and data protection laws. These checks can include criminal records, employment history, education verification, and review of publicly available social media. Employee consent may be typically required, and employers must disclose what checks will be performed.

Employment termination in Croatia

Termination in Croatia must follow strict legal rules and valid grounds. Employment may end through resignation, mutual agreement, termination during probation, or employer-initiated dismissal for reasons such as misconduct or performance issues.

Notice of termination

Notice periods depend on length of service and age, ranging from 2 weeks for short service to up to 3 months for long-serving employees, with extensions for older workers. 

Length of employment	Notice period
Less than 1 year	2 weeks
1 year	1 month
2 years	1.5 months
5 years	2 months
10 years	2.5 months
20 years	3 months
Extensions	Additional notice
Age 50	+2 weeks
Age 55	+1 month

Employees still in their probation period require at least 1 week’s notice. Misconduct dismissals generally involve shorter notice periods.

Severance pay

Severance pay is owed when termination is initiated by the employer without misconduct, provided the employee has at least 2 years of continuous service under an indefinite contract. Severance is calculated as at least ⅓ of the employee’s average monthly salary per year of service, subject to non-taxable limits.

Company registration in Croatia

Registering a company in Croatia may make sense for businesses planning long-term operations and direct hiring. However, registration involves administrative complexity and ongoing compliance obligations.

Details on registration requirements are available on the government website. 

However, for companies seeking flexibility, a workforce management platform can be a streamlined way to onboard and engage talent. Payoneer Workforce Management enables compliant onboarding and engagement of talent in 160+ countries without setting up a local entity.

PEO in Croatia

A PEO is designed to help you with HR and admin tasks for employees you already employ through your local entity.

While some countries allow the use of EORs, in Croatia, it may not be applicable, companies can use compliant workforce management solutions. These platforms help manage HR and compliance processes for companies without a local entity. This is invaluable for international companies seeking global talent.

Payoneer Workforce Management services in Croatia

Working with a partner like Payoneer Workforce Management helps support global operations and access local talent. 

With our unified platform, you can get assistance with:

• Onboarding and offboarding
• Payroll and taxes
• Benefits administration
• Timesheets
• Guidance with local employment laws and more

Book a demo to find out more.

FAQs

1) Are EORs in Croatia legal?

In Croatia, Employer of Record model may not be permitted. Companies can instead use a workforce management platform to manage hiring and compliance while respecting local labor laws.

2) How much does it cost to hire Croatian talent?

Employer costs generally include pension contributions of 20%: first pillar (pension insurance) is 15%, second pillar (pension insurance) is 5%. Health insurance contributions are approximately 16.5%. Severance pay is only owed upon termination and does not require ongoing accrual.

Please use our cost calculator tool for an employment cost estimation.

3) Why hire Croatian talent through a workforce management platform?

Payoneer Workforce Management allows businesses to onboard and pay employees across the globe in 70+ currencies, without setting up a local entity. Get in touch to learn more about pricing and services.