Planning to hire employees in Croatia? Here’s a quick guide

Croatia is becoming a competitive hiring market. The country has seen consistent growth in employment in recent years. This shows that most of the available workforce is already employed. 

At the same time, planning to hire in Croatia is not just about finding the right people. It is also about doing it in a compliant way. 

Employment regulations are clearly defined, with strict rules around contracts, payroll, and employee rights. These rules are enforced, and gaps in compliance can lead to delays or added costs.

In this guide, let’s learn about how to hire employees in Croatia and onboard talent seamlessly. We’ll also find out how workforce management platforms can simplify the process.

How to hire in Croatia

Companies looking to engage talent in Croatia usually choose from three common approaches. Each option below comes with a different level of control: 

1) Set up a legal entity

You can establish a local entity and hire employees directly. This gives you full control over operations, contracts, and payroll. However, it involves registration, legal support, tax setup, and ongoing compliance. 

This route is more suitable for companies planning a long-term presence.

2) Hire independent contractors

For short-term or project-based work, the hiring process in Croatia can involve contractors. They flexibly manage their own work and are not treated as employees. That said, misclassification is a real risk. If a contractor is treated like an employee, it can lead to penalties and backdated contributions under Croatian law.

3) Use a workforce management platform

For many companies, the most efficient way to engage talent or hire employees in Croatia is through a workforce management platform. These providers can engage employees on your behalf without requiring you to set up a local entity.

A workforce management platform like Payoneer Workforce Management helps you handle employment contracts, payroll, tax withholdings, and compliance requirements. 

This helps your team focus on growth instead of just administrative processes. It is a practical option for companies looking for speed, flexibility, and a simpler way to manage employment in Croatia.

Where to find employees in Croatia

Before you hire employees in Croatia, you need to use the right channels. Most hiring happens through a mix of the following employment means:

1. Popular job boards in Croatia

Posting jobs on local platforms is one of the most effective ways to reach candidates. Some widely used platforms include:

• MojPosao
• Posao.hr
• HZZ Job Portal (Burza Rada)

These are among the most commonly used job portals in Croatia for both local and international talent seeking.

2. Work with local recruitment agencies

Recruitment agencies can help speed up hiring, especially for specialised roles. They handle sourcing, screening, and early-stage communication. However, recruitment agencies can be expensive, and may carry role misfit concerns.

3. Simplify hiring with workforce management

If you want to manage hiring on your own but reduce the administrative burden, Payoneer Workforce Management in Croatia can help. It handles employment contracts, onboarding, payroll, and compliance. Your team can then focus on choosing the right candidates instead of managing HR tasks.

Onboarding employees in Croatia

Once you have selected the right candidate, onboarding must begin before the employee’s first working day. In Croatia, employees must be registered with the tax and health authorities before they start work.

Steps to onboard employees in Croatia: 

• Register the employee with tax and health authorities before day one
• Complete onboarding formalities, such as contracts and basic documentation
• Set up payroll and required employee records
• Arrange private health insurance enrolment (optional)
• Plan device procurement and shipment

Key employment laws in Croatia

Understanding employment regulations in Croatia is important before hiring. The system is structured, and employers are expected to follow clear legal rules.

Employment contracts

Employment in Croatia is governed by the Labor Act, which sets clear rules for how contracts should be structured. 

• The standard form of employment is an open-ended contract, meaning there is no fixed end date, and the employment continues until either party terminates it.
• Fixed-term contracts are allowed, but only in specific situations. These are usually used for temporary work, project-based roles, or to replace an absent employee. In most cases, fixed-term contracts cannot exceed 3 years in total duration, including renewals.

Contract essentials:

• Contracts should be provided in written form before or at the start of employment
• A Croatian version of the employment contract is necessary
• Open-ended contracts are the default and most common type
• Fixed-term contracts must have a valid reason and are time-limited
• Basic terms like role, salary, working hours, and start date must be clearly defined

This structure makes employment more stable, but also requires employers to be precise when drafting contracts.

Employee benefits

Employee benefits in Croatia are built around mandatory coverage and structured leave policies. Employers are expected to provide these as part of standard employment:

• Public health insurance is mandatory and covers basic care
• Pension contributions are required under two pillars
• Social security includes health, pension, and unemployment coverage
• At least a 50% pay increase for hours worked on Sundays
• Tax-free holiday bonuses up to €700 annually, with any excess taxed as regular income

In addition to these, companies may offer extra benefits based on internal policies or agreements.

Minimum wage in Croatia

The minimum gross salary in Croatia is set at EUR 970 per month. The amount can vary based on agreements or regions.

Employers are advised to refer to the government sources before budgeting for employee compensation.

Working hours and holidays 

Working hours in Croatia are regulated to ensure a balance between flexibility and employee protection. The standard working schedule is 40 hours per week, including a 30-minute break.

Key points of holidays in Croatia include:

• A minimum of 20 working days of annual leave each year.
• 42 days of sick leave, where you have to pay approximately 70% of the employee’s salary for the first 42 days. After this period, payments are covered by the national health fund (HZZO).
• Maternity leave that lasts 98 days, covering both the period before and after birth. Fathers are entitled to 20 working days of paternity leave, which increases to 30 days in the case of multiple births. In addition, parents can take up to 8 months of parental leave, with longer durations available for multiple children. 
• 2 days of compassionate leave, 1-2 days for family illness, and 1 day of leave for their wedding.
• 14 public holidays 

Tax obligations

Hiring employees in Croatia also means meeting payroll and tax requirements. These are fixed by law and must be followed each month.

Income tax (employee)

Employer contributions

• Health insurance: ~16.5% (paid by employer)
• Pension contributions: 20% total (split between two pillars, paid by employee)

In most cases, the employer’s main cost is the gross salary plus health insurance contributions. These rates may vary slightly based on contracts or agreements.

For a detailed employment cost breakdown, try out our employee cost calculator.

Termination and severance pay in Croatia

An employee can only be terminated based on the following rules:

• Employee resignation
• Mutual agreement
• Termination during probation
• Employer-led termination (misconduct, performance, etc.)

Once the employee is terminated for whatever reason, they have to serve a set duration as a notice period. 

Additional rules

• Notice may increase based on employee age and tenure
• Notice is reduced by half in misconduct cases
• Employees are entitled to paid time (4 hours/week) to search for a job

Severance pay
The severance pay in Croatia applies only in specific cases. To be eligible, the employee must have served at least two years of continuous service and must be terminated by the employer.  

However, the severance pay does not apply to employees who are over 65 years of age with 15 years of pensionable service. 

It is calculated at a minimum of one-third of the employee’s average monthly salary over the last three months, paid for each year of service. 

This offers employer flexibility and employee protection during termination.

Explore Payoneer Workforce Management in Croatia

Hiring in Croatia requires more than just finding the right people. You also need to manage employment contracts, payroll, taxes, and local compliance from day one. Without the right setup, this can slow down your hiring plans.

Payoneer Workforce Management helps you simplify this process. You can plan to engage talent in Croatia without setting up a local entity, while staying compliant with local laws. Payoneer Workforce Management helps you:

• Onboard employees efficiently
• Manage payroll and tax requirements
• Handle contracts and compliance
• Support benefits and employee records

This allows your team to focus on building and managing the local workforce, with support for local laws.

Book a demo today!

FAQs

1. How to hire employees in Croatia?

You can set up a local entity, or you can hire contractors, or you can use a workforce management provider. Each option has its own process. Many companies choose a workforce management platform, Payoneer Workforce Management, because it offers a quicker and easier way to engage and manage talent.

2. How to get a job in Croatia?

You can apply through job boards, or you can apply on company websites. Many people also find jobs through referrals. Skills and experience matter, and local knowledge can help.

3. What is the minimum wage in Croatia?

The minimum wage in Croatia is set at €970 per month. However, this may vary based on collective agreements or sector-based regulations.