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PAYROLL ESSENTIALS IN CROATIA – A QUICK OVERVIEW
PAYROLL ESSENTIALS IN CROATIA – A QUICK OVERVIEW
Payroll is one of the most sensitive and highly regulated areas of business. To help employers stay compliant, we’ve prepared a brief overview of the key payroll rules in Croatia:
- Contracted Salary
All employment agreements must state the employee’s gross salary (Gross 1).
- Employee Contributions
From the Gross 1 amount, employees pay:
- Pension Pillar I: 15%
- Pension Pillar II: 5%
- Employer Contributions
Employers pay an additional 16.5% for health insurance on top of Gross 1.
This results in the total salary cost (Gross 2).
- Pillar I Base Deduction
| Gross Salary | Deduction Amount |
| Up to €700.00 | €300.00 |
| €700.01 – €1,300.00 | 0.5 × (1,300.00 – gross salary) |
| Above €1,300.01 | No deduction |
- Local Tax Rates
Income tax rates vary by municipality and are defined by local government acts.
- Salary Payment Deadline
Salaries for the previous month must be paid by the 15th of the month.
- Mandatory Reporting
On the salary payment date, the JOPPD report must be submitted to the Tax Authorities.
- Non-Taxable Payments
Employers may provide various non-taxable benefits (e.g., transport allowance, meal allowance, remote-work allowance), which must also be reported through JOPPD.
- Employment Records
Employers must maintain accurate records of working hours, overtime, absences, and other attendance data.
- Employee Registration
Employees must be registered with HZMO (Croatian Pension Insurance Institute) and HZZO (Croatian Health Insurance Institute) at least one day before starting work.
Deregistration must be done on the last day of employment.
Benefits of Payroll Outsourcing
- Full Legal Compliance
A dedicated payroll provider ensures calculations are accurate and fully aligned with the latest regulations and legislative changes.
- Cost Efficiency
Outsourcing eliminates the need for internal payroll staff, software, training, and cybersecurity measures—reducing overall operational costs.
- Enhanced Data Security
Payroll data is handled by a small, trusted team of experts, significantly reducing the risk of data leaks or breaches.
- No Risk of Losing Key Staff
When payroll is handled in-house, losing a payroll specialist can create major disruption.
With outsourcing, you always have trained professionals managing your payroll—without interruption.
- End-to-End Service
We handle everything: employee registrations, records, monthly payroll processing, benefit calculations, and communication with the Tax Authorities.
Why Choose Prime Support?
Our team is made of experienced payroll and accounting professionals with years of expertise in Croatian payroll legislation. We provide reliable, accurate, and secure payroll services tailored to your company’s needs.
Get a Customized Offer
Contact us and we will prepare a proposal tailored specifically for your business: