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EMPLOYMENT COST IN CROATIA

Employment costs
A person liable to contributions, based on labour relations, is the insured person whereas the employer or any other entity, that pays the salary in the name of the employer, is liable to calculate and pay the contributions.

The insured person (employee) is liable to pay contributions, whereas the employers or entities, paying the salary, are obliged to calculate, suspend and pay the following regular contributions:

Contributions, paid by the employees, amount to 20%

• Compulsory pension insurance based on generational solidarity
(“1st pillar” – amounting to 15 or 20%)
• Compulsory pension insurance based on personal individualised capitalised savings
(“2nd Pillar – amounting to 5%)

Contributions, paid by the employers, amount to 17.2% and are divided as follows:

• Compulsory health insurance (15%)
• Compulsory health insurance related to occupational safety and health (0.5%)
• Compulsory employment contribution (1.7%)

Contributions (social taxes) from and on the salaries are paid at the rate of 35.2%


Average salary in November, 2015:

Currency (HRK): 5,855 Net 8,185 Gross

(EUR): 771 Net 1,078 Gross (exchange rate according to the HNB)

A person liable to contributions, based on labour relations, is the insured person whereas the employer or any other entity, that pays the salary in the name of the employer, is liable to calculate and pay the contributions.

The lowest monthly wage base for full-time contributions calculation in 2016 totals HRK 2,812.95.

Example monthly wage calculation for example 10,000 HRK
This calculation is based on a salary of a taxpayer living (single) and working in Zagreb.

Gross salary: 10,000 HRK
S
alary contributions paid by the employers 17.2%: 1,720.00 HRK
Total cost to the employer 11.720.00 HRK

Gross salary: 10,000 HRK
Salary contributions“ paid by employee:
Compulsory pension insurance “1 st pillar“ (15%): - 1,500.00 HRK
Compulsory pension insurance “2 nd pillar“ (5%): - 500.00 HRK

Income: 8,000.00 HRK
Personal allowance: -2,600.00 HRK
Tax base: 5,400.00 HRK
12% (for monthly salary up to 2,200 HRK): -264.00 HRK
25% (for monthly salary from 2,200 to 13,200 HRK): - 800.00 HRK
40% (for monthly salary above 13,200 HRK) 00,00.00 HRK

Total tax amount: 1,064.00 HRK
Surtax (for Zagreb: 18%): -191.52 HRK
Tax + surtax: 1,255.52 HRK
Net salary to the employee: 6,7444.52 HRK

Surtax on income tax
Taxpayer:
Those liable to pay income tax who have a domicile or a common residence in the area
of the commune/municipality that has prescribed the obligation to pay the tax.
Tax basic:
The amount of income tax.
Tax rate:
A commune at the rate of up to 10%
A city with a population below 30,000 at a rate of up to 12%
A city with a population over 30,000 at a rate of up to 15%
The city of Zagreb at a rate of up to 30%.

Croatia the best country for your business !! The unusual climate for your business !!
You have to try to do your business here !!!

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