Hiring Employees in Croatia: A Comprehensive Guide

Croatia is a well-developed economy and has access to markets in Asia and Europe. The strategic position with three Pan-European corridors and political stability helps investors gain faith in the Croatian business marts. 

The Croatian government has relaxed tax norms and rules to ensure no double taxation on entities doing business outside the country. The company registration formalities are easily sailed through at the employer’s end. Croatia ranks 51st among 190 economies on the Ease of Doing Business list. 

Since Croatia has several free trade zones, hiring in the country is a decent bargain. The workforce here forms 52% of the overall population, providing skilled employees to an organization. Croatia also ranks consistently high among lists of countries wherein the age group between 20 and 24 has earned an upper secondary level degree.

Croatia also has a robust system of logistics and transport in place. Foreign companies can take advantage of the country’s workforce and economic stature for further expanding offshore businesses. Here is a guide that informs you on how to recruit employees in Croatia.

Things to Know Before Hiring in Croatia

Before you set out on hiring staff and initiating the processes for recruitment and selection in Croatia, there are essential pointers around the hiring process to keep in mind-   

1. The hiring practices in Croatia need to comply with local practices.
2. Employment screening are only allowed if it pertains to simple educational and professional checks from past employers.
3. Taxation laws are flexible, and tax breaks have been introduced to ensure easier entry for global companies.
4. Employers cannot ask discriminatory questions to employees.

Employment-related must-knows

When you begin the hiring process in Croatia, keep track of employment practices too

• For all recruitment processes in Croatia, employers are unable to exhibit discrimination or bias on gender and disability or any other factor.
• The official language here is Croatian.
• Trade unions are part of the work culture in Croatia, and employers must keep the union policy and collective trade agreement rules in mind while framing a contract.

Employment contract

In Croatia, employment contracts cover employees who may be –

• Temporary workers
• Part-time workers
• Full-time workers

Employment contracts are mandatory and must be in writing for all employees. These contracts need to be drafted in the official language with the availability of translation in case the need for better communication arises.

The employment contract must mention the following-

• Job description with role and duties mentioned
• Pay details
• Leaves and holidays available
• Termination terms and severance pay
• Work hours, overtime, and breaks

Probation 

• Usually, companies allow a probation period of six months at the most.

Termination and notice period

Termination during probation is allowed, with the employer needing to give notice of seven days at the least. Without causes such as dissolution or modification of business employee incompetence, notice from the employer is mandatory for the termination of an employee.

• The notice period is two weeks for employees who have served a year or more.
• A month and a half for employees who have served two years 
• Two months for employees having served five years 
• Two and a half months for employees having served ten years 
• Three months for employees having served 20 years
• The termination period gets increased by a couple of weeks when a redundant employee is age 50 and by one month when the age is more than 55 years.

Working hours and breaks

When hiring staff in Croatia,  you must track the norms for working hours and break times.

• It is usual for employees to work eight hours daily and 40 hours weekly.
• However, Croatia has a 180-hour annual limit on overtime work.
• With the written consent of the first employer, an employee can choose to work for a second employer in the same domain that uses similar skill sets.

Payroll

• Salaries get paid monthly to employees in Croatia.

Minimum wage

• As of January 2023, the minimum wage in Croatia is  (Croatian Kuna) HRK 5,274.15.

Maternity & paternity leaves

• Maternity leave of 98 days is allowed at full payment at par with salary until the child turns six months old.
• Paternity leave is allowed for ten days in case of a single birth or 15 days for multiple births or twins. Payment during this period is at par with salary.

Annual leave

• Employees get four weeks of paid annual vacation leave after completing six months of employment with the organization. 
• Employees cannot carry the unused annual leaves past June 30th of the following year.

Holidays for employees             

The list of public holidays comprises

Social security

The social security system in Croatia comprises contributions as under-

• Pension is payable by employees at 20%.
• Health insurance is payable from employers at 16.5% of the total salary.

Taxes

• Up to HRK 360,00 – 24%
• Over HRK 360,00 – 36%

The Cost of Hiring an Employee in Croatia

The recruitment fees in Croatia are interlinked with the recruitment process in Croatia. Consider these costs for hiring in Croatia-

• Job adverts
• Onboarding costs
• Legal and paperwork expenses
• Costs related to applicant reviews
• Taxes 
• Salary and benefits
• Social Security and bonuses

What Does a Company Need to Hire Employees in Croatia?

The setup for hiring in Croatia is related to the employer’s business model and industry. The standard while hiring in Croatia are as under-

• Agency costs
• Company registration and seal costs
• Cost for local bank account
• Cost for document notarization
• Cost for social security registration

Keeping in mind the legal age for employees is vital since this varies from country to country. Croatia allows working age at a minimum of 15 years with Labour Code sanctions and at 18 years without the purview of the Labour Code.

Various Options for Hiring Employees in Croatia          

Hiring candidates in Croatia needs concentrated efforts and research. Employers generally have a couple of days to initiate and close the process-                                             

• When an employer decides to conduct recruitment in Croatia, choosing a dependable global EOR service provider for Employer of Record (EOR) is mandatory. Multiplier may offer solutions linked to logistics minus the need to set up a specific entity in Croatia.
• You may have an in-house department to hire employees in Croatia. This might involve setting up a team first and needing more resources.

The Steps to Hiring in Croatia

There are no rules around the steps for recruiting candidates in Croatia. The process is reliant on the industry. The typical steps for hiring in Croatia are:

Advertise open jobs at the company

• Advertise all openings on leading social media hubs, websites, and boards. All details of such openings must be mentioned along with the experience level the employer seeks from the candidate.

Connect with potential hires

• Employers may have an interactive round via phone or video call. 
• The round helps to know if a candidate meets the basic requirements for the job.

Scheduling interviews

• An interview round might occur in multiple stages and include a psychometric assessment that helps adjudge a candidate’s strengths. Based on the role requisites and outcome of the test, it becomes easier to create an interview pool.
• Interviews are seen as a way for negotiations too.

Selection of candidates

• The final selection is confirmed and communicated to the candidate via phone or email. The following steps are an offer letter, contract drafting, and onboarding related to training on the job.

Let Multiplier be Your EOR Platform in Croatia

Hiring and onboarding employees involve a lot of work at multiple levels. You may collaborate with a PEO-EOR platform, such as Multiplier, for expert assistance with the process. The internal team helps with details of any recruitment process in Croatia with the aid of SaaS-based Employer of Record solutions for hiring talent. Multiplier can help employers understand the local laws to seal the hiring process in Croatia.