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Regulations for Working in Croatia

Overview

Anyone traveling to Croatia for work purposes – whether for a business trip, a posting, or a workation – must comply with specific travel and employment regulations. Despite Croatia’s EU membership and participation in the Schengen Area, different rules apply depending on the purpose of stay, including entry requirements, registration obligations, social security, and tax regulations. In this article, you'll learn which legal requirements apply to business travel, employee secondments, and remote work in Croatia – and how to plan your professional stay safely and in compliance with the law.

EU Posted Workers Directive

Registration Requirements

Posted workers directive:Foreign employers must submit a posted workers notification electronically to the Croatian Labour Inspectorate before the employee begins work in Croatia.

Notification of Changes:Any changes to the posting (e.g. duration, location, etc.) must be reported to the Labour Inspectorate within 3 days of the change.

Required Documents

Foreign employers must keep the following documents during the posting period and for two years after the posting ends:

Employment contract
Information on remuneration (including calculation and payment)
Records of working hours
A1 certificate (if applicable, confirming social security coverage in the home country)

Language: These documents can be kept in their original language. Croatian authorities may request a translation, and a certified translation must only be provided upon official request.

Contact Person in Croatia

Foreign employers must designate a contact person in the Netherlands who acts as a liaison between the foreign employer and the authorities. Posted workers themselves can serve as contact persons for their employer.

Special Provisions

Postings longer than 3 months:
If the assignment lasts longer than 3 months, the posted employee must register their residence with local authorities.
Time spent in Croatia under a posting does not count toward eligibility for permanent residency.

Third-country nationals:
Depending on residence and work permit requirements, different rules may apply.

Digital Nomad Visa:
Individuals holding an approved Digital Nomad Visa are exempt from Croatian income tax on earnings received while working remotely in Croatia.

Penalties for violation

Violations of Croatian labour law regarding postings may result in various fines.

Foreign employer:
Fines typically range between €4,110 and €6,630 for:

Failure to submit a complete and correct posting notification
Failure to appoint a contact person
Failure to report changes within 3 days

Labor Law

Minimum Wage

Legal minimum wage as of July 2024: €840 gross per month.

Collective Bargaining Agreements (CBAs)

Croatia typically has one CBA per industry.
Example: In the construction sector, the CBA sets the minimum wage at €780 gross per month.
Important: If a CBA applies, wages generally must not fall below the legal minimum wage but may exceed it.

Working Hours

Daily limit: 8 hours per day
Weekly maximum: 40 hours per week‍
Extended average: Average weekly working time (including overtime) may not exceed 44 hours over a 12-week period

Important Hints

Non-compliance with local labour laws may result in additional financial obligations, fines, or claims under local termination and working time rules.

For example, violations of minimum wage laws can lead to fines of €8,000–€13,000 for the foreign employer and €1,000–€1,300 for the responsible person (e.g. managing director).

Social Security

For workers posted from an EU country, EU Regulation 883/2004 applies.

With a valid A1 Certificate: the employee remains covered under their home country’s social security system‍
Without an A1: Croatian social security rules apply, and the foreign employer must act like a Croatian employer

Important Hints

The consequences of a violation may include extensive administrative obligations, back contributions (interest), increased audit costs and severe sanctions. In addition, significant reputation damage can occur in this context.

Income Tax

No "de minimis" threshold: Croatian law does not specify a fixed period under which no tax liability arises. Instead, the applicable double taxation agreement (DTA) between Croatia and the employee’s home country must be consulted.

Responsibility of the employee: If the employee is considered tax liable in Croatia under the relevant DTA, they are responsible for declaring and paying Croatian income tax on foreign-earned income.

Tax rates (2023):

Income tax rates: 20% and 30%, depending on income level
Additional local tax may apply (e.g., 18% in Zagreb)

Important Hints

The consequences of non-compliance can vary depending on the situation, but there is often an immediate obligation to submit a tax return in the destination country, which can result in further, extensive consequences for the employees and the company.

Immigration & Visas

International activities require exact compliance with international visa and entry requirements. The traveler, the type of activity, the purpose of stay and the duration are decisive for this, whether a business visa, a work visa or other special permits are required.

Important Hints

The consequences in case of infringement may include entry bans and associated loss of revenue, sanctions, fines and reputation damage.

Permanent Establishment

Employees working abroad can establish a permanent establishment through their activities in the target country and thus trigger a chain of financial and administrative consequences for companies.

Important Hints

The consequences of a violation may vary depending on the situation, but each establishment entails a significant administrative burden. In addition to registration, profit allocation and filing of the corporate income tax return, income tax obligations usually also arise.

Wichtige Hinweise

Important Hints