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Hiring in Croatia
Background checks in Croatia
Hiring employees and other types of workers in Croatia
Language requirements in Croatia
Running payroll in Croatia
Grow your global team with CXC
Employer of Record in Croatia
Expanding your business into Croatia can be an exciting and promising undertaking, but navigating local labour laws, payroll systems, and compliance requirements can be challenging. Partnering with an employer of record (EoR) in Croatia offers a seamless solution, allowing you to hire and manage employees in the country without the need to establish a legal entity.
An EoR handles essential administrative tasks such as employment contracts, payroll processing, and tax compliance, ensuring your operations align with local regulations while you focus on growing your business.
Working with an EoR in Croatia also provides flexibility for businesses entering the market. From drafting bilingual employment contracts to managing social contributions and income tax requirements, an EoR offers comprehensive support tailored to Croatia’s legal and cultural environment. Whether you are hiring your first employee or building a larger team, partnering with an EoR ensures compliance, saves time, and reduces risks, making it an ideal choice for businesses expanding into this
dynamic market.
In this guide, we will provide everything you need to know to hire in Croatia quickly and compliantly, from hiring practices and understanding employment background checks to managing payroll.
Hiring in Croatia
The Croatian labour market is diverse and has a strong emphasis on skilled professionals in various sectors, including information technology, manufacturing, tourism, and healthcare. Croatia has a well-educated workforce with high levels of fluency in foreign languages, especially English, which makes it an appealing option for international companies looking to recruit top talent. With the increasing trend of remote work, hiring in Croatia has become even more accessible to businesses abroad.
However, the demand for specific expertise may lead to competition, particularly for roles in industries such as IT. It is important for employers to understand the local job market, salary expectations, and recruitment practices to successfully attract candidates in Croatia.
Croatia’s employment laws and regulations
When hiring in Croatia, employers must comply with the country’s Labour Act, which outlines the rights and obligations of both employers and employees. This Act governs key aspects of the employment relationship, including working hours, holidays, leave entitlements, and termination of employment. Employers must adhere to legal requirements, ensuring that employees’ rights are fully respected.
One significant legal consideration is registering your business. If you are looking to set up a subsidiary or establish a presence in Croatia, you must register your business with the relevant authorities. This is a crucial step before you can start hiring and is essential for ensuring that your company operates legally within the country.
Furthermore, all employment contracts must be created in writing. Croatian law requires that these contracts be in Croatian and signed by both parties to avoid any disputes over terms and conditions. These agreements must clearly outline key details such as salary, working hours, benefits, and the notice period.
Employment contracts and terms in Croatia
In Croatia, employment contracts can either be indefinite-term or fixed-term. While indefinite-term contracts are standard for permanent positions, fixed-term contracts are common for seasonal work, temporary projects, or to cover for employees on leave. It’sIt is essential for employers to understand the specific terms under which they can offer fixed-term contracts to ensure that they comply with Croatian employment regulations.
A written employment contract should include key details such as the employee’s salary, job description, working hours, the duration of the contract (if applicable), and the notice period for termination. In addition, any special conditions, such as probationary periods or specific benefits, should be clearly defined in the contract.
Another important aspect to consider is obtaining the necessary work permits and visas for non-EU/EEA nationals. If you plan to hire foreign nationals, you must ensure that they have the appropriate work permits. The type of permit depends on the nature of the employment. For example, the Temporary Residence Permit with Work authorisation is a common visa for employees working in Croatia for up to a year. Employers must work with local authorities to ensure all visa and permit
requirements are met for foreign employees.
Background checks in Croatia
Background checks in Croatia are an important aspect of the recruitment process, but they must be done in compliance with the law. Employers should carefully consider what checks are necessary and permissible, especially in relation to criminal checks, which are only acceptable in certain circumstances. Moreover, when hiring foreign workers, ensuring that they have the correct work visas is crucial to avoid legal complications.
Regulations surrounding Croatia’s employee background checks
In general, employment background checks must comply with both Croatian and EU data protection laws, specifically the General Data Protection Regulation (GDPR). This means that any personal information gathered during the hiring process must be used solely for legitimate purposes and must be handled with care.
Background checks in Croatia can include verifying employment history, references, and qualifications. Reference checks, which involve contacting former employers or colleagues, are common and generally permitted. Before carrying out these background checks, employers should seek the candidate’s consent and ensure they comply with GDPR requirements.
Criminal background checks in Croatia
Criminal background checks in Croatia are generally permissible only under specific circumstances, particularly for roles where trust, security, and safety are important. For instance, employers in sectors like finance, healthcare, or childcare may have a justified reason for requesting criminal checks on candidates. However, such checks should be performed in line with proportionality requirements, meaning they should be necessary and relevant to the role.
For most other positions, criminal background checks are not typically required or advisable. It is important for employers to carefully consider the nature of the job, and the level of scrutiny required before requesting such checks. In cases where criminal checks are necessary, employers must ensure that they are done in a legally compliant manner, following Croatian laws, and respecting the rights of the candidate.
Work visas in Croatia
Another key aspect of background checks, especially when hiring foreign nationals, is verifying work visas and permits. Most foreign nationals are required to have a work permit or visa to be employed in Croatia. However, citizens of countries that are members of the European Union (EU) or the European Economic Area (EEA) do not need a work visa to work in Croatia. On the other hand, non-EU/EEA nationals must obtain the appropriate work permit before they can legally be employed.
The type of work permit required depends on the nature and duration of the employment. For instance, the Temporary Residence Permit with Work Authorisation is commonly used for employees engaged in standard employment for up to one year. If the employment is longer-term, different permits may apply. Employers must ensure they follow the correct procedure for obtaining and verifying work permits for foreign employees.
Hiring employees and other types of workers in Croatia
Hiring employees in Croatia offers businesses a variety of options, from full-time employees on indefinite contracts to short-term roles filled by agency workers or independent contractors. Having a good understanding of the regulations around each of these options is crucial to ensuring compliance with Croatian labour laws.
Whether you are hiring for a long-term position, offering part-time jobs in Croatia, or engaging contractors for specific tasks, the right choice depends on the nature of the work and the flexibility your business requires.
Employee types in Croatia
When you decide to hire employees in Croatia, it is essential to understand the various categories of employment. Employees can be hired on indefinite, fixed-term, or part-time contracts, depending on the nature of the work. The Croatian Labour Act provides specific regulations for each type of contract, ensuring both employer and employee rights are protected.
- Indefinite contracts: This is the most common form of employment, offering long-term job security. It is typically used for ongoing roles.
- Fixed-term contracts: These contracts are limited by time, task, or a specific event. However, Croatian law restricts the use of fixed-term contracts to a maximum of three contracts and three years of duration with a single employee. After this period, the contract will be automatically converted to an indefinite one if the employee has worked continuously for at least six months.
- Part-time jobs: Many businesses in Croatia also offer part-time employment options. These contracts are generally for employees working fewer hours than a full-time role, making them a popular choice for businesses with fluctuating demands. Employees on part-time contracts enjoy similar rights to full-time workers but in proportion to the hours worked.
Employers should be aware that laws regarding additional employment have changed. Now, employees can work for another employer up to eight hours per week without the need for their current employer’s consent.
Independent contractors in Croatia
Many businesses in Croatia also engage independent contractors. These professionals are not employees and typically operate their own businesses or personal services companies. The key difference between an employee and an independent contractor is that contractors are not under an employer’s authority and are not in a subordinate relationship with the principal company.
Engaging independent contractors can be a flexible option for businesses looking for expertise on a short-term basis or for specific projects. However, it is important to ensure that the relationship does not resemble that of an employment contract, as this could lead to legal complications. Independent contractors should have the freedom to work autonomously, and the terms of their contracts should reflect this.
Language requirements in Croatia
The main language in Croatia is Croatian, and while not every aspect of employment requires proficiency
in the language, it plays a significant role in legal documentation. Croatian is the official language of the country, and as such, all employment contracts must be written in Croatian. This is a key legal requirement that ensures clarity and avoids potential disputes.
Employers can, however, provide bilingual contracts if necessary, allowing for contracts in both Croatian and another language, such as English. This bilingual format is commonly used in international companies to ensure that all parties fully understand the terms of employment.
While language may not be an obstacle for all international companies, it is worth noting that employers might require knowledge of it depending on the role. Certain positions, particularly those that involve customer service or working with local authorities, may require fluency in the most spoken language in Croatia. This is often the case for jobs where communication with local clients or colleagues is frequent. However, for many international companies, especially those in tech or multinational corporations, English may be sufficient, and Croatian language skills may not be mandatory.
In terms of written contracts, Croatian law mandates that employment agreements must be signed by both parties and written in Croatian. However, if both the employer and the employee are comfortable with English, a bilingual contract may be acceptable. It is important that the contract clearly outlines key information such as job title, salary, start date, and working hours. If the contract is electronic, it must include a qualified electronic signature (QES) to be legally binding.
For foreign workers who may not yet speak Croatian, there is a voucher system that allows eligible workers to receive financial assistance to learn the language. This can be a helpful option for those looking to integrate more fully into Croatian society and improve their employment prospects. Employers may encourage or even subsidise language learning for their employees, especially in customer-facing roles.
Running payroll in Croatia
When you are looking to expand your business in Croatia, establishing an efficient payroll system is critical. Proper payroll management ensures compliance with the country’s labour laws, tax obligations, and social contribution requirements.
Setting up payroll processing in Croatia
To legally employ workers, entities must establish a legal presence and set up and run payroll in Croatia. This includes registering as an employer with the local authorities and setting up a local payroll system. These steps are necessary to ensure compliance with Croatian labour laws and tax regulations.
The payroll system must account for both employer and employee contributions:
- Employers are responsible for social contributions amounting to approximately 27% of an employee’s gross salary.
- Employees contribute around 13.07% of their gross salary toward health insurance and other benefits.
In addition to social contributions, employers must also withhold income tax from employees’ wages. Croatia applies a progressive income tax rate, with the specific percentage depending on the employee’s earnings.
A critical aspect of payroll setup in Croatia is ensuring that employment contracts are properly drafted and compliant with Croatian labour laws. These contracts should clearly outline the employee’s salary, working hours, tax obligations, and other terms of employment.
Managing payroll in Croatia
Efficient payroll processing in Croatia requires careful management and regular compliance with tax and labour regulations. Key aspects of managing payroll include:
- Tax compliance: Employers must file and pay taxes on time to avoid penalties. This includes income tax withholding and reporting social contributions for employees.
- Accurate record-keeping: Maintaining accurate records of employee wages, tax payments, and contributions is essential for audits and compliance purposes.
- Adapting to local laws: Croatian tax and labour laws may change, and employers need to stay informed about updates to ensure continued compliance.
Employers can manage payroll in-house, but many choose to outsource this function to local payroll providers or global payroll providers, such as CXC . These providers have expertise in local regulations and can help streamline the payroll process while ensuring full compliance.
Grow your global team with CXC
Expanding your business into Croatia offers exciting growth opportunities, but it can also come with unique challenges. This includes setting up a legal entity, which can be time-consuming and costly. And trying to manage the process on your own could put your business at risk.
That is where CXC comes in. As a trusted EoR partner, we simplify the complexities of international hiring in Croatia and beyond. From navigating local regulations, drafting compliant employment contracts, to onboarding and even offboarding, we are here to guide you every step of the way.
Ready to grow your team in Croatia and beyond? Contact our experts today to learn how we can help your business expand seamlessly and compliantly.
Compliantly hire employees anywhere with CXC
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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