Labor & Employment Law in Croatia – 2025 Edition

Croatia at a Glance

• Capital: Zagreb
• Area: 56,594 square kilometers (21,851 square miles)
• Population: Approximately 4 million (as of 2023)
• Location: Croatia is located in Southeast Europe, bordering the Adriatic Sea to the west. It shares land borders with Slovenia to the northwest, Hungary to the northeast, Serbia to the east, and Bosnia and Herzegovina and Montenegro to the southeast
• Political System:  parliamentary republic
• Head of State: The President, currently Zoran Milanović (as of 2025)
• Head of Government: The Prime Minister, currently Andrej Plenković
• EU Membership: Croatia has been a member of the European Union since 01st July 2013
• Currency:  EURO as of 01st January 2023
• Official Language: Croatian
• Economy:
  • GDP: Croatia’s GDP in 2023 was approximately $73 billion USD.
  • GDP Growth Rate: The economy has shown steady growth over the past years, with a growth rate of around 4.5% in 2023.

Hiring in Croatia at a Glance

General premises and requirements

• Written contract
• Gender equality
• Protection of pregnant employees, protection of employees on maternity/paternity leave
• Protection from harassment
• Protection from discrimination
• Protection of whistleblowers
• Minimum rights guaranteed by law
• Employer may always grant more benefits than set by law

Minimum salary (gross)

• 970,00 EUR (gross)

Minimum salary (total cost for the employer)

• 1.130,05 EUR (health contribution calculated)

Standard working week

• 40 hours

Annual leave

• 4 full weeks minimum

Types of employment

• Full time
• Part-time
• Indefinite period
• Definite period (maximum of 3 years)
• Combinations of all the above possible.

Mandatory (statutory) benefits

• Pension insurance
• Health insurance

Common non-mandatory benefits

• Public transportation allowance
• Warm meal allowance
• Bonuses
• Work from home options
• Supplementary health and/or pension insurance

Notice periods

• Between 2 weeks and 3 months
• Increased for employees over 50

Employment of foreigners

• EU and EEA citizens – allowed to work in Croatia without any type of permit; have certain obligations regarding registration of residence
• Third (non EU/non EEA) countries – work and residence permit required

Key regulations

• Labour Act
• Employment by-laws (mandatory for employers with 20 + employees)
• Collective bargaining agreements (for industries, professions, big companies)
• Foreigners’ Act (for employment of third-country citizens)

Employment Contract

As set by the provisions of the Labour Act, employment relations are established by the employer and employee entering into a written employment contract.

Mandatory minimum content of the employment contract as set by the Labour Act:

• names, addresses and Personal identification number (OIB) of the parties;
• date of the conclusion of the employment contract and date of commencement of work;
• place of work;
• work position, i.e. job description, nature and type of work the employee will be performing,
• whether the contract is concluded as an open-ended or a fixed-term contract, and the date of termination or the expected duration of the contract in the case of a fixed-term employment contract;
• duration of paid annual leave;
• procedure in case of dismissal and the notice periods that the employee or employer must comply with;
• gross salary, including the gross amount of the basic or contracted salary, allowances and other payments and payment periods, and other payments to which the employee is entitled;
• daily and weekly working hours duration;
• whether full-time or part-time work is contracted;
• right to education, training and professional development;
• duration and conditions of the probationary period, if contracted (maximum is 6 months).

Duration of employment

• As a rule, employment is contracted for an indefinite period
• Labour Act specifies situations where definite duration of employment may be contracted (fixed-term employment) e.g. replacement of a temporarily absent worker, performance of work duration of which, due to the nature of its performance, is limited by a deadline or an occurrence of a particular event
• Maximum duration of fixed-term employment is 3 years
• Probationary period up to 6 months may be contracted for both indefinite employment and fixed-term employment

Working hours

• Regular working week is 40 hours (8 hours per day, distributed over the course of 5 days)
• employee working at least 6 hours per day is entitled to a minimum 30 minutes break each day, included in the working hours
• employees are entitled to a daily minimum rest period, i.e. daily rest between two successive working days of at least 12 consecutive hours
• employees are entitled to a weekly rest period, i.e. at least 24 consecutive hours – to which a daily rest is added – which generally means that they do not work on Sundays
• in case of rescheduled working hours, which must be justified by special business needs, working week may be extended to 48 hours. Exceptionally, the working week may be extended to 56 hours per week, but only if the employee gave his consent and if that possibility was foreseen by the collective bargaining agreement.
• different regulation for seasonal work
• overtime work is only allowed under special circumstances and at the employer’s written request, with a cap of 10 hours of overtime work per week and 180 hours per year
• for some categories of employees, their consent is required for overtime work
• overtime work is to be compensated for
• working on weekends and public holidays must be justified by a special business need in order to be lawful and is paid extra (in cases of work on Sundays, the minimum increase is 50%)
• heavy-duty work and night-shift work is also paid extra.

Salary

• Government-mandated minimum wage – Regulation on the minimum wage rendered by the Government, once per year
• In 2025, minimum wage is 970,00 EUR; gross amount (so called “gross 1”)
• To the gross 1 amount, health contribution is added, thus making the complete cost for the employer (so called “gross 2”) 1.130,05 EUR
• Paying salary lower than the minimum is an offence
• Certain professions have regulated minimum wage
• Collective bargaining agreements for industries, professions and/or companies often set minimum wages for the area they regulate
• Any decrease in the salary must be agreed by both parties, employer and employee

Paid annual leave (holiday)

• employee is entitled to a paid annual leave of at least 4 weeks per year
• public holidays and statutory non-working days are not included in the annual leave
• employees working on jobs with harmful consequences and under-age employees are entitled to 5 weeks of paid annual leave per year
• increased annual leave may be stipulated by the collective bargaining agreements, employment by-laws or individual employment contracts
• if the employment contract is terminated, the employee is entitled to compensation for the unused part of their annual leave
• payment in lieu of holiday is not permitted
• unused annual leave is transferred to the next year and must be spent until 30th June
• in addition, employees are entitled to up to 7 days of personal leave due to reasons such as the death of a family member, moving, wedding etc.

Sick leave

• employees are required to notify their employer immediately on their temporary inability to work due to illness
• employee are also required to provide a medical certificate within a period of 3 days
• during the period of sick leave the employee is entitled to receive sick pay based on their average salary, but not less than 70%
• if the employee´s sick leave lasts longer than 42 days, then sick pay is to be paid by the Croatian Health Institute.

Termination of employment

• An employment contract may be terminated:
  • by the death of the employee;
  • by the death of the employer who is a natural person
  • by the death of the employer who is a sole proprietor, if there has been no transfer of sole proprietorship in accordance with a special regulation
  • by the cessation of sole proprietorship by force of law in accordance with a special regulation
  • by the expiry of the time for which the fixed-term employment contract has been concluded
  • when the employee reaches 65 years of age and 15 years of pensionable service, unless otherwise agreed by the parties
  • by mutual agreement of the employee and the employer
  • on the day of notification to the employer of the finality of the decision on the recognition of the right to disability pension due to complete loss of working capacity
  • by dismissal (termination, notice)
  • by a decision of the competent court.
• Notice (dismissal) must be in written form and stating the reasons therefore, as well as the payments to be made to the employee upon the termination of the employment
• Notice periods are proportional to the employee’s duration of service with the same employer and range from a minimum of two weeks to three months; after 20 years of service, the notice period increases by two weeks for employees aged at least 50 years and by one month for employees aged at least 55 years.
• During the notice period the employee is entitled to receive their salary and all other entitlements under statute.
• 3 types of notices – business-caused notice, personal notice and summary notice; all require valid and specific reasons
• Certain categories of employees are protected from notice
• Severance pay is compulsory with business-caused and personal notice and after 2 years of service with the same employer

Summary

Employment is a heavily-regulated field in Croatia. Employees are well protected in comparison to other countries and dismissing employees is challenging. Employers are also subject to numerous heavy fines in case of non-compliance with the legislation; consequently requiring them to invest in human resources and legal support.