Setting up and managing a payroll in Croatia
The European country of Croatia has experienced rapid economic growth in recent years, and there is now a lot of potential for foreign businesses looking to expand in the region.
If your organization is interested in expanding into Croatia then an important phase of the process will probably be establishing and maintaining a payroll to hire employees locally. This process can be quite complex, and you may experience delays of weeks or even months dealing with the administration and compliance work.
A popular solution to this difficulty is to outsource the Croatia payroll setup and management to a global PEO. At Horizons, our team specializes in helping organizations expand into Croatia as smoothly as possible. We’ll handle your payroll setup and management, whether or not you already have an established presence in the country.
If you have an entity
For organizations that have already established an official entity in Croatia, we offer full payroll outsourcing. Our expert team will set up and manage your payroll, then take care of all the associated administration, HR, and compliance work.
This outsourcing service is ideally suited to large organizations and those looking at Croatia with a long-term view.
If you don’t have an entity
If your organization has yet to register an entity in Croatia, then we can provide a comprehensive service to get you up and running in the country. We’ll use our subsidiary in Croatia to act as employer of record for your hires so you don’t have to go through the complex process of establishing an entity.
Additionally, we will set up and manage your Croatia payroll, handle HR, compliance, and any other associated work to make your expansion simpler and low risk.
The simplest way to expand your business in Croatia
Croatia payroll guide
What are the withholdings and tax regulations in Croatia?
Employers in Croatia must pay into various social funds. For health insurance, they must pay 15% of employee salary, for unemployment they must pay 1.7%, and for accident insurance, they must pay 0.5%.
Employers do not have to pay these contributions for five years if they hire people under the age of 30.
Employee entitlements and terminations
Employment contracts in Croatia can be terminated if both the employer and employee agree, or if there is proper cause for termination. Employers must provide notice periods, the length of which depends on the length of service:
- Under one year of service = Two weeks of notice
- One year of service = One month of notice
- Two years of service = One and a half months
- Five years of service = Two months of notice
- Ten years of service = Two and a half months
- 20 years of service = Three months of notice
Some other factors, such as the age of the employee, can result in a longer mandatory notice period. Terminated employees may also be entitled to severance pay.
How to establish a Croatia payroll
If you want to hire in Croatia and set up an in-country payroll, you may need to establish a Croatia-based entity. However, this process can be lengthy and confusing, potentially leading to significant delays and negatively affecting revenues, so it’s always important to get expert advice.
Horizons can help you to avoid this lengthy and complicated process, providing comprehensive payroll setup and management outsourcing in Croatia. Beyond this, our experts will handle your in-country HR, compliance, and tax, and we can even act as your employer of record if you don’t have an entity in the country. Outsourcing to Horizons can save you time, effort, and money, setting you up for a successful expansion into Croatia.