PEO Croatia

Professional Employer Organization (PEO)

Employer of Record (EOR) | Remote Work

peo croatia

World Bank Ease of Doing Business Ranking

ease of doing business in croatia
  • DB Rank – 51
  • DB Score – 73.6

Rankings on Doing Business topics – Croatia

rankings on doing business topics croatia

Topic Scores


Global PEO in Croatia

Croatia, nestled at the crossroads of Central and Southeast Europe, is a picturesque gem and a prominent Player Engagement Optimization (PEO) country. With its breathtaking coastline along the Adriatic Sea, historical treasures, and vibrant culture, Croatia offers a captivating backdrop for any PEO endeavor. Its strategic location and well-developed infrastructure make it an ideal hub for businesses seeking to expand their operations and engage with a diverse talent pool. Croatia’s growing economy, fueled by tourism, manufacturing, and technology sectors, presents a wealth of opportunities for PEO ventures to thrive. Additionally, the country’s favorable business environment, competitive labor costs, and supportive government policies make it a desirable destination for companies looking to optimize player engagement, enhance customer experiences, and bolster their global presence.

What Is a PEO?

A PEO, or Professional Employer Organization, is a company that provides a range of HR and payroll services to small and medium-sized businesses. These services can include employee benefits, payroll, compliance with labor laws, and recruiting and training.

PEOs work by entering into a co-employment agreement with the businesses they serve. In this arrangement, the PEO becomes the employer of record for the business’s employees, taking on responsibilities such as payroll, tax withholding, and employee benefits. The business, however, retains control over its day-to-day operations and the supervision of its employees.

PEOs can help businesses streamline their HR and payroll processes, reduce costs, and free up time and resources to focus on their core business activities. They can also provide access to a range of benefits and resources that small businesses may not be able to afford or manage on their own.

PEOs are also understood as employer of record / EOR at times.

Croatia – Country Overview

The economy of Croatia is service-driven where services account for 70% of the total GDP while the industrial sector is facilitated by shipbuilding that constitutes more than 10% of export goods. The chemical industry and food processing also form a significant part of industrial output and exports. The industrial sector in Croatia accounts for 27% of total economic output while agriculture, fishing, and forestry account for 6%.


Croatian Kuna

Principal Language



Parliamentary, Representative Democratic Republic

Capital City


Major Cities

Split, Rijeka, Osijek, Zadar

Employment Contracts in Croatia

Employment contracts must be in writing and include at least the following information:

  • Names and addresses of the parties
  • Work position and job description
  • Place of work
  • Expected duration of an agreement (provided it is being entered into for a definite period)
  • First day of work
  • Notice periods
  • Duration of paid annual leave
  • Duration of basic work day or work week
  • Basic wage, wage increments and time of payment

Employees can be hired on probation but for not longer than 6 months. The minimum notice period during the probationary period is 7 days.

Working Hours in Croatia

Regular work schedule is limited to 40 hours a week. It can exceed 40 hours in a week if a full-time employee enters into an employment contract with another employer for extra work of up to 8 hours a week or 180 hours annually with the written consent from both employers. Employees who work for at least 6 hours per day or minor employees who work for 4.5 hours a day are entitled to a 30 minute rest period in a day. If the nature of work requires no interruption, the time and procedure for using a rest period are regulated by the employment contract.


Employers can ask employees to do overtime only when absolutely necessary and must provide a prior written request to employees for overtime. In case objective circumstances prevent employers from providing a written request, they are required to confirm the verbal request in writing within 7 days after overtime is announced. Overtime cannot exceed 50 hours a week or 180 hours a year unless specified in a collective agreement. Even if mentioned in a collective agreement, overtime work cannot be more than 250 hours annually.

Employee Leave in Croatia


In Croatia, the following 14 national holidays are observed:

  • Jan. 1: New Year’s Day
  • Jan. 6: Epiphany
  • Easter
  • Easter Monday
  • May 1: International Workers’ Day
  • Corpus Christi (60 days after Easter)
  • June 22: Fascist Resistance Day
  • June 25: National Day
  • Aug. 5: Homeland Thanksgiving Day
  • Aug. 15: Assumption
  • Oct. 8: Independence Day
  • Nov. 1: All Saints’ Day
  • Dec. 25: Christmas
  • Dec. 26: St. Stephen’s Day

Various unofficial holidays are observed across Croatia such as carnival celebrations held on the day before the Lent starts, which is also called “Shrove Tuesday.” Employees who work on a national holiday receive extra pay as negotiated in the bargaining agreement.

Annual Leave

Employees who work for 5 days a week are entitled to a minimum of 20 days of annual leave while those who work for 6 days a week are entitled to a minimum of 24 days of vacation. Employees and employers can agree to longer vacation periods through collective bargaining agreements, employment agreements, or agreements between a works council and an employer.

Employees are entitled to vacation pay equal to average monthly salary earned during the last 3 months. They are entitled to full vacation pay if they have been working for a minimum of 6 months, don’t waive their vacation rights or agree to compensation instead of taking the vacation. The unused vacation can be carried over to the next year but should be used by June 30. Exceptions are permitted in cases such as maternity or sick leave. In case of termination, employees are entitled to compensation in exchange for unused vacation.

Employees are required to notify their employees about the timing and duration of vacation at least 15 days in advance. Employees can take 1 vacation day whenever they want but should notify the employer at least 3 days in advance and provided that the employer doesn’t deny the request citing a valid reason.

Maternity Leave

Pregnant employees are entitled to 28 days of maternity leave before the date of childbirth. If any complications arise due to pregnancy, maternity leave can be taken 45 days before the childbirth.

After childbirth, mothers can take a postnatal leave until the child reaches the age of 6 months. Postnatal leave is split into mandatory and additional leave. Mandatory leave is for 70 days after childbirth and must be used by mothers. Additional leave starts on the 71st day after birth and extends up to 6 months. The father of the child can also use the remainder of maternity leave if the mother agrees. The maternity benefit is paid at the rate of 100% of the average salaries earned during last 6 months before the maternity leave commences, by the Croatian Institute for Health Insurance. Employers don’t bear any cost.

Paternity Leave

Fathers of newborn children can use additional maternity leave, starting on the 71st day after birth and lasting up to 6 months that mothers do not use and transfer to them.

Sick Leave

Employees can take a paid sick leave for no more than 3 years for a single illness. After taking sick leave for 6 months, employees are subject to sick leave review conducted by the Institute for Health Insurance. For the first 42 days of sick leave, employers pay compensation equal to 70% of the employee’s average salary over the last 6 months. After 42 days, compensation is paid by the Institute for Health Insurance.

Parental Leave

Parental leave starts after maternity leave ends and can be taken for 4 months for the first and second child or 15 months for twins, the third and every subsequent child by each parent.

Parental leave can be used:

  • In one period
  • In two periods of at least 30 days each
  • Part-time

The leave can be taken until the child reaches the age of 8. During vacation, parents receive 80% of the budget base for the initial 6 months and 50% after that. The benefit is paid from the state budget.


Ensuring compliance with employment laws

Staying compliant with in-country labor laws and regulations is mandatory, but nonetheless, many international employers fail to do so.

By bringing aboard a PEO, you as an international employer can continue doing business in Croatia while also managing a wide range of compliance requirements, including but not limited to Croatia income tax, Croatia tax rate on personal income, and Croatia corporate tax rate.

Payroll processing and tax filing

PEO services in Croatia come in every size and type.

Whatever professional employer organization in Croatia you opt in for, a PEO is best positioned to manage payroll as well as file and report taxes compliantly.

If you’re an international employer uninitiated in local laws and ways of hiring, a PEO makes your life easier.

Employee Benefits in Croatia

Pension and Social Security

Croatian social security benefits include health insurance, unemployment insurance, pension insurance, work injuries, and professional disease insurance.

The pension system in Croatia has three parts: the compulsory individual pension insurance, the generational solidarity system, and voluntary pension insurance. Insured employees are required to make contributions equal to 15% of their salaries to the generational solidarity system and 5% to the individual pension insurance system. The Croatian Institute for Pension Insurance organizes and incorporates the pension insurance system.

Health Insurance

Even though employees in Croatia have access to public healthcare, employers often provide additional health care coverage through private plans for optimal coverage. Employers contribute 15% for health insurance.

Unemployment Insurance

Employers contribute 1.7% for unemployment insurance.

Accident Insurance

Employer contribution for accident insurance is 0.5%.

Workers’ Compensation

Employees, under their employment agreements, are entitled to compensation for injuries and illnesses that occur in connection with or during the performance of work. The workers’ compensation also covers injuries that occur while commuting between workplace and home. Employers are required to pay 0.5% of covered payroll toward workers’ compensation benefits.

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