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Exemption of payment of contributions for young people

RIGHT TO EXEMPTION OF PAYMENT OF CONTRIBUTIONS FOR YOUNG PEOPLE

According to the Contributions Act (Official Gazette, 84/08, 152/08, 94/09, 18/11, 22/12, 144/12, 148/13, 41/14, 143/14, 115/16, 106/18, hereinafter: the Act), employer who enters into a contract of indefinite duration with the young person shall accrue (for a period not exceeding five years)only the following contributions from the tax base:

  • pension insurance contributions – at a rate of 20%, or at a rate of 15% for the policyholder of pension insurance based on individual capitalized savings
  • pension insurance contributions- based on individual capitalized savings (for the policyholder of that insurance) – at a rate of 5%,

or in the said period of up to 5 years will not be the obliged to calculate and pay contributions on the tax base, as follows:

  • contribution to health insurance at a rate of 16.5%

A young person is a natural person

  • whom the employer on the basis of the employment contract concluded for an indefinite period registers for the mandatory pension insurance and mandatory health insurance, and
  • whom to the date of commencement of insurance is less than 30 years of age, and
  • whom up to the date of employment agreements had no previous employment contract of indefinite duration with the same employer.

These provisions of the Act apply to the insured persons on the basis of employment and the insured persons on the basis of employment – posting of workers.

It is necessary:

  1. that the employment contract is entered into with a person below 30 years of age, and
  2. that the employment contract is concluded for an indefinite period, and
  3. that young people below 30 years of age did not already have an employment contract of indefinite duration with the same employer.

Competent institution:
Ministry of Finance
Tax Administration
01 480 9000