The Labour Act stipulates the obligation to determine a gross salary which must be specified in the employment contract and which the employer pays the worker for work performed. Also, the provisions of law determine the minimum gross salary an employer must pay a worker for performed work.
For difficult working conditions, overtime and night work, and work on Sundays, holidays or any other day which the law stipulates is a day off, the worker is entitled to an increased salary.
The average monthly gross salary per employee in legal entities in the Republic of Croatia for 2024 was EUR 1,821.00, while in the period I-X 2025, it amounted to EUR 2,002.00. The prescribed minimum gross salary for 2026 is EUR 1,050.00.
A worker who receives a salary is obliged to pay income tax and salary contributions. The employer is obliged to calculate, retain and pay these benefits on the worker’s behalf.
Salary is calculated pursuant to the provisions of the Labour Act, Income Tax Act, the Ordinance on Income Tax, the Contributions Act, and other regulations.
The following is an example of how a salary is calculated in the City of Zagreb:
| GROSS 2 | Amount | 2,578.15 EUR |
|---|---|---|
| Salary contributions (health insurance 16.5%) | 365.15 EUR | |
| GROSS 1 | Amount | 2,213.00 EUR |
| Salary contributions (1st pillar of pension insurance 15% and 2nd pillar of pension insurance 5%) | 442.60 EUR | |
| INCOME | Amount | 1,770.40 EUR |
| Basic deduction* | 600.00 EUR | |
| Taxable income | 1,170.40 EUR | |
| Tax (23%**) on income below EUR 5,000.00 per month | 269.19 EUR | |
| Tax (33%**) on income above EUR 5,000.00 per month | 0 EUR | |
| Total tax | 269.19 EUR | |
| NET SALARY | Amount | 1,501.21 EUR |
* The taxpayer’s personal deduction is the basic personal deduction increased by the parts and amounts of the personal deduction to which the taxpayer is entitled under the conditions prescribed by the Income Tax Act
** The rates depend on the place of residence/habitual residence of the taxpayer.
An employer who enters into an indefinite employment contract with a person who is being employed for the first time, or who does not have a recorded pension history before the start of insurance, is required to calculate only pension insurance contributions for a period of one year. Thus, within the specified period of one year, there is no obligation to pay health insurance contribution at the rate of 16.5% for the mentioned employees.
Contributions Act (OG 84/08, 152/08, 94/09, 18/11, 22/12, 144/12, 148/13, 41/14, 143/14, 115/16, 106/18, 33/23, 114/23, 152/24)
Likewise, there is a reduced tax liability by 100% for young people up to 25 years of age and by 50% for young people from 26 to 30 years of age for a salary up to an annual basis of EUR 60,000.00, hence:
Additionally, Croatian returnees or descendants of emigrants are exempt from paying income tax for five years under the condition that they have resided abroad continuously for two years.
Income Tax Act (OG 115/16, 106/18, 121/19, 32/20, 138/20, 151/22, 114/23, 152/24)
