Payroll in Croatia 2026: contributions, income tax and JOPPD

In Croatia the employer withholds the employee's 20% pension contributions and the income tax from each salary and pays them to the state together with the net pay. On top of gross salary the employer pays a 16.5% health insurance contribution, so a gross salary of €2,000 costs the employer €2,330 a month.

Payroll in Croatia at a glance

Social security contributions

Croatian payroll has one set of employee contributions, for pension insurance, and one employer contribution, for health insurance. Both are charged on gross salary.

An employee insured only in pillar I pays the full 20% into pillar I. For 2026 the Official Gazette (Narodne novine 150/2025) sets these limits, based on an average wage of €1,993:

• Minimum monthly base: €757.34 (0.38 × the average wage). A full-time employee paid less still pays all contributions on this base; part-time workers pro rata.
• Maximum monthly base: €11,958 (6 × the average wage), and €143,496 a year. The maximum applies only to the pension contributions; health insurance has no ceiling.

Low-wage relief. Since December 2023 the pillar I base is reduced for lower salaries: by a fixed €300 when total gross pay for the month is up to €700, and by 0.5 × (€1,300 − gross pay) between €700.01 and €1,300. Above €1,300 there is no reduction. At the 2026 minimum wage of €1,050 the base falls by €125. The relief applies to full-time and part-time workers alike, and the employee's pension rights are not reduced.

Some occupations with an extended insurance period, and some special categories of insured persons, carry additional contributions; the Tax Administration's salary page explains the general rules.

Income tax on salaries

Income tax (porez na dohodak) is withheld at each payment, under the rules in force on the day of payment. The monthly tax base is gross salary minus the employee's pension contributions minus the personal allowance.

Local rates instead of surtax. Since 1 January 2024 the local surtax (prirez) no longer exists. Instead, the council of each city or municipality sets its own lower and higher income tax rate within ranges set by law:

The lower rate applies to an annual tax base of up to €60,000, which in monthly payroll means up to €5,000 of monthly tax base; the higher rate applies above that. A unit that has not adopted its own decision uses 20% and 30%. Zagreb applies 23% and 33% in 2026. The rate depends on where the employee lives, not where the company is registered, so check the Tax Administration's table of local rates for each employee.

Allowances. The basic personal allowance is €600 a month. Dependants increase it by a coefficient of €600: 0.5 (€300) for a dependent family member or the first child, 0.7 (€420) for the second child, 1.0 (€600) for the third, rising for further children; disability adds 0.3 (€180), or 1.0 for 100% disability.

Young employees. Income tax is reduced by 100% for people up to 25 and by 50% for people aged 26 to 30, on salary up to an annual base of €60,000. This relief is given in the annual tax calculation, not in monthly payroll.

Minimum wage, working time and mandatory pay

The minimum wage for 1 January to 31 December 2026 is €1,050 gross a month (Government decree, Narodne novine 132/2025). The amount for 2027 is set by government decree by 31 October 2026; it had not been adopted when this guide was written.

Under the Labour Act, salary and other payments are paid into the employee's bank account, on the dates set by the collective agreement or employment contract, and at the latest on the 15th of the current month for the previous month.

Premiums. Work on Sundays must be paid at least 50% more per hour. Premiums for overtime, night work, public holidays and difficult conditions are set by the collective agreement, the employer's work rules or the employment contract.

Bonuses. Croatian law has no statutory 13th salary; a Christmas bonus (božićnica) or holiday allowance (regres) is due only if a collective agreement or contract provides it. Several payments are free of tax and contributions up to annual limits in 2026, including:

• occasional bonuses such as the Christmas bonus and holiday allowance: up to €700 a year
• performance bonuses: up to €1,200 a year
• a flat-rate meal allowance: up to €1,200 a year
• a gift to a child under 15: up to €140 a year

Monthly payroll calendar and filings

1. 1Register each employee with the pension insurance institute (HZMO) before they start work (at the earliest eight days before), and report terminations and changes within 24 hours. Health insurance (HZZO) registrations and changes are due within eight days, by electronic e-prijava.
2. 2Pay the salary by the 15th of the following month at the latest.
3. 3Withhold and pay income tax and contributions with the salary: contributions fall due together with the payment of the salary.
4. 4File the JOPPD report with the Tax Administration through ePorezna on the day of payment, or at the latest the next working day.
5. 5Hand over the payslip (obračun plaće) within 15 days of payment.

What a payslip must show. The Labour Act and the rulebook on payslip content (Narodne novine 68/2023) require the employer's and employee's details including OIB and IBAN, the period, hours by type (regular, overtime, night, Sunday, public holiday, standby, leave and sick leave), the contribution base, contributions, income, the tax advance with the personal allowance, tax base and rates, employer contributions, deductions, net pay and the payment date. If salary is not paid on time, the employer must give the employee a statement of the unpaid amount by the end of the month; that statement is an enforceable document.

Records. The Accounting Act requires payslips to be kept for at least six years and the analytical payroll records on which contributions are paid permanently.

Worked example: €2,000 a month in Zagreb

An employee in Zagreb earns €2,000 gross a month, is single, has no dependants, is over 30 and is insured in pillars I and II.

The same employee living in a municipality that uses the default 20% rate would pay €200 of tax and take home €1,400. Because the salary is above €1,300, no low-wage relief applies.

Common mistakes

1. 1Using the company's location for the tax rate. The rate comes from the employee's place of residence, and each local unit can change it from 1 January.
2. 2Forgetting the low-wage relief for salaries up to €1,300, or applying it without checking pay from other employers.
3. 3Applying the young-person relief in monthly payroll. It is granted in the annual tax calculation.
4. 4Paying after the 15th, or paying contributions separately from the salary.
5. 5Registering the employee late. Pension insurance registration must be done before the first working day.
6. 6Treating the Christmas bonus as fully tax-free. Only the first €700 a year of occasional bonuses is exempt.

How Clientlly helps

Clientlly does not ship a built-in payroll profile for Croatia. An administrator enters Croatia's payroll rates once in the payroll tax settings: the income-tax bands, the personal allowance, the employee and employer contribution rates and the minimum wage. Clientlly then calculates gross to net and the employer contributions and produces payslips. Local rates that differ by place of residence, the low-wage pension relief and dependants' allowances should be checked for each employee.

Alongside payroll, the human resources module handles leave requests and approvals with a leave calendar and keeps HR documents, and attendance and time tracking records working hours and overtime, including Sunday work.