Posted workers in the EU: Employees from Croatia

Posted workers in the EU: Employees from Croatia

3 min.

Companies from the other EU Member States wishing to use the services of a worker employed in Croatia must be aware of specific requirements and regulations, for example the duration of the posting.

According to the provisions of the European Union (which also apply to members of the European Economic Area), the legislation of one Member State also applies to posted workers in the other areas, which means that an employee posted from the Republic of Croatia remains in Croatia’s social security system. Membership of the social security system is confirmed by Certificate A1, issued by the Croatian Pension Insurance Institute under the following conditions:

  1. The posting does not last longer than 24 months
  2. The employee is not posted to replace another posted employee
  3. The legislation of the Republic of Croatia applied to the posted employee for at least one month immediately before posting, meaning that the posted employee must have worked in Croatia for at least a month.
  4. The employer regularly carries out his activity in that member state
  5. There is a direct connection between the employee and the employer during the duration of the posting

Before posting an employee to another Member State, the employer must fill out the form for registration/deregistration of insured persons and submit it to the Croatian Health Insurance Fund. The employer is also obliged to submit a photocopy of the employment contract, an order on the posting of the insured person to another Member State, and a medical certificate for the insured person’s health, for whom the employer must obtain a European health insurance card, explain the Ecovis experts.

We will clarify the details for you if you wish to use the services of posted workers from Croatia.
Mihael Gruičić, Payroll specialist, ECOVIS FINUM, Zagreb, Croatia

Calculating gross wages and taxes correctly

The gross salary, and therefore the basis on which the employer pays contributions in the Republic of Croatia, is calculated as the maximum gross salary that the employee would earn working in the same or a similar job in the Republic of Croatia, increased by 20%.

The general rule is that salary is taxed in the country where the work is performed. However, the country from which the employee is posted (Croatia) may tax posted employee’s salary if the following three conditions are met:

  • if the employee does not stay in the other country for more than 183 days in a 12-month period
  • employee’s salary is paid by his employer, a non-resident of the country of posting
  • the costs are not charged to the permanent establishment or headquarters in the country of posting

If any of these conditions are not met, the right of taxing the posted employee’s salary has the country to which the employee is posted.

For further information please contact:

Mihael Gruičić, Payroll specialist, ECOVIS FINUM, Zagreb, Croatia

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