02.10.2020
What are the costs of labour and living in Croatia?
If you were planning on starting a business and living in Croatia, we recommend to scroll down and find out what are the costs of labour and living in the vibrant city of Rijeka.

Were you wondering what are the costs of labour and living in Croatia? A decision about moving to a new country is not an easy one. It takes a lot of time and effort to gather all necessary information about the costs of labour and living in a certain city.

To make it easier for you, Aestus accounting team made a minimum salary cost breakdown for a company manager working and living in the city of Rijeka. Also, we created a simple comparison table of monthly living costs in Rijeka and Zagreb.

 

Minimum salary cost for a company manager in Rijeka (in kunas)

 

Gross 1

5.682,30

I. pillar of pension insurance

15.00%

852,35

II. pillar of pension insurance

5.00%

284,12

Total gross contributions

20.00%

1.136,46

Total tax relief

4.000,00

Taxable income

545,84

Total income tax

24.00%

131,00

Total surtax

15.00%

19,65

Total tax and surtax

150,65

Gross 2

6.619,88

Health insurance contribution

16.50%

937,58

Total gross contributions

937,58

Net salary

4,395,19

 

Source: www.moj-posao.hr

If you plan on hiring additional employees, it is important to notice that the Minimum Wage Act defines the lowest gross monthly salary a worker is entitled to for a full-time work. In the year 2020. it amounts to 4.062, 51 kunas.

In addition, there are other expenses that occur in almost every business:

  • daily allowance for domestic business travel/field work – up to 200,00 kunas per diem,
  • compensation for the use of a private vehicle for business purposes, including local transportation – 2,00 kunas per kilometre,
  • meal expenses – max 5.000,00 kunas per employee per year,
  • employee reward – max 5.000,00 kunas per employee per year,
  • holiday reward – 3.000,00 kunas per employee per year,
  • other compensations for similar material costs.

 

Keep in mind that these compensations are not mandatory and depend solely on the decision of the company’s director.

Also, most of the mentioned costs are tax-free. However, entrepreneurs should be familiar with the tax regulation conditions when conducting these payments. That is why we recommend hiring a professional accountant team to help you optimize your costs while keeping your business in line with the tax laws.

Equally important, in the Republic of Croatia, profit tax rate amounts to 12% for companies with a turnover up to 7.500.000,00 HRK (approximately 1.000.000,00 EUR) per year and 18% for companies with a turnover exceeding that amount.

 

With high quality of life and EU membership, Croatia is becoming an increasingly popular destination for expats and remote workers. A group of foreign entrepreneurs is working with the Croatian government on introducing digital nomad visa. To help you with making a decision, we summed up average costs of living in Zagreb, the capital, and Rijeka, blooming business destination.

Monthly living costs in Zagreb and Rijeka (in kunas)

 

ZAGREB RIJEKA
Apartment (1 bedroom) in the City Centre 3.580,00 2.525,00
Basic costs (Electricity, Heating, Water, Garbage) for an 85m² Apartment 1.240,00 1.125,00
Internet (200 Mbit/s, Unlimited Data, Cable/ADSL) 180,00 180,00
Food Expenses (Bread, Milk, Meat, Fruit, Drink etc.) 1.000,00 1.000,00
Food and drinks in Restaurants 800,00 720,00
Monthly Transport Pass (Regular Price) 400,00 276,00
TOTAL COST 7.200,00 5.826,00

 

Finally, we hope we provided you with useful information. Should you need any additional information or advice on starting a business, feel free to reach out to our accounting team via our email address [email protected] or simply by filling out our contact form.

Still not sure about wether to start a business in Croatia? Check out our latest post How to start a business in Croatia in 5 steps.

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