Employer of Record is a concept that implies that Profesio is the legal Employer for Employees on territory of Croatia.
It allows our clients to compliantly expand their workforce to Croatia without setting up a business entity.
Profesio as Employer of record is a third-party organisation contracted to take responsibility for paying employees. This includes dealing with payroll, taxes, visa and sponsorship applications, benefits and insurances.
Profesio hires your employees but you keep their day to day organisation.
Here is the procedure and service included:
- Local registrations of employees
- Creating, maintaining and rolling out employment contracts under our company name
- Employee onboarding
- Collecting and processing timesheets
- Filing taxes
- Completing all required compliance according to local labor law
- Offering and administering benefits and bonuses if requested by clients
- Terminating employees
- Single point of contact and supporting you as our client in whole process
Payroll policies are based on Croatian Labour law, Croatian Personal income tax law, and Croatian Regulations of Personal income tax (which prescribe in more details Personal income tax law).
When paying salary Employers are obliged to withhold the mandatory pension fund contributions, taxes and surtaxes from the salary of employees working in Croatia. Pension fund contributions are divided in two categories. First is 15% and the second is 5% of the gross salary. Both categories ara mandatory for payment by Employer.
Taxes are calculated based on the income (gross salary reduced by the pension fund contributions) reduced by the personal deductions. Surtaxes are fixed as percantage of the taxes, in amount which is defined by the local municipality and can be be between 0% and 18%. Biggest surtrax of 18% is fopr Employees living in Zagreb, the capital of Croatia.If the Employee is 30 or older, Employer has to pay additionally Health Care contributions In amount of 16,5% of the gross1 salary.
All salary contributions have to be calculated at the same time as the salary and are due at the same time as the salary payment, which is until 15th in the month for the previous month.
If you are interested in the calculation of salary, contributions and taxes, send us request and we will make you a free calculation.