Starting from the beginning of 2026^th, several important amendments in legal regulations will come into force in Croatia that will directly affect salary levels (posing new challenges for employers), as well as the tax burden on citizens. These are regular adjustments that follow the growth of average salaries and economic indicators. Here is an overview of the most important updates applicable from January 1, 2026.

Minimum Wage

The Government of the Republic of Croatia has adopted the Decree on the Minimum Wage for 2026^th  (Official Gazette – NN 132/2025).

The mentioned increases will lead to higher net payments for those receiving the minimum wage. The exact increase in the net amount will depend on personal deductions, the number of supported household members, and the place of residence.

Minimum Wage for Directors, Board Members, and Craftsmen who keep business books (Income Tax Payers)

1. Director in an Employment Relationship (Employed Board Member)

For company directors and board members (employed either in their own or another company), and craftsmen who keep business books (income tax payers), the new minimum gross salary (for full-time work) in 2026^th will be:

• Gross I = 1,295.45 €

(The amount is calculated by multiplying the coefficient of 0.65 by the average gross salary in the Republic of Croatia paid in legal entities for the first three quarters – the period January–August of the previous year – which for 2025 amounted to 1,993.00 € according to the Croatian Bureau of Statistics, Official Gazette – NN No. 133./25).

• Total Cost (Gross II): 1,509.20 € (includes 16.5% health insurance contributions on top of the salary).

Note – If you are employed on a smaller gross amount (e.g., the minimum wage of 1,050 €), the Tax Administration will calculate the difference in contributions up to the prescribed threshold of 1,295.45 € via tax admin resolution at the end of the year.

2. Director NOT in an Employment Relationship (Insured as a Board Member) Such individuals are considered independent taxpayers for social contribution insurance (pension and health) according to the Tax Administration’s resolution and are obliged to pay contributions personally / at their own expense on the prescribed threshold of 1.295,45 €.

What if you work part-time? If you are employed as a director for, e.g., 20 hours per week (half-time), your gross salary can be 50% of the amount (approx. 647.73 €). However, the annual contribution obligation is not reduced, and at the end of the year, you will have to pay the difference in contributions up to the full threshold amount (1,295.45 €), i.e., as if you worked full-time, unless you were employed by another employer for the remaining time.

Minimum and Maximum Monthly Base for Contribution Calculation

• Minimum monthly base (all): 757.34 € (0.38 × average salary). This is the legal “minimum” below which contributions cannot be calculated for a person working full-time.
• Maximum monthly base: 11,958.00 € (6.0 × average salary). This is the legal “maximum” for the calculation of pension insurance contributions.

 Changes in Income Tax by Cities and Municipalities

From the New Year 2026^th, 13 local self-government units (JLS) are changing their income tax rates, we highlight some of them:

You can find more details in the codebook available on the Tax Administration website: https://porezna-uprava.gov.hr/hr/stope-godisnjeg-poreza-na-dohodak-za-2026-godinu/8166

Reminder – With the abolition of the local surtax (prirez) from 2024., local self-government units (JLS) were enabled to determine their own annual income tax rates. Their decisions are published in the Official Gazette no later than the end of November of the current year, come into force on January 1 of the following year, and apply until new decisions are made.

Units of Local Self-Government (JLS) independently determine the tax rate levels within the following ranges, depending on their status:

What do all these changes mean in practice?

For most employees, the changes will be visible in the salary for January 2026 (paid in February). If you live in one of the mentioned JLS that have made decisions to change tax rates, your net salary will change in accordance with the new rates.

Employers are required to adjust their calculations, and it is recommended to check with your accounting department or the Tax Administration how exactly these changes will affect your specific case.

These amendments are part of the regular alignment of the system with economic trends and do not bring radical changes at the national level, but they can affect the household budget depending on the place of residence and the level of income.

Author, Admin