Friday, 20 May 2022

Croatia's Average Monthly Pay for March Down 0.7% in Real Terms

ZAGREB, 20 May 2022 - The average net monthly salary paid in Croatia for March was HRK 7,607 (€1,014), which is an increase of 6.6 percent in nominal terms and a decrease of 0.7 percent in real terms compared with March 2021, the Croatian Bureau of Statistics said on Friday.

Compared with February 2022, the average pay increased by 2.1% in nominal terms and remained unchanged in real terms.

The median pay for March 2022 was HRK 6,352 (€847), meaning that half of the employees earned more than this amount and half earned less.

The highest average net monthly salary was paid out in the information and communication sector (HRK 15,360; €2,048) and the lowest in the security and investigation sector (HRK 4,867; €649).

(€1 = HRK 7.5)

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Thursday, 28 October 2021

Minimum Wage to Rise By 10.3% to €500 in 2022

ZAGREB, 28 Oct 2021 - Croatia's minimum wage for 2022 will be HRK 3,750 (€500), rising by 10.3%, and will thus be above 50% of the average net pay for the first time.

The government on Thursday adopted a regulation on the minimum wage after consultations with all social partners.

We have assessed that in the current circumstances, the minimum wage can be increased from HRK 3,400 to HRK 3,750, Prime Minister Andrej Plenković said.

He went on to say that the net minimum wage of €500 would concern 51,000 workers who now receive the minimum take-home pay.

This is for the first time that the net minimum wage will be above 50% of the average monthly wage, as it will reach 52.7% of that wage.

In August, the average monthly take-home pay was HRK 7,118 (€949), when the median wage was HRK 6,014. (€802).

The new minimum wage will be 60% of the median wage.

All of this is a great step forward, Plenković said, recalling that five years ago the minimum wage was 38% of the average wage.

Over the last five years, the minimum wage has risen by HRK 1,254, or four times more than during the terms of the previous three governments, Plenković underscored.

The gross minimum wage in 2022 will be HRK 4,687.50, Labour Ministry State Secretary Dragan Jelić said.

He informed the government that the average gross salary had risen during the first seven months of 2021 as against the corresponding period of 2020.

(€1= HRK 7.5)

For more, check out our politics section.

Thursday, 28 October 2021

Opposition Says Not Against Minimum Pay Rise, But Employers Shouldn't Pay for It

ZAGREB, 28 Oct 2021 - Opposition MPs said on Thursday, ahead of a debate on changes to the Minimum Wage Act, that nobody was against the minimum wage being raised but not in such a way to make employers cover the cost. 

Marin Lerotić of the Istrian Democratic Party (IDS) said his party was against employers covering the cost of a higher minimum wage, wondering when the serious discussion would begin about tax reliefs and stimulation of industries, notably export-oriented ones.

Davor Bernardić of the Social Democrats said PM Andrej Plenković's announcement of a HRK 350 increase in the minimum wage was a show, adding that people live poorly and noting that 200,000 people have left the Slavonia region.

Peđa Grbin of the Social Democratic Party (SDP) said that realistically, nobody could be against the PM's announcement but that the entire wage policy should be discussed.

Generally, wages are low, and when inflation is added to that, it is clear that not even the average wage suffices for a normal living, let alone the minimum wage, Grbin said.

Marija Selak Raspudić (Bridge) said the prime minister was "feeling generous" yet wanted somebody else to pay the bill. That is what the minimum wage bill is about, she said.

"If the prime minister really wants to be generous... he should raise the non-taxable income to HRK 5,000, as suggested by entrepreneurs," she said.

Katarina Peović of the Workers' Front said that the bill, under which the minimum wage would have to be agreed in its gross amount and employers who fail to do so would be penalized, would not bring anything good to 52,000 workers receiving the minimum wage.

The bill is unconstitutional and the amendments will only serve to improve the statistics, she said.

Hrvoje Zekanović of the Croatian Sovereignists said that employers were avoiding the government's measures, citing the example of a woman from Šibenik whose minimum wage did not increase at all after it was raised for the last two times. However, on paper her working hours were first reduced from eight to six and then to four, he said.

Employers are avoiding compliance with the government's measures by registering their workers as working six or four hours a day, so we are doing those workers a disservice instead of helping them, Zekanović said, calling the government's measures as 'cosmetic ones'.

Majda Burić of the ruling HDZ party said that the institute of minimum wage was a very sensitive one and had to be approached seriously, which, she said, the government was doing.

The gross minimum wage amounts to HRK 4,250, and the net amount is HRK 3,400, she said, adding that as of January 2022 the net amount would rise by HRK 350. Annually, that is an increase of 10.3%, the highest so far, she said.

She recalled that during the Andrej Plenković governments' terms in the past five years, the minimum wage had been raised by a gross amount of HRK 1,567 and a net amount of HRK 1,254.

During the term of the SDP-led government, it was raised by HRK 179, she said.

(€1 = HRK 7.521247)

For more, check out our politics section.

Thursday, 14 October 2021

Average Monthly Pay in Zagreb at €1,082

ZAGREB, 14 Oct 2021 - The average net pay in legal entities in Zagreb in July 2021 was HRK 8,130 (€1,082), an increase of 5.4% from July 2020, according to data from the city department for strategic planning and development.

The average wage in the capital city was HRK 1,084 higher than the national average, which totaled HRK 7,046.

The highest average monthly net pay in legal entities in Zagreb was paid in oil and natural gas extraction (HRK 13,259) and the lowest in the production of leather and related products (HRK 4,412).

The average monthly gross pay in legal entities in Zagreb in July this year was HRK 11,257, an increase of 3.2% from July 2020.

(€1 = HRK 7.510550)

For more, make sure to check out our dedicated business section.

Wednesday, 16 June 2021

Labour Costs in Croatia Grow For First Time Since Pandemic Started

ZAGREB, 16 June, 2021 - Slower salary growth halted the growth of hourly labour costs in the EU in the first quarter of 2021, while in Croatia labour costs increased for the first time since the start of the pandemic, Eurostat data show on Wednesday.

In the first quarter of 2021, the hourly labour costs rose by 1.7% in the EU, compared with the same quarter of the previous year. In the fourth quarter of 2020, hourly labour costs increased by 3.2%.

The costs of hourly wages and salaries increased by 2.6%, after growing 3.8% in Q4 2020.

The costs of salaries increased the most in arts, entertainment and recreation (+8.3%), followed by accommodation and food service activities (+6.1%).

The costs of contributions at the start of this year went up 1%.

The highest increases in hourly labour costs in Q1 2021 were registered in Lithuania (+12%) and Slovenia (+11.1%), while the lowest were in Austria (+0.3%) and Belgium (+0.9%).

In Croatia, they went up 2.3%, for the first time since Q2 2020. In Q4 2020, they dropped 1.1%. The costs of hourly wages and salaries increased 2.3% after falling 0.2% at the end of last year. The costs of contributions went up 2.2%, after falling 6.4% at the end of 2020.

The largest decrease in hourly labour costs in Q1 2021 was registered in Malta (-2.6%), followed by Ireland (-2.5%).

For more about business in Croatia, follow TCN's dedicated page.

Thursday, 20 May 2021

Average Wage Earned in Croatia in March Totals HRK 7,138

ZAGREB, 20 May 2021 - Croatia's take-home pay in March came to HRK 7,138, rising 6.3% on the year in the nominal terms and five percent in the real terms, according to the data released by the national statistical office on Thursday (DZS).

The average wage in March rose by 1.4% in the nominal terms and o.3% in the real terms in comparison to February 2021.

The DZS says on its website that "the highest average monthly paid off net earnings per person in paid employment in legal entities for March 2021 were paid off in Information service activities and amounted to 13 237 kuna, while the lowest earnings were paid off in the activity Manufacture of wearing apparel and amounted to 4 387 kuna."

Median net earnings for March 2021 amounted to 6,000 kuna, while median gross earnings amounted to 7 728 kuna. It means that half of the people employed were paid less and the other half more than this net amount.

(€1 = HRK 7.5)

For more about business in Croatia, follow TCN's dedicated page.

Friday, 18 December 2020

PM Says Salaries, Pensions Won't Come Into Question

ZAGREB, Dec 18, 2020 - Prime Minister Andrej Plenkovic said on Friday that regardless of the duration of the COVID-19 crisis, salaries and pensions would not come into question and that job-retention measures would remain in force as long as necessary.

He was asked by the press how long the current lockdown could last without salaries and pensions coming into questions. "They haven't this year, they won't the next either. Salaries will be here, pensions will be here, we'll retain jobs."

Plenkovic said they would do everything that a responsible government and state should do, and which proved to be good, in these particular circumstances.

"The next six months are key. If we look at the experience from last spring, when the weather gets a little warmer, the epidemic likely won't be as strong as it is today. Secondly, the vaccine will come and we will vaccinate our citizens, showing resilience to the further spread of the infection."

He said the government would find the money for job-retention measures as long as they were necessary, while at the same time working on economic recovery and resilience as well as investment.

The government will use this opportunity to reset Croatia for a digital and green transition and to invest in the fourth industrial revolution, while at the same time preventing deep inequality in society and other crises, Plenkovic said. "That's the responsibility of the government and the state, and we will stand behind that. Everything we have done so far has been in line with that."

Commenting on central bank forecasts, he said this time of holiday shopping was important for the functioning of the state, adding that the COVID-19 measures were balanced.

The central bank estimated yesterday that real GDP could drop by 8.9% this year, up from the 8% drop estimated in mid-October, and rebound by 5% in 2021, down from the estimated 5.2%.

The central bank does not expect GDP to reach the pre-crisis level next year but in 2022. If the COVID situation is not put under control by the end of March 2021 and some parts of the economy need to remain locked, the estimate is that the pre-crisis level could be achieved only in 2023.

Monday, 9 November 2020

Majority of Salaries Will be Taxed 20%, Says Daily

ZAGREB, November 9, 2020 - As of next year, Croatia will tax a majority of salaries only 20%, plus local tax, which is four percentage points less than now, Vecernji List daily said on Monday.

The government believes this change will reduce the tax burden on salaries by HRK 2 billion annually, the paper said.

How much each employed person will benefit from the cut depends on their gross salary and deductions for children and other dependent family members.

Income tax is paid by all employed persons as well as the jobless who do part-time work and pensioners whose allowance exceeds HRK 4,000.

Finance Minister Zdravko Maric says two-thirds of those liable for income tax actually do not pay it because their income is below the taxation threshold when deductions for dependent family members are added to their non-taxable monthly income (HRK 4,000) .

Those not paying income tax cannot expect anything from the tax rate cuts going into force as of January 1, which has been a source of numerous frustrations and dissatisfaction for a long time. From every salary, regardless of its amount, is first deducted 20% for pension contributions, while the rest is considered as income. Those whose gross salary is below HRK 5,000 do not pay income tax, only HRK 1,000 for pension contributions.

Additional deductions make the difference even more pronounced. If a worker with a gross salary of over HRK 10,000 has two children who bring an additional HRK 4,250 in tax deductions, there is nothing to deduct, so they cannot expect the reduction of the income tax rate to 20% will result in a higher salary as of January 1.

Children and dependent family members bring big deductions due to which parents with two or more children generally do not pay income tax. Reducing the income tax rate from 24 to 20% could result, for an employed Zagreb resident with an average gross salary of HRK 9,200 without children or dependents, in a HRK 160 higher monthly salary as of January 1, Vecernji List said.

(€1 = HRK 7.5)