Remote work in Croatia: the Labour Act rules and the home-office allowance

Croatia’s Labour Act (Zakon o radu) has recognised two separate forms of working away from the employer’s premises since 1 January 2023, and the dividing line is simple: who decides where the work happens. Under rad na izdvojenom mjestu rada, usually translated as work at a separate place of work, the employee works from a place agreed with the employer, most often home. Under rad na daljinu, remote work in the narrow legal sense, the work is done through information and communication technology from wherever the employee chooses.

The difference is more than vocabulary. The first regime comes with mandatory cost reimbursement and closer rules on equipment; the second leaves those points largely to agreement. A hire who will work from a flat in Zagreb four days a week is in the first category. A developer who wants to spend the winter in Split and the summer on Hvar, with your blessing, fits the second.

Either arrangement can be permanent, temporary or occasional, as the parties agree. Neither is available for jobs with special risk conditions, where the work cannot safely be done outside controlled premises. And in emergencies such as an epidemic, an earthquake or a flood, the employer may agree home working without changing the contract, but if the situation lasts beyond 30 days it must offer a proper contractual arrangement.

The choice should be written down at the start. Article 15 already allows the parties to agree that the employee freely chooses the place of work, and that clause, or its absence, is usually what tells you which regime applies. Our guide to the content of a Croatian employment contract covers the other items that sit alongside it.

Article 17.a adds a set of points that a contract for work at a separate place must address, on top of the usual twelve items. They are:

• how the work is organised and when the employee is available
• how working time is recorded
• the equipment needed for the job, and who supplies and maintains it
• reimbursement of the costs of working away from the premises
• the employee’s participation rights at the workplace
• how long the arrangement lasts, if it is not permanent

Cost reimbursement is compulsory where the arrangement is permanent or covers more than seven working days a month, unless the parties agree terms that are more favourable to the employee. For remote work in the free-location sense, the equipment and cost items are optional and depend on what the parties agree.

A practical tip: define the equipment list in an annex rather than the main contract. Laptops, monitors and headsets change every few years, and an annex can be updated by both sides without reopening the entire contract each time.

The cleanest way to cover home-working costs in Croatia is the tax-free lump sum set by the Income Tax Rules: up to €4 for each day worked from home, with a ceiling of €70 a month. Paid within those limits, it carries no income tax and no contributions, so the full amount reaches the employee and the employer adds nothing on top.

The arithmetic is quick. An employee who works from home on 15 days in a month can receive €60 tax-free. One who works from home every working day, typically around 20 to 22 days, reaches the €70 cap well before the end of the month. Anything paid above the cap is taxed and carries contributions in the same way as salary, which means the employer would add 16.5% on that excess.

The allowance is still unusual in practice. Tax Administration (Porezna uprava) data for 2025 show work-from-home lump sums paid to 23,283 recipients, against more than a million people who received a tax-free meal allowance. Offering it is therefore a small but visible signal to a candidate that you have thought about how the job will actually work. The full list of non-taxable payments is on the Porezna uprava website.

Keep the two ideas apart when drafting. The €4 figure is the limit for tax-free treatment. What the employer owes comes from Article 17.b: reimbursement of costs in the amount fixed by a collective agreement or the employment contract. Setting the contractual amount at or below the tax-free ceiling keeps the payment simple for everyone.

An employee working from home or remotely has the same pay and rights as one doing comparable work on the employer’s premises (Article 17.b). The rules on working time, overtime, night work and breaks all apply in full, which means the 40-hour week, the 50-hour ceiling with overtime and the daily and weekly rest periods follow the employee into the spare room.

The Labour Act’s principle of non-availability matters more for home workers than for anyone. Outside working time and during leave, the employee is not expected to be reachable unless there is an urgent need or it has been agreed. If your team spans time zones, say in the contract which hours count as working time and what happens with calls outside them.

The employer’s access to the employee’s home is limited. Visits to check working conditions are allowed only if the contract provides for them and only at agreed times, so a health and safety review needs to be planned with the employee, not sprung on them.

Employees can also ask for home working. Someone with health reasons, a pregnancy, a child under 8 or caring responsibilities may request temporary work at a separate place, and the employer has 15 days to answer in writing, giving its reasons. Refusing is allowed, but the reasons have to stand up.

Working from home does not loosen the employer’s record-keeping duties. Article 5 of the Labour Act requires records of workers and their working time, and the contract for a home or remote worker has to say how that time is recorded. A simple log in the tools the team already uses is usually enough, provided it shows start and finish times and any overtime.

Scheduling rules travel with the employee too. Employees must see their schedule a minimum of seven days before it applies, and overtime still needs a written request, with an oral instruction confirmed in writing within seven days. For a distributed team that means a late call with a colleague in another time zone is either part of the agreed hours or overtime, and it should be recorded as one or the other.

Late calls also raise the night-work rules. Night work in Croatia is work between 22:00 and 06:00, and anyone who regularly works at least three hours in that window is a night worker, with limits on average hours. Night work, like Sunday work, must be paid at an increased rate, and the Sunday supplement is at least 50%. If your headquarters is several hours behind Croatia, design meeting times so that they do not quietly turn a day job into night work.

Remote work in the free-location sense raises a question the Labour Act alone does not answer: what happens when the employee works from another country for a while? Posting an employee outside Croatia for over four weeks triggers extra written terms in the contract before the stay begins, under Article 18. Short trips do not, but they still need to be tracked.

Social security follows the EU coordination rules in Regulation 883/2004. In broad terms, contributions are owed where the work is done; someone who works regularly in more than one EU state may stay insured in the state of residence if a substantial part, 25% or more, of the work is done there; and postings of up to 24 months can keep the employee in the Croatian system. Which state’s law applies is a decision for the Croatian Pension Insurance Institute (HZMO).

Tax is a separate question. A Croatian tax resident is someone whose domicile or habitual residence is in Croatia; a person with neither is a non-resident and is taxed in Croatia only on Croatian-source income. A long stay elsewhere can therefore change where the employee pays income tax, even if social security stays Croatian.

The digital nomad stay causes confusion here. That status is for non-EU nationals working remotely for a company that holds no registration in the country and whose customers are not Croatian employers. A digital nomad therefore cannot be employed by a Croatian employer, and the permit is not a way to hire someone on a Croatian contract.

With an employer of record, the remote or home-working terms are part of the Croatian contract we sign as the legal employer. We draft the Article 17.a clauses from what you tell us about the role, run the €4 a day allowance through payroll if you choose to pay it, and report it correctly on the monthly JOPPD.

What stays with you is the working arrangement itself: which days the person is expected in an office, if any, the equipment you want to provide, and how you manage availability across time zones. Decide those before the offer goes out, because they end up in the contract and are harder to change later.

Remote roles often involve software, designs or other work that you will want to own outright. Croatian law gives the employer broad rights to copyright works and computer programs created in employment, but it is worth reading our guide to IP and non-competes for Croatian staff before you finalise the contract.

If you are comparing providers for a distributed team, ask each one how it handles the separate-place clauses, the allowance and stays abroad; those questions are part of our checklist on picking an EOR for Croatian hires. For the scope of what we do, see the services we provide in Croatia; to talk through a specific role, the front page of Employer of Record Croatia has the contact routes. Bring the expected split between home and office days, the time zones involved and any equipment budget, and the contract terms can be drafted around them from the first version.

Q01What is the difference between rad na izdvojenom mjestu rada and rad na daljinu?+

A.Under rad na izdvojenom mjestu rada the employee works from a place agreed with the employer, usually home. Under rad na daljinu the employee chooses the location freely and works through ICT. Cost reimbursement is mandatory only in the first case where the arrangement is permanent or exceeds seven working days a month.

Q02What is the tax-free home-working lump sum in Croatia for 2026?+

A.Up to €4 for each day worked from home, with a maximum of €70 a month. Amounts above that are taxed and carry contributions like salary.

Q03Does a Croatian employer have to consider a request for home working?+

A.Yes, temporarily, for reasons such as health, pregnancy, caring duties or a child under 8. The employer must reply in writing with reasons within 15 days.

Q04Do working-time rules apply to remote employees in Croatia?+

A.Yes. The 40-hour week, the overtime limits, night work rules, breaks and rest periods all apply to home and remote work, along with the principle of non-availability outside working hours.

Q05Can someone on a Croatian digital nomad permit be hired on a Croatian contract?+

A.No. The digital nomad stay is limited to people working for a company without Croatian registration, so it cannot be used for employment by a Croatian employer.