Wages have generally risen, but there are still enormous wage differences between the Croatian public sector and the private one.
As Poslovni Dnevnik/VL/Ljubica Gataric writes, the average net salary paid out in Croatia in November was 1,340 euros. In the City of Zagreb, it stood at 1,515 euros. These are the approximate monthly amounts with which most employees will start this year.
The first salary that employees receive in January will be taxed according to new tax rules, the most important of which is the increase in personal deductions from 560 to 600 euros, which will bring an increase in salaries by about eight euros.
Zagreb salaries could jump an additional four to five euros after March, along with an increase in personal deductions of 12 to 15 euros. That will be as a result of the upper income tax rate limit. Due to these new limits, the powers that be in Zagreb will have to lower income tax by 0.6% by the end of February. The higher the salary paid out, the greater the increase will be.
Higher salaries above 6,000 euros will increase by about 200 euros because the state intervened in this area, increasing the threshold above which the higher income tax rate of 30% applies. The increase in the threshold for the taxation of higher salaries will be felt by over 10,000 managers, politicians, and doctors who are mostly residents of Zagreb. This is because the capital is where the concentration of the highest salaries in the country can be found.
The majority of employees (approximately 70%), earn less than average, and analyses reveal that recently lower salaries have been growing almost twice as fast as middle and higher salaries. That’s due to the increase in the minimum wage, and a similar difference in the dynamics of salary increases has been established in the Croatian public sector when compared to the private sector.
The minimum wage for January (with the first payment under the new system in February) is set to increase by 15.5 percent to 970 euros gross. Even the Croatian public sector hasn’t managed to reach sort of increase, meaning that this year, salaries in the Croatian public sector will increase twice by 3%, from March and October. What the private sector’s salary policy will be this year will not be known until March, when the first official data on salaries for this year is expected.
The private sector has stagnated with salaries for the past six months. The Croatian Employers’ Association (HUP) has published an estimate that average salaries will increase by around 7 percent this year. That will be primarily influenced by wage trends across the Croatian public sector and the increase in the minimum wage. Croatia’s average salaries remain two and a half times less than the average income in the rest of the Eurozone.
An analysis by Danijel Nestić from the Institute of Economics showed that in the last two years, more specifically from June 2022 to June 2024, the average gross salary earned in the Croatian public sector increased by a staggering 47.5%.
On the other hand, in the business sector, the increase in the average gross salary in the first year was 12.3%, in the second 10.4% and in the two years in total – 23.9%.
