Gov't increases minimum wage

The Croatian government on Thursday adopted a regulation increasing the minimum wage by 5% or a gross amount of HRK 163 (net amount of HRK 131) so in 2018 the minimum wage will amount to 42.9% of the average wage.

The government-sponsored amendments to the Minimum Wage Act also envisage extra payments for work on Sundays and holidays and for overtime work.

As a measure to compensate employers for the increase in the minimum wage, the government has proposed reducing, by 50%, the minimum rate for health insurance contributions, which are paid by employers. This will result in employers paying HRK 103.85 less monthly in contributions for the minimum wage.

To be entitled to compensation, an employer must be paying a minimum wage for at least 12 months.

The gross minimum wage will thus increase as of next year from HRK 3,276 to 3,439.80, which is a net amount of HRK 2,752 while employers' costs will decrease from HRK 3,839.47 to 3,735.62.

By amending regulations on income tax, to go into force as of 2018, the government wants to help employers in the tourism sector by exempting them from paying taxes on expenses for meals, accommodation and drinks for their permanent seasonal workers, said Finance Minister Zdravko Maric.

As of next year, the value of a non-taxable gift in kind will be increased from HRK 400 to 600.

The government's measures are aimed at increasing the wages of the least paid workers and send a message to the industries where a large number of workers receive the minimum wage, said Prime Minister Andrej Plenkovic.

Labour and Pension System Minister Marko Pavic recalled that this was the second 5% increase in the minimum wage in the term of the incumbent government, while Economy Minister Martina Dalic said that the government's measures were geared towards benefiting workers and increasing employers' competitiveness.

Text: Hina

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