employment retention

Employment Retention Incentives - shortened working hours

employment retention

In order to retain employment in industries affected by the Coronavirus (COVID-19), the Croatian Government has introduced an additional job retention incentive for shortened working hours.

  • From 1 June to 31 December 2020 
Amount of the grant
  • The grant is awarded for temporary introduction of full-time work which lasts shorter than the monthly working hour fund, but not shorter than 50% of monthly working hours fund, in the amount up to HRK 2,000 per month net per employee.
  • The employer is obliged to calculate and pay social security contributions, for which a refund will be made in accordance with the approved grant.
  • Payment by the 30th of the month for the previous month.
Basic eligibility criteria for this incentive
  • Basic eligibility criterion: expected shortened monthly working hours fund for all employees employed by the employer on a full-time basis in the month for which the grant is requested of at least 10%.
  • Revenue decline (based on VAT forms) of at least 20% in the month for which the grant is requested compared to the same month previous year.
  • The employer must provide credible documentation proving business difficulties such as:
  • cancelation of or amendment of the contracts with customers, written statement of customers on decline of orders for the month for which the grant is requested;
  • inability of contracting new jobs during the COVID-19 epidemic;
  • inability of supply of finished products or contracted and paid raw and production materials, machines, tools;
  • inability of purchase of new raw and production materials, machines and tools necessary for business activities.
Target group of employers
  • Employers with 10 or more employees.
  • from 10 to 50 employees if the application for the grant is submitted for at least 20% of employees;
  • 51 or more employees if the application for the grant is submitted for at least 10% of employees;


  • employers who have not paid salaries for the previous month;
  • associations and institutions that are not Corporate Profit taxpayers.
Target group of employees 
  • Full-time employees, permanent or fixed-term, in accordance with employee records as of 31 May 2020.


  • owners and co-owners with more than 25% share, shareholders, board members, directors, procurators, etc.;
  • employees whose notice period is running;
  • employees working from home office.
Who has to repay the grant?

Employer who applied for the incentive will be obliged to repay the grant if in the period from the grant receipt until 31 December 2021:

  • pays dividends or profit share or other equivalent receipt that is considered as distribution of profits realised in any tax period;
  • provides stock options or own stocks or shares to members of the management board, executive directors, procurators and etc.;
  • pays bonuses and rewards for work results above the non-taxable amount (HRK 5,000) and other similar receipts to members of the management board, executive directors, procurators, etc.;
  • Acquires own shocks or own shares.

Not applicable for employers who already receive job retention grants from the Croatian Employment Bureau.