Employment Retention Incentive for the period from November to December 2020

In order to retain employment within industries affected by the Coronavirus epidemic (COVID-19), provisions regarding employment retention incentives issued by the Croatian Employment Bureau for the period from November to December 2020 have been amended.

Overview of available employment retention incentives and conditions for their application:

1. Employment retention incentive for specific business sectors and microentrepreneurs

Amount of the incentive	Sectoral employers (i.e. employers performing business activities in specific sectors)	Microentrepreneurs (regardless of sector/ business activity)
	up to HRK 4,000 per full-time employee or pro rata amount per part-time employee in accordance with the percentage of revenue drop: from 40% to 44.99% - HRK 2,000; from 45% to 49.99% - HRK 2,500; from 50% to 54.99% - HRK 3,000; from 55% to 59.99% - HRK 3,500; from 60% and above - HRK 4,000. exemption from payment of pension insurance contributions for second pillar (MIO II), proportionately to the incentive amount.
Basic eligibility criteria for the incentive	A) For sectoral employers Business activities in the following sectors: Agriculture, forestry, and fishing, Transport and storage, Services incidental to transport, Providing accommodation, preparation,food and beverage service, Rent and lease, travel agencies, tour operators and other reservation services as well as related activities, Arts, entertainment, and recreation, Repair of: computers, personal, household goods and other personal service activities, Organization of cultural, business and sports events, fairs and weddings as well as related ancillary service activities; Translation activities and interpreter services; and Publishing of books, periodicals and other publishing activities. B) For microentrepreneurs (regardless of sector/ business activity) Employing 9 or less employees.
	Active longer than one year Revenue drop (based on VAT forms or financial projections): in the period from 1 April 2020 to 30 September 2020 compared to the same period previous year or in the month for which incentive is requested compared to the same month previous year, if established prior to 1 April 2019; or in the month for which incentive is requested compared to the same month previous year, if established after 1 April 2019.	Active less than one year Revenue drop (based on VAT forms or financial projections) in the month for which incentive is requested compared to September 2020.
Target group of employees	Employees: With fixed-term and indefinite employment, Citizens of Croatia, EU or third countries, Employed full-time or part-time, That have one of the following status: assigned employee, single parent, Croatian war veteran, etc., Employees of the branch/ representative offices of foreign companies. EXCLUDING: Employees employed after 31 October 2020 for incentive for November and after 30 November 2020 for incentive for December, Co-owners with more than 25% share and founders (except in the case of employers with up to 10 employees, craft owners, regardless of the number of employees), Pensioners, Foreign employees whose work permit and residence expired.
Who must repay the incentive?	Employers who received incentives for 50 or more employees must repay incentives if in the period from the incentive 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, 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 stocks or own shares.
Application deadline	Incentive for November: from 26 November until 25 December 2020 Incentive for December: from 26 December until 25 January 2021

2. Employment retention incentive for employers whose business activities are suspended or limited based on decision of the Civil Protection Board

Amount of the incentive

Employers whose business activities are suspended or limited based on decision of the Civil Protection Board (regardless of sector/ business activity)

Suspended for a period from 1 to 14 days:

HRK 2,000 per full-time employee or pro rata amount per part-time employee.
exemption from payment of pension insurance contributions for second pillar (MIO II), proportionately to the incentive amount.

Suspended for a period longer than 15 days:

HRK 4,000 per full-time employee or pro rata amount per part-time employee.
exemption from payment of pension insurance contributions for second pillar (MIO II), proportionately to the incentive amount.

Limited business activities:

up to HRK 4,000 per full-time employee or pro rata amount per part-time employee in accordance with the percentage of revenue drop:
- from 40% to 44.99% - HRK 2,000;
- from 45% to 49.99% - HRK 2,500;
- from 50% to 54.99% - HRK 3,000;
- from 55% to 59.99% - HRK 3,500;
- from 60% and above - HRK 4,000.
exemption from payment of pension insurance contributions for second pillar (MIO II), proportionately to the incentive amount.

Reimbursement of fixed costs

Within the framework of employment retention incentive for employers whose business activities are suspended based on decision of the Civil Protection Board from 27 November 2020, it is possible to apply via separate request form for an additional incentive amount of compensation of part or all fixed costs, depending on the realized revenue drop.

Basic eligibility criteria for the incentive

A) For employers whose business activities are suspended

Business activities are suspended based on decision of the of the Civil Protection Board.
Do not need to prove revenue drop.
Incentive is awarded only for the month in which business activities are suspended based on decision of the Civil Protection Board.

B) For employers whose business activities are limited

Business activities are limited based on decision of the Civil Protection Board (e.g. limitation of working hours to part-time work or capacity limitations with regard to number of employees who can work from the business premises, at the event, in transport, etc.) or there is a business relationship with employers whose business activities are suspended.
Incentive is awarded only for the month in which business activities are limited based on decision of the Civil Protection Board.

Active longer than one year

Revenue drop (based on VAT forms or financial projections):
- in the period from 1 April 2020 to 30 September 2020 compared to the same period previous year or in the month for which incentive is requested compared to the same month previous year, if established prior to 1 April 2019; or
- in the month for which incentive is requested compared to the same month previous year, if established after 1 April 2019.

Active less than one year

Revenue drop (based on VAT forms or financial projections) in the month for which incentive is requested compared to September 2020.

Target group of employees

Employees:

With fixed-term and indefinite employment,
Citizens of Croatia, EU or third countries,
Employed full-time or part-time,
That have one of the following status: assigned employee, single parent, Croatian war veteran, etc.,
Employees of the branch/ representative offices of foreign companies.

EXCLUDING:

Employees employed after 31 October 2020 for incentive for November and after 30 November 2020 for incentive for December,
Co-owners with more than 25% share and founders (except in the case of employers with up to 10 employees, craft owners, regardless of the number of employees),
Pensioners,
Foreign employees whose work permit and residence expired.

Who must repay the incentive?

Employers who received incentives for 50 or more employees must repay incentives if in the period from the incentive 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, 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 stocks or own shares.

Application deadline

Incentive for November: from 26 November until 25 December 2020.
Incentive for December: from 26 December until 25 January 2021.