employment retention

New Employment Retention Incentives for July and August 2020 for specific Business sectors

employment retention

In order to retain employment in industries affected by the Coronavirus epidemic (COVID-19) in Croatia, the duration of the Incentive for Employment Retention in activities affected by the Coronavirus (COVID-19) of the Croatian Employment Bureau has been extended for July and August 2020, for certain business sectors/ activities.

Below is an overview of conditions for the implementation of this incentive.

Amount of the incentive

Amount of the incentive:

  • HRK 4,000 per a full-time employee or pro rata amount per a part-time employee.
  • HRK 250 per employee for pension insurance contributions for second pillar (MIO II).
 Basic eligibility criteria for this incentive

Employment retention incentive can be used by employers who meet the following criteria:

  • Business activities in the following sectors:
    • Transport and storage - primarily land passenger transport;
    • Providing accommodation and preparation and serving food and beverages;
    • Administrative and support activities - travel agencies, tour operators and other reservation services and related activities;
    • Arts, entertainment and recreation;
    • Organization of cultural, business and sports events, fairs and weddings, and related activities that generate most of income from events and public gatherings.
  • Revenue drop (based on VAT forms) of at least 60% in June 2020 compared to June 2019 (or February 2020 if active less than 12 months) for the incentive for July and likewise in July 2020 compared to July 2019 (or February 2020 if active less than 12 months) for the incentive for August.

Note: employers who are not registered for VAT prove the revenue drop based on the revenue drop spread sheet (in the form provided by the Employment Bureau).

 Target group of employees


  • With limited and permanent employment;
  • Citizens of Croatia, EU or third countries;
  • Employed full-time or part-time;
  • That have some of the following status: assigned employee, single parent, Croatian war veteran, etc.;
  • Employees of the branch offices of foreign companies.


  • Employees employed after 30 June 2020;
  • Co-owners with more than 25% share, founders, board members, directors, procurators, etc. (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 has to repay the incentive?

Employer who received the incentive for 50 or more employees will be obliged to repay the incentive if in the period from the incentive receipt until December 31st, 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 stocks or own shares.

 Application deadline

Employers can apply to the Croatian Employment Bureau for incentive for July and August from July 8th, to July 31st, 2020 and for incentive for August from August 1st, to August 31st, 2020.