The concept of so-called "Remote" work (often called "work at an alternative location" in legal terms) has experienced tremendous and lasting growth since 2020. While it offers great comfort, it hides unique additional legal elements from an accounting perspective.
If you live in Croatia, have permanent residency here, and work for a company in a neighboring city but have agreed to an exclusively remote work arrangement, the taxation system remains identical to physically working at the office. You are subject to the same percentage rules and tables for taxes and contributions. Therefore, the salary amount from our calculator remains the same, except for one detail – expense reimbursements.
According to the Croatian (and other modernized) Labor Law, the employer is now obliged (if you work remotely for a significant portion of the month) to pay a flat-rate, tax-free reimbursement for work costs (electricity, Wi-Fi, water). This amount does not enter the gross calculation or tax threshold. In Croatia, for example, this allowed maximum is approximately 3.98 EUR per workday, depending on calendar changes.
To strengthen winter tourism residency and encourage foreign capital spending outside the classic summer season, countries like Croatia were among the first to introduce a special, isolated <strong>Digital Nomad visa program</strong> in their laws.
A citizen of a non-EU/third-country hired by a foreign employer with no registered legal seat in Croatia performs work in Croatia via a long-stay visitor visa.
To avoid "scaring off" potential residents with high progressive tax rates, the state completely waives all claims to personal income tax on the nomad's income. This makes their base salary 100% tax-free (Net=Gross) in Croatia. Consequently, the state collects revenue exclusively through indirect VAT on the nomad's consumption in supermarkets and services during their stay.