Tax Rates and Brackets
After we subtract contributions and your personal tax-free deduction from your gross salary, the remaining amount is your Tax Base. It is on this base that the percentages we call "tax rates" are applied.
Tax systems in most countries are designed to be progressive – the more you earn, the higher percentage you give to the state on that highest upper part of your earnings.
Progressive Taxation in Croatia
This rate applies to the monthly tax base up to 5,000.00 EUR (60,000.00 EUR annually). Since the vast majority of workers have a base within this limit, they are taxed exclusively at this lower rate.
This rate applies EXCLUSIVELY to the amount of the tax base that EXCEEDS 5,000.00 EUR per month. This means that the higher rate is paid only on the upper part of earnings that exceeds that threshold, which is the foundation of a progressive system.
Earnings During Job Change
Due to different rates depending on cities, job seekers must be extremely careful during negotiations. Negotiating a "Gross amount" ensures a fair starting point regardless of whether you are registered in a major city or a smaller town (so that the employer does not discriminate against you through remaining a cheaper cost if you sign a fixed Net).