A new Decree on the minimum wage for 2022 (OG 117/2021) was adopted. The new Regulation on the minimum wage would thus apply to about 51 thousand employees who have a minimum wage. This Regulation applies to full-time workers, while the minimum part-time wage is set in proportion to the minimum wage for full-time work, as well as the hours of work for which the worker is registered. The decree will be published in the Official Gazette and will enter into force on January 1, 2022.
MINIMUM AMOUNT OF GROSS AND NET WAGE
The new amount of the minimum gross wage will increase by 10.3% and will amount to HRK 4.687,50 in gross amount, i.e., HRK 3.750,00 in net amount, starting from 2022, which is an increase in the amount of the minimum wage for 2022 with to 2021 from HRK 437,50 in gross amount, or HRK 350,00 in net amount. For the first time, the minimum net wage will be above 50% of the average net wage.
AVERAGE GROSS AND NET WAGE IN CROATIA
Let us remind you that the average net wage paid in August was HRK 7.118,00, and the median wage was HRK 6.014,00. Given these data, the new minimum wage would amount to a total of 52.7% of the average wage, or 60% of the median wage.
For comparison, in 2016 the minimum wage was 38% of the average wage. This means that within 5 years the minimum wage has been increased by HRK 1.254,00.
The average gross minimum wage will thus amount to a total of HRK 4.687,50, and when proposing the minimum wage for 2022, several parameters were taken, such as job preservation measures, the COVID-19 pandemic on the labor market, as well as the global impact of the pandemic on prices of goods and services.
AVERAGE GROSS AND NET WAGE OF DIRECTORS AND MANAGEMENT BOARD MEMBERS
As we wrote earlier HERE, at the beginning of the year there were changes in the calculation of wages to members of the management board who are employed in the company in which they perform this duty.
The provisions of the Minimum Wage Act (OG 39/13) applied to them, as well as to other employees who are not in the company’s management. This caused inequality between the owner of the business and the director of the company in which he has an employment contract. At the beginning of 2021, there was a change in regulations, i.e., a change in the amount of the average wage, so that all workers working in the Republic of Croatia have the right to the minimum wage, regardless of the seat or registration of the employer.
In the Order on the amounts of bases for calculating contributions for compulsory insurance for 2021, in Article 19, the monthly basis for full-time work of a person who is a member of the management board or executive director must not be lower than HRK 5.967,65.
It is also important to emphasize how an employment relationship can be contracted full-time and part-time. If a member of the management board or executive director of the company is employed part-time, then he pays a smaller amount of contributions and exercises the right to health care and length of service as if he were employed full-time.
For 2021 (OG 118/20), members of the management board and directors have prescribed an average gross wage of HRK 9.181,00, while the average net wage amounts to HRK 6.724,00. Given that members of the management board and executive directors do not have compulsory insurance, their task is to independently calculate and pay contributions.
Therefore, calculating employee wages can be a time-consuming and intensive job. That is why various companies, including Confida, offer complete management solutions that provide all the benefits of the payroll department without additional costs and responsibilities. Confida offers a payroll outsourcing service or management of all obligations related to the payroll process and allows you to focus on your core business, and you can see a detailed offer HERE.
