The minimum base for calculating contributions for management board members in 2023

The Government of the Republic of Croatia has issued a Regulation setting the minimum salary as of 1 January 2023 at 700,00 euros gross. Consequently, the minimum wage will amount to 51,32% of the average gross wage. Compared to the minimum gross wage in 2022, at the beginning of 2023, there was an increase of 77,01 euros. 

In addition to the minimum salary, the minimum basis for calculating contributions of board members and executive directors is determined, and you can read the details in today’s CONFIDA Croatia article.

Determination of salary for board members and executive directors

According to Article 21, paragraph 2 of the Contributions Act, the monthly basis for full-time work for an insured person who is at the same time a member of the management board, executive director of the company, manager of a cooperative or a liquidator cannot be lower than 888,67 euros. Compared to 2022, there was an increase of 65,91 euros or 8.01%.

According to Article 4 of the Minimum Wage Act, all employees employed in the Republic of Croatia have the right to the minimum wage, regardless of the registered office or registration of the employer. The exception appears precisely in the case of board members, executive directors, cooperative managers and liquidators, who are the only employees employed by the company. By this, they can determine the amount of the salary in an amount lower than the minimum salary. This means that the board members who are the only employees of the company may have a lower salary agreed in the employment contract, but the mandatory contributions should be calculated and paid on the prescribed basis (888,67 euros for 2023).

As a board member can be employed part-time, in that case, the minimum salary and the minimum base can be calculated as a ratio of full-time work.

Board members who are not the only employees of the company in which they perform the duties of a board member cannot waive the minimum wage.

If an employed board member of a company or the executive director of a company, cooperative manager or liquidator pays contributions on a base that is less than prescribed, the Tax Authority will issue a resolution at the end of the year by which the difference in contributions will be calculated, according to Article 7, paragraph 58 of the Contributions Act. In that case, the board member is personally obliged to pay the contributions difference within 15 days from the receipt of the decision.

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