Non-taxable employment payments and benefits in Croatia for 2026

Non-taxable payments and benefits are one of the important tools of tax planning for employers and employees in Croatia.

How important they are is shown by the fact that in some, at first glance, well-paid industries they make up as much as 30% of monthly income, which only shows that the company in question invests well in financial consulting. It also says something else, but let’s stick to the topic...

What remains the same, and what still changes?

In Croatia, income tax is not charged on a wide range of payments that the law treats as tax-exempt. It is a broad legal framework. Under the Corporate Income Tax Act, tax-exempt items include, among others, certain payments to employees, pupils and students, scholarships, education-related allowances, social benefits, bonuses, insurance premiums, as well as certain receipts from European Union funds or public schemes.

The tax-exempt amounts that employers can pay to their employees have not changed compared to 2025. Within the categories that are not treated as taxable income and those on which income tax is not paid, the only increase applies to compensation for work arranged through pupil and student associations, and that is it.

What everyone in hospitality was hoping for, an increase in the tax-exempt, fiscally recorded tip amount, did not happen in the end. The limit remains 3,600 euros.

Non-taxable payments and benefits in 2026: per diems, travel, transport and meals

Below, we provide an overview of all types of payments and amounts that can be paid tax-free in 2026 under the rules currently in force. We start with per diems and maritime allowances, as well as allowances for living apart from the family and, generally, day-to-day costs while travelling for work.

Occasional bonuses and benefits in 2026: how much can be paid out tax-free?

Up to 1.200 € per year can be paid out as tax-free cash bonuses for work performance and other forms of additional employee rewards (additional pay, a supplement to the monthly salary, and the like).

Service anniversary bonuses can be paid after 10 years of work with the same employer, when the employee can receive a small token of appreciation of 300 euros tax-free. The amount of the service anniversary bonus increases by 60 euros for each additional 5 years of completed service, up to a maximum of 720 euros after 40 years of work.

And when the employee has already reached the maximum number of years, not only a public employer but also a private employer who values the employee, and can afford it, will also pay severance, which can amount to a one-off payment of up to 1.500 €.

That is, if it is severance due to redundancies and dismissals for personal reasons under the law governing employment relationships, the severance amount can go up to 960 € for each completed year of work with that employer.

Christmas bonuses, holiday allowances and other occasional bonuses can amount to up to 700 euros per year, and a gift for an employee’s child up to 15 years of age (who by 31 December of the current year has turned 15) can amount to 140 euros per year.

A newborn benefit can reach 1.200 euros within one year, and the law also provides benefits for sad occasions.

If the employer, at their own expense, provides employees with water and hot and cold non-alcoholic beverages during working hours, the tax-exempt amount is recognised in the amount of actual costs, but without VAT deduction except for water.

Non-taxable payments and benefits in 2026: employee health

The law also addresses employee health. Employees may turn out to be carriers, or, six years ago, were often referred to as bioterrorists during the madness of the pandemic, and the law recognises these costs as well:

Overall, there are various options permitted by law, and if you use them, you need to be aware of one thing, namely that they must be real business costs and reasons that have to be documented.