The Croatian Employers' Association proposes that the minimum wage in 2027 amount to 1,086.75 euros gross per month.

That would be an increase of 36.75 euros, or 3.5 percent compared with the current 1,050 euros gross. As reported by N1, along with the increase in the minimum wage, HUP is also seeking tax relief so that employees with the lowest wages would have more money left.

Employers base the proposed increase on an inflation estimate of around 4 percent, reduced by the expected drop in productivity of 0.5 percent. They believe that a larger increase would place an additional burden on business operations, especially companies that employ many workers and have low profits. 'Faster growth in labor costs threatens investment, competitiveness, and jobs,' HUP says.

How much would actually land in the worker's account?

Under the current rules, for an employee in Zagreb without children and additional tax allowances, insured in both pension pillars, from the proposed gross amount there would remain 819.75 euros net. 201.36 euros would be set aside for pension contributions, with the statutory reduction of the base for the first pillar, and another 65.64 euros for tax. The current minimum wage in the same example amounts to 799.24 euros net, so the increase would be 20.51 euros per month.

HUP also proposes an increase in the personal allowance, that is, the part of income on which no tax is paid. For the current minimum wage level, it states an increase from 600 to approximately 840 euros. If the allowance amounted to exactly 840 euros, from the proposed 1,086.75 euros gross the worker in our example would be left with 874.95 euros net. The contributions would remain the same, and the tax would fall to 10.44 euros. That would mean 75.71 euros more than today.

In the document 'Proposal for the minimum wage for 2027' HUP calls for the permanent linking of the personal allowance to the gross minimum wage reduced by pension contributions, with the aim of fully exempting the minimum wage from tax. If the allowance covered the amount after actually calculated contributions, while retaining the current relief, the worker would be left with 885.39 euros net, that is, 86.15 euros more than today. However, that HUP document does not clarify how the existing relief for pension contributions would be taken into account when determining the allowance. Therefore, this is a possible calculation, not a net amount that HUP explicitly confirmed.

For the worker in this example, accepting the tax relief would bring noticeably more money than just increasing the gross minimum wage. Still, employers are putting forward a proposal, while the final amount of the minimum wage for 2027 is determined by the Government no later than October 31. Exempting the minimum wage from tax also requires an amendment to tax regulations, so the proposed net amount is not yet guaranteed.