October the 7th, 2026 – A 20% increase on the Croatian minimum wage is being sought in order to combat inflation, but it doesn’t seem like even that would be enough.
Average wages of employees in legal entities across Croatia continue to record solid growth in year-on-year comparisons, although growth rates are slowing slightly. As Jadranka Dozan reports for Poslovni, according to the latest statistical data, relating to (August) payments for the month of July, the average of 1,540 euros net compared to the same month last year represents a nominal increase of 7.2 percent, which adjusted for inflation, according to the Croatian Bureau of Statistics, means 3.2 percent real growth. The median wage, which is usually around 15 percent lower than the average, is recording somewhat higher growth; compared to July last year it rose nominally by 7.8 percent, to 1,346 euros.
constantly rising prices are making life in croatia extremely difficult for most
Data on the average wage for August is yet to come, and for now it is only certain that its growth in real terms will be affected by the renewed acceleration of inflation. After the annual price growth accelerated from 3.9 percent in July to 4.2 percent in August, the first estimates for September point to a further acceleration, to 4.7 percent. In other words, the growth of the purchasing power of wages is under pressure, and this could also encourage new pressures for wage growth, primarily from better-organised trade-union employees. In addition to certain segments of the public sector, this also applies to parts of the private sector where demand for labour remains solid and wages are below average.
Since the time for determining the amount of the minimum wage for 2027 is approaching, it is no surprise that demands for its increase are already being heard. The Government’s decision on the gross minimum wage for next year is expected by the end of the month, but the Construction Workers’ Union, for example, has already indicated a demand that it be increased from the current 1,050 euros to 1,250 euros gross. As the union’s general secretary Domagoj Ferdebar said alongside that announcement, depending on the place of residence and tax reliefs this would mean an increase from approximately 800 to around 1,000 euros net. The aforementioned gross minimum wage amount was envisaged by Andrej Plenković’s Government in its programme as a target by 2028, and it will soon be seen at what level it will be set for 2027.
However, it is certain that employers would not take kindly to a new increase in the lowest wage of around 20 percent, because this does not concern only workers on the minimum wage (around 74 thousand of them) but represents a broader cost and creates pressure for a chain increase in other wages. The Croatian Employers’ Association has long been repeating that the growth of the minimum wage should follow inflation, but also productivity. Like many economists, they believe that room for growth of all net wages in conditions of still elevated inflation can and should be freed through an increase in the personal allowance in income taxation, especially since the basic allowance has remained unchanged (600 euros) since the beginning of last year. Because of this, some employees who were not previously in the tax brackets have in the meantime fallen into them, some from the group of higher earners have stepped into the higher income tax rate, and the overall result is increased tax burden on wages. At the same time, raising the personal allowance is the subject of calculations at the Ministry of Finance headed by Tomislav Ćorić because of the fiscal situation of the general government budget and the deficit that already reached three percent of GDP last year.
regional differences
When it comes to wages, after several years in which the public sector led growth, this year growth rates are somewhat higher in the private sector. However, the levels of average net wages differ considerably by county. According to the latest edition of Regio-novosti of the Zagreb Institute of Economics, in the first quarter the average net wage in the City of Zagreb (1,769 euros) was 419 euros, or 31 percent, higher than in Virovitica-Podravina County, which is at the bottom.
In addition to the City of Zagreb, where the average net is around 15 percent higher than the national average, net wages were above average only in Zagreb County and Primorje-Gorski Kotar County. Compared to the first quarter of last year, wages of employees in legal entities generally grew faster in otherwise lower-paid areas, the Institute of Economics notes.
