Coronavirus: Half a Million People Await Government-Paid Salaries

Lauren Simmonds

The coronavirus pandemic is continuing to wreak havoc with the global economy, and the Croatian economy is no exception despite the excellent results the country is having in fighting the virus.

As Poslovni Dnevnik writes on the 7th of April, 2020, as many as a third of persons who are residents of Croatia and who pay pension insurance, will get a part of their salary, and in some cases the entire monthly amount from the state budget this month.

As of the 5th of April at noon, 86,746 Croatian employers had requested job preservation support for about 506,000 of their workers, according to a report from Novi list. If workers who are seeking government-paid salaries both the state or local budgets, as well as those working for public or communal companies are separated from the total, it seems that private sector employers have sought support for almost half of their workers. It will be 3,250 kuna for March, 4,000 kuna net for April, with the state paying 1,460 kuna in contributions.

This means that for more than half of the amount of the average salary in Croatia in April, which amounts to about six and a half thousand kuna and which previously cost employers more than ten thousand kuna, will be covered by the state.

Considering that the payment of taxes and contributions has been delayed, and the fact that such fees will be written off entirely for some employers, this means that employers currently have to allocate just over 2,500 kuna to pay the average wage to their workers. The state will give a total of around 600 million kuna to Croatian employers. In addition, the Ministry of Finance had received 77 thousand requests for the deferral of contributions and income tax as of the 5th of April, 2020.

These measures have apparently, at least for the time being, prevented the massive layoff of workers due to the ongoing coronavirus crisis. As of the 5th of April, according to the Croatian Employment Service (CES), there were 147,980 unemployed people, which is 10,003 more than there were back at the end of February.

The number of unemployed persons increased by 7.2 percent in just over a month, while in the past few years, the number of unemployed would traditionally start to decline due to employment in the pre-season, in preparation for summer. However, if the state had not passed the measures it has, given the freezing of economic activity, that figure would probably be in the hundreds of thousands. The real situation with people who lost their jobs due to the coronavirus epidemic will be better seen in June if the government decides against extending the duration of the aforementioned economic measures.

Make sure to follow our dedicated section for all you need to know about coronavirus in Croatia.


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