On October 1, 2022, amendments to the Income Tax Rulebook entered into force, which increased the amounts of non-taxable income with which employers can remunerate their employees.

Thus, the following non-taxable remuneration amounts have been increased with the new amendments:

• occasional awards (Christmas bonus, annual leave bonus and similar) from HRK 3,000.00 to HRK 5,000.00 per year
• monetary rewards for work results and other forms of additional remuneration for employees from HRK 5,000.00 to HRK 7,500.00 per year
• a gift for a child of up to 15 years of age from HRK 600.00 to HRK 1,000.00 per year
• gift in kind from HRK 600.00 to HRK 1,000.00 per year
• lump-sum monetary allowances for the costs of meals for employees from HRK 5,000.00 to HRK 6,000.00 per year
• compensation for using a private car for business purposes from HRK 2.00/km to HRK 3.00/km
• severance pay for retirement from HRK 8,000.00 to HRK 10,000.00.

Please note that the stated amounts are the maximum amounts allowed in the tax period (calendar year). If the employer has already paid non-taxable remuneration to their employees during this year, by the end of the year, they can pay the difference between the new amounts and the amount paid so far, tax-free. The prescribed possibility of paying the difference does not apply to compensation for use of a private car for business purposes.

As of January 1, 2023, the method of determining non-taxable meal expenses has been changed. Non-taxable amounts will no longer be determined on an annual basis but on a monthly basis and will amount to HRK 500.00 per month in cash, or HRK 1,000.00 per month if meals are provided on the basis of receipts. By doing so, it will be possible to make a non-taxable payment for several missed months of the same tax period all at once, i.e. it will be possible to pay for past months, but no longer to pay in advance.