By Marko Barišić. The focus of this article is on the Euro currency and its impact.
Croatia still has significantly lower salaries than Western European countries. It will take many years to close this gap. However, recent progress has been noticeable. Statistics show that Croatia has seen nearly double-digit average salary growth annually with the introduction of the Euro.
Recent wage data for Zagreb
Days ago, data on salaries paid in Zagreb for January this year was released. According to the City Office for Economy, the average gross salary in January was €2,224—an 11.9% increase compared to January 2024. Converted using the Croatian National Bank’s average exchange rate with the Euro, this amounts to just under AUD 4,000 (AUD 3,967 to be precise).
The average net salary in Zagreb was €1,564, marking an 11% rise from January last year. In Croatia, net salaries dominate public discussion as this is the amount received into bank accounts. Contributions for healthcare and pensions are mandatory and paid by employers. However, net pay depends on tax brackets, the number of children, and dependents, all calculated with the Euro.
Median salary and sector variations
The median net salary in January this year was €1,350, meaning half of Zagreb’s employees earned less than this, and half earned more. The highest average salaries in the Croatian capital are in the oil and gas sector (€2,339 net monthly), while the lowest are in leather production, textile industries, and personal service roles (just €943 net). The influence of the Euro has been evident in these sectors.
Croatia’s national wage goal
Notably, Zagreb’s average net salary in January was €172 higher than Croatia’s national average of €1,392 for the same month. Crossing the symbolic threshold of €1,500 for the national average net salary is a key target for the current Croatian government. Given current growth rates, this is expected within the next 4–5 months, influenced by the Euro.
Regional and EU comparisons
Salary comparisons resonate widely. For example, neighboring Slovenia had salaries 36% higher than Croatia’s a decade ago. Today, Slovenian earnings remain higher but the gap has narrowed to 13% due to Croatia’s adoption of the Euro.
While most EU members still outpace Croatia in wages, the country is not at the bottom. Croatia surpasses Bulgaria, Romania, Greece, Hungary, Slovakia, Latvia, Lithuania, and—surprisingly—Portugal, the only older EU member where Croatia holds an advantage.
Economic growth and future projections
This progress stems from accelerated economic growth since 2020, which continues today. However, economists predict growth rates may slow in coming years, leading to more modest, single-digit salary increases compared to recent double-digit rises.
Despite this, Croatia’s trajectory appears positive. For instance, the country’s total gross domestic product (GDP) was €47 billion in 2016 and is projected to reach €94 billion by the end of 2025—a doubling in less than a decade, an impressive growth linked to the Euro.