From 2026, student workers in Croatia will be able to earn significantly more before triggering tax obligations, in a reform that aims to ease financial pressure on young people and stabilise a student labour market that has become vital to employers. The government has confirmed that students whose parents claim them for tax relief will be allowed to earn up to €4,800 tax-free per year, while those who are not included in parental relief will enjoy a higher threshold of €12,000. At the same time, the coefficient used to calculate the first tax bracket will rise from 6 to 8, so parents will be able to retain tax benefits even if their children work more and earn more.
The decision comes against the backdrop of steadily rising minimum student hourly rates, higher living costs and persistent demand for flexible labour, especially in services and tourism. In 2025, the minimum student hourly rate stood at €6.06; from the start of 2026 it will increase to €6.56. While wages have been climbing, the tax-free thresholds had remained unchanged for years, creating a growing mismatch between what students needed to earn and what the system allowed them to make without penalty. According to data from student centres, last year more than 13,800 students exceeded the previous tax-free limit of €3,360, and over 1,500 earned more than the upper threshold of €10,080. Many were forced to stop working in the middle of the year despite high employer demand, just to avoid crossing the line and complicating their or their parents’ tax situation.
The Zagreb Student Centre, Croatia’s largest, with roughly 42,000 registered students and 12,500 employers on its books, has described the reform as a timely and realistic response to labour market conditions. With the new limits in place, the centre estimates that many students will be able to work throughout the year without having to interrupt or reduce hours purely for tax reasons, and that average monthly earnings of around €1,000 will be feasible for those who work regularly. For a large share of students, especially those who pay rent in major cities, such income can make the difference between constantly juggling bills and achieving a more predictable standard of living.
Operationally, the system is already highly digitalised. About 90 percent of student work contracts are now issued online, and in the first ten months of 2025 alone, students requested some 310,000 contracts. Higher thresholds will therefore not require a fundamental redesign of the infrastructure; instead, they change the parameters within which the existing digital system functions, reducing administrative risk for both students and employers. Students will no longer face the same pressure to track every euro as they approach the old ceiling, and employers will be less likely to lose experienced seasonal or part-time workers in the middle of the busiest periods.
The Split Student Centre paints a similar picture of strong and diversified demand. In 2024 it recorded 75,941 job placements, underscoring the scale of student participation in the regional economy. The coastal city’s economy is heavily shaped by tourism, hospitality and trade, and that reality is reflected in the most popular student roles: skippers, tourist guides, housekeeping staff, waiters, cooks, sales assistants and logistics workers. The average annual student income in Split reached €3,715, and 234 students earned more than €10,800 solely through the Student Service. A total of 4,150 employers made use of the centre’s services, indicating that student work has become an integral part of staffing strategies, particularly in the summer season when tourism peaks.
In addition to traditional service jobs, demand is growing for specialised and knowledge-intensive part-time work. Student centres highlight rising interest in hiring students with skills in IT, programming, data analytics and other technical fields. In Zagreb, there is a clear increase in jobs that are closely related to students’ fields of study, which brings a double benefit: students earn money while also gaining practical experience that strengthens their position on the labour market after graduation.
Student representatives have broadly welcomed the government’s move, but they also stress that this should not be a one-off correction. The Student Council of the University of Zagreb argues that while raising thresholds is a much-needed relief, the underlying structural issue remains: minimum hourly rates have been adjusted repeatedly in response to inflation and labour shortages, whereas tax-free income limits were frozen for years. The Council is calling for a mechanism that would automatically adjust thresholds in line with future increases in minimum student pay, so that the system does not fall out of sync again.
The Council also points to a group that still risks being left behind: students in regulated professions such as healthcare, law and certain technical disciplines, who may face strict rules on paid work or limited opportunities to work in their field before graduation. For them, the benefits of higher thresholds are less direct, because their ability to take on paid jobs is constrained by heavy study loads, mandatory placements or professional regulations. The debate on tax-free limits therefore feeds into a wider discussion about how to ensure fair and practical pathways from study to work across different disciplines.
Even with these caveats, the reform is widely seen as a timely boost for both students and employers. Student work represents an important segment of Croatia’s labour market and a crucial income source for many young people who have to contend with rising rents, food prices and transport costs. At the same time, sectors such as tourism, retail and services rely on student workers to cover seasonal peaks and fill flexible shifts that are harder to staff with full-time employees. By raising tax-free thresholds and adjusting the tax bracket coefficient, the government is signalling that it wants to support this ecosystem rather than constrain it.
If implemented smoothly, the new rules should reduce the annual anxiety around earnings limits, allow students to plan their work and finances with more confidence, and give employers a more reliable pool of labour throughout the year. In that sense, the 2026 reform is not just a technical tax change but a recognition that student work has become a structural feature of Croatia’s economy and that policy needs to reflect this reality.
