In 2026, the tax-exempt benefits that employers may provide to employees have not changed significantly compared to 2025. Most benefits remain the same, although there are some adjustments. The most notable change is the increase in the maximum compensation for work performed through student and pupil associations.

Tax-exempt benefits represent an important tool for managing labour costs. They allow employers to provide additional benefits and compensation to employees without additional tax burden, while employees receive higher net income.

Below is an overview of the most important tax-exempt benefits employers can use in 2026.

Daily Allowances and Business Travel Reimbursements

Daily allowances are among the most commonly used tax-exempt benefits in practice. When an employee goes on a business trip within Croatia that lasts longer than 12 hours, they may receive a daily allowance of €30 per day. If the trip lasts between 8 and 12 hours, the allowance amounts to €15.

If the employer provides meals during the business trip, the daily allowance is reduced proportionally — by 30% for one meal and by 60% for two meals.

For international travel, daily allowances are determined according to the regulations applicable to public sector employees. In addition to daily allowances, actual costs related to transportation, accommodation, and other travel expenses may also be reimbursed tax-free.

Reimbursement of Employee Expenses

Employers may reimburse a range of work-related expenses tax-free.

The most common reimbursements include:

• transportation costs to and from work
• costs of using a private car for business purposes (up to €0.50 per kilometre)
• employee meal costs
• employee accommodation costs

When it comes to meal costs, there are two main options:

• a flat-rate meal allowance of up to €100 per month or €1,200 per year, or
• reimbursement of actual meal expenses based on receipts, up to €150 per month or €1,800 per year.

These two options cannot be used simultaneously within the same month.

Accommodation costs for employees may also be reimbursed tax-free, provided they are supported by valid documentation and paid via non-cash transactions.

Childcare, Health and Remote Work Expenses

Tax regulations also allow several tax-exempt benefits related to employee wellbeing and flexible work arrangements.

For example, employers may reimburse:

• childcare or kindergarten costs for employees’ children up to the actual amount incurred
• preventive medical check-ups, if they are available to all employees
• testing and vaccination costs against infectious diseases when required for business activities
• a remote work allowance of up to €4 per day, or a maximum of €70 per month

These measures are becoming increasingly important as they support employee health and encourage flexible working models.

Bonuses, Gifts and Other Benefits

Employers may also provide various tax-exempt bonuses and occasional payments.

Common examples include:

• seasonal bonuses (such as Christmas bonuses or annual leave allowances) – up to €700 per year
• performance bonuses – up to €1,200 per year
• non-cash gifts – up to €133 per year
• gifts for employees’ children – up to €140 per year

Tax-exempt tips recorded through the fiscalisation system may also be paid out, up to €3,600 per year.

Allowances and Insurance

Employers may provide tax-exempt financial support in certain life situations.

For example, employers may pay:

• a newborn child allowance – up to €1,500
• support for employees with disabilities – up to €600 per year
• support in the event of death of a close family member – up to €600
• support for long-term sick leave – up to €600 per year

Employers may also pay voluntary pension insurance premiums for employees up to €804 per year, as well as supplementary or additional health insurance premiums up to €500 per year, provided they are paid through non-cash transactions.

Long-Service Awards

Employers may grant tax-exempt long-service awards to employees for continuous service with the same employer. The maximum tax-exempt amount depends on the number of years worked for that employer.

For completed:

• 10 years of service – up to €300
• 15 years of service – up to €360
• 20 years of service – up to €420
• 25 years of service – up to €480
• 30 years of service – up to €540
• 35 years of service – up to €600
• 40 years of service and every additional 5 years – up to €720

Receipts That Are Not Considered Taxable Income

The tax system also recognizes certain receipts that are not considered income and therefore are not subject to taxation.

These include:

• scholarships for pupils and students
• scholarships for academic excellence
• sports scholarships and awards for sports achievements
• compensation for work performed by pupils and students
• humanitarian support payments
• certain payments made within projects financed by European Union funds

In 2026, particular emphasis is placed on the increase in the maximum tax-exempt compensation for work performed through pupil and student associations, which may amount to up to €4,800 per year.

Conclusion

Tax-exempt benefits are an important tool for optimizing labour costs and structuring employee compensation systems. When used properly, they allow employers to increase employees’ net income without additional tax burden, while still complying with tax and accounting regulations.

Because there are many different types of tax-exempt payments and specific conditions for each, it is important to review how they can be incorporated into business processes in a timely manner.

If you need assistance with planning tax-exempt benefits or ensuring compliance with tax regulations, Brandom can help. Contact us to ensure your payments are fully aligned with current legislation.