Parental Benefits: How Salary is Determined During Paternity Leave

Paternity leave is a new right for fathers introduced by amendments to the Law on Maternity and Parental Benefits, which has been in effect since August 1, 2022. In the case of the birth of one child, the father is entitled to leave of ten working days, and in the case of the birth of twins, triplets, or simultaneous births of multiple children, an uninterrupted duration of fifteen working days. This right can be utilized by employed fathers and fathers who are self-employed; it cannot be transferred to the mother or another person and does not depend on the employment status of the child’s mother.

The father is entitled to paternity leave even if the mother is unemployed. The right to paternity leave does not depend on the marital status of the child’s parents; it is the father’s right regardless of whether or not he is in a marital union with the child’s mother. Paternity leave can be used until the child is six months old, which means that fathers of children born before August 1, 2022, who have not yet reached six months, can also exercise the right to leave.

It cannot be interrupted

Paternity leave is used continuously, and the father as the right holder decides on the period of its use. It is not possible to use it in two or more installments. If the father intends to use paternity leave immediately after the child’s birth, he is obliged to inform the employer of his intention fifteen days before the expected date of delivery. If he intends to use the leave later, and he can use it until the child is six months old, he is also obliged to inform the employer fifteen days in advance.

Paternity leave is used continuously, and since it is defined in working days, the calendar period of use depends on the user’s work schedule. If the right holder works a five-day work week, one week implies the use of five days of paternity leave. However, if the right holder works a six-day work week, he will use six days of paternity leave in one week, thus the calendar period of leave will be shorter for him.

One hundred percent of the average, but…

For the period of using paternity leave, the employed father is entitled to salary compensation that is directly paid to him by the Croatian Health Insurance Fund. The compensation is determined at the level of one hundred percent of the average net salary that was paid to him in the six-month period preceding the month in which the paternity leave began, without a cap on the maximum amount. For example, if the child’s father received an average net salary of 10,000 kuna in the previous six months, the compensation will be determined based on that amount for the corresponding hours or days of leave used. If he received less than six salaries in the previous six months, but more than one, the compensation will be determined based on the paid salaries. For a father who changed employers during those six months, the compensation is determined from the average salary paid by all employers, not just the employer from whom he is taking paternity leave.

In two cases, the amount of compensation is determined differently: if in the previous six months the father did not receive any monthly salary or received only one, and if he is a person who did not have a regulated insurance status in the prescribed period preceding the month of using the right. In the first case, if the father did not receive more than one monthly salary in the previous six months, the compensation is determined from the lowest base for paying contributions that applies for the month preceding the month of using the right. The lowest monthly base for paying contributions for 2022 is 3,624.06 kuna, so this amount is reduced by 20 percent for pension contributions for the purpose of determining the net compensation, resulting in a monthly amount of 2,899.25 kuna from which, depending on the number of days or hours of paternity leave used, the compensation is proportionally determined. The lowest monthly amount of compensation is also prescribed – the monthly amount of compensation cannot be less than 2,328.20 kuna. In a month that has 168 hours, for ten working days or 80 hours of paternity leave, the compensation cannot be less than 1,380.59 kuna.

An unpleasant surprise

A father who did not have a regulated insurance status before using paternity leave is entitled to compensation at the lowest prescribed amount, regardless of how much salary he received in the six months preceding the month of using the right. It is considered that the user did not have a regulated insurance status if he did not have the status of a health insurance insured person continuously for the previous nine months or twelve months with interruptions in the previous two years. Due to these rules, fathers who exercise the right to paternity leave may find themselves in a situation where instead of the expected compensation at one hundred percent of the net salary, they receive compensation lower than expected.

Self-employed individuals are entitled to paternity leave under the same conditions as employed fathers, and their compensation is determined from the base on which they paid mandatory contributions in the previous six months. This monthly base for the purpose of determining the amount of compensation is recalculated into derived net salary, from which the compensation is determined at a one hundred percent amount.