How to further reduce the tax burden on high salaries?

The topic of tax burden on income from labour is equally appealing to both the academic and the general audience. Various previous studies by the Institute of Public Finance have shown the levels of mandatory contributions and personal income tax in Croatia and other countries.1 The present analysis is motivated by recent initiatives to reduce the tax burden, primarily aimed at high-earning employees.2 The present work demonstrates (1) how the tax burden on labour income in Croatia has changed between 2011 and 2025, (2) the level of this burden compared to selected EU countries, and (3) how the tax burden of employees with higher salaries can be further reduced by adjusting the contribution calculation method and changing personal income tax rates. The analysis is based on hypothetical employees with different salary levels.