This specialist professional paper deals with the tax burden on labour in Croatia and a comparison with the tax burden in selected EU countries. Based on the available data and the calculation of the amount of the tax wedge, certain conclusion can be drawn that labour in Croatia is not more tax burdened compared to selected EU countries in terms of income tax itself, although employers demand its reduction. In Croatia, a significant problem is the amount of contributions, although there are EU countries that have higher rates, and additionally the amount of surtax because it can contribute to tax evasion that affects macroeconomic stability. The unreformed social welfare system is an issue that in itself imposes and additionally contributes to the burden on taxpayers as well as the increase in the cost of labor itself. Unreformed systems have their price and it´s high. In initiating economic growth and development, reducing the tax burden with the implementation of necessary reforms should be recognized as an important stage. The problem of the tax burden on labour and tax policy and the manner of its implementation, as well as the manner of spending the collected tax revenues differ from state to state, which makes this comparison useful. There are a number of differences between the selected countries that may seem negligible but significantly affect the perception of citizens therefore should be mentioned. In Croatia, citizens´ trust in institutions has been undermined due to the public´s negative perception of the fairness of the system itself, as shown by data from the World Economic Forum. The system can and should be improved by spending tax revenues more efficiently and with greater transparency. In transition societies dealing with additional social and economic problems, the issue of the tax burden on labour and efficiency of spending tax revenues is extremely important because it affects society to a greater extent than in orderly economies, which justifies dealing with this topic. What is the real tax burden on labour and how do the EU members stand, is a question to which this paper will try to answer taking into account the exact numerical indicators.