To determine the amount of salary that may or may not be subject to enforcement, the average monthly net salary per employee in legal persons in the Republic of Croatia for the period January – August of the current year is taken as a parameter, which is then applied on payments made from 1 January next year. The stated cap to be applied from 1 Jan 2022 equals HRK 7,086.00.
Enforcement can be carried out in two ways. Attachment of earnings is carried out by the employer when paying the salary and the enforcement on the funds is carried out directly by FINA and the banks when paying into the debtor’s account. In this memo, we will deal with the topic of attachment of earnings.
Subjects of deductions from wages and salaries may be:
- judicial writ of execution,
- writ of execution by a notary public,
- private document certified by a notary public (consent to enforcement), and
- writ of execution by the tax authority.
If employers receive multiple enforcement title documents for their employees, it is necessary to determine the order of priority by date (private documents, i.e. loans according to the date of receipt of the case by the company and executions according to the date of receipt by a notary public), and then follow this established order of priority.
In exceptional cases, enforcement for child support must be carried out before enforcement aimed at collecting all other claims, regardless of the time of their occurrence.
The amounts that are exempt from enforcement in 2022 (protected part of income) apply to:
If net salary is equal to or greater than HRK 7,086.00
If net salary is less than 7,086.00
The following are the most common instances of such payments made by the employer in practice:
- Reimbursement of travel expenses (in the amount of actual expenses) and reimbursement of travel expenses to and from work up to the prescribed amounts up to which they are not considered taxable remuneration on the basis of employment (in the amount of actual expenses according to the price of the monthly or individual transport ticket, i.e. up to the price of the monthly or individual transport ticket);
- Gift for children up to 15 years of age (HRK 600.00) and support for newborns up to the prescribed amounts up to which they are not considered taxable remuneration on the basis of employment (HRK 10,000.00);
- Disaster relief for addressing damage from natural disasters and catastrophic events;
- Benefits for employees with disabilities (HRK 2,500.00 per year) and continuous sick leave for more than 90 days (HRK 2,500.00 per year), aid in the event of the death of an employee (HRK 7,500.00 except for one-off aid paid by employers to children of employees due to the death of an employee, which is entirely exempt from enforcement) and the death of a member of the employee’s immediate family (up to HRK 3,000.00 per year), up to the prescribed amounts up to which they are not considered taxable remuneration on the basis of employment;
- Cash lump sums for covering the cost of food for employees (up to HRK 5,000.00 per year), special occasion bonuses (Christmas bonus, holiday allowance, etc., up to HRK 3,000.00 per year), performance bonuses in cash and other forms of additional remuneration for employees (up to HRK 5,000.00 per year), awards to employees for completed years of service up to the prescribed amounts up to which they are not considered taxable remuneration (for completed 10 years of service up to HRK 1,500.00, for completed 15 years of service up to HRK 2,000.00, for completed 20 years of service up to HRK 2,500.00, for completed 25 years of service up to HRK 3,000.00, for completed 30 years of service up to HRK 3,500.00, for completed 35 years of service up to HRK 4,000.00, for completed 40 years of service and every next 5 years of service up to HRK 5,000.00);
- Daily allowances for business trips in the country and abroad, daily allowances for work when deployed in the country and abroad and daily allowances for business trips per diem paid to employees from the European Union budget for performing the duties for which they were recruited, in connection with the activities of the employer up to the prescribed amounts up to which they are not considered taxable remuneration (in the total amount);
- Awards to pupils and students (regardless of whether they are taxable or non-taxable);
- Other income exempt from enforcement under special regulations – sick leave benefits (regardless of whether they are taxable or non-taxable).
If the employee-debtor does not have a protected account, the amount of salary that is exempt from enforcement under Art. 173, para. 1 and 2 of the Execution Act will be paid to their regular current account. If the employee-debtor has a protected account, the amount exempted from enforcement will be paid to their protected account.
The opening of a protected account is the responsibility of the employee; to protect income and benefits exempt from enforcement, the debtor must notify FINA without delay by filling in the Notice of Income, Benefits, and Amounts Exempt from Enforcement form at the nearest FINA office.