In 2022, wage enforcement procedure may be carried out on a fixed cash income, and the amount subject to enforcement depends on the average net salary from the previous year. Thus, the average monthly net salary paid within legal entities in the Republic of Croatia for the period January – August 2021 amounts to HRK 7,086.00 (NN, No. 118/21). The Enforcement Act states that the determined amount will be applied in the next year, which means that this limit will be applied to every salary payment in 2022.
The wage enforcement document determines the amount of the salary that will be confiscated. The employer may carry out enforcement only based on a final notarial decision or a certified private document of the debtor. After the employee’s account is blocked, FINA is obliged to inform the employer about the opening of a specific bank account to which the part of the salary that is protected from enforcement will be paid. The rest of the salary is paid to the regular bank account of the debtor from which FINA takes funds for the account of the creditor. The confiscation of part of the salary is carried out by the employer in a way that the amount determined for enforcement is paid to the creditor. If the employer receives several enforcement orders for the same employee, he must make the order of collection by forming the order of the decision on enforcement according to the date of submission of the proposal for enforcement, and the private document of the debtor according to the date of receipt.
It is important to note that in the process of enforcement on wages (and other permanent cash receipts), the employer is obliged to take into consideration the restrictions on enforcement and income that are exempt from enforcement.
Below you can find an overview of the amount of salary that is exempt from enforcement during the year 2022.
If the net salary of the employee is equal to or higher than HRK 7,086.00, the following amounts are exempt from enforcement:
- 1/4 of HRK 7,086.00 if the enforcement is carried out to support the child (i.e., HRK 1,771.50);
- 1/2 of HRK 7,086.00 if the enforcement is carried out for legal alimony or compensation for damage caused by impaired health or reduction/loss of working capacity or compensation for loss of alimony due to death of the alimony provider (i.e., HRK 3,543.00);
- 2/3 of HRK 7,086.00 if the enforcement is carried out for the collection of other claims (i.e., HRK 4,724.00).
For example, if an employee receives a net salary of HRK 8,000.00, and the enforcement is carried out to collect unpaid bills, HRK 4,724.00 will be exempted from the enforcement, and the amount subject to enforcement is HRK 3,276.00.
If the net salary of the employee is less than HRK 7,086.00, the following amounts are exempt from enforcement:
- 1/4 of the net salary of the employee if the enforcement is carried out to support the child;
- 1/2 of the net salary of the employee if the enforcement is carried out for legal alimony or compensation for damage caused by impaired health or reduction/loss of ability to work or compensation for loss of alimony due to death of the alimony provider;
- 3/4 of the net salary of the debtor, but not more than HRK 4,724.00 if the execution is carried out for the collection of other claims.
For example, if an employee receives a net salary of HRK 5,000.00, and the enforcement is carried out due to overdue unpaid loan installments, HRK 3,750.00 or 3/4 of the salary will be exempt from enforcement, and the amount subject to enforcement is HRK 1,250.00.
As for other income and benefits, according to Art. 172. of the Enforcement Act, the following income is exempt from enforcement:
- reimbursement of business travel expenses and reimbursement of travel expenses to and from work,
- support for new-borns,
- disability benefits for workers,
- gift for children up to 15 years of age,
- benefits for continuous sick leave for more than 90 days,
- benefits in the event of the death of a worker and the death of a member of the worker’s immediate family,
- occasional prizes (Christmas bonus, holiday allowance, etc.),
- cash rewards for work results and other forms of additional remuneration of employees,
- awards to employees for completed years of service,
- per diems for fieldwork at home and abroad,
- per diems for business trips at home and abroad,
- per diem per diems paid to workers from the EU budget to carry out their jobs, in connection with the employer’s activities,
- flat-rate cash benefits to cover the cost of workers’ meals,
- maritime allowance and maritime allowance on ships of international navigation,
and only up to the prescribed amounts up to which they are not considered as taxable income.
Enforcement is also performed on the employee’s income, which is not salary, pension, or income from self-employment, free professions, agriculture and forestry, property and property rights, capital, and other income according to special regulations. There is a way for a person to protect other income but if it has the character of the only permanent cash income, which must be proven by a public document. A public document is a Certificate of Income and Receipt issued by the Tax Administration upon request. The person then submits this certificate to FINA, which opens a protected bank account and informs the payer who was listed by the debtor as the payer of other income.
You can also read the detailed list of income and benefits exempt from enforcement published by FINA.
