Salary payment is one of the fundamental aspects of an employment relationship, yet in practice it continues to raise a number of questions. This is especially true when it comes to which account an employer may use to pay a salary, whether it can be paid to a third party’s account or a digital account such as Revolut, and whether cash payments are allowed.

The reason lies in recent legislative changes that have further clarified how employment-related income must be paid, as well as the development of financial services, which has opened up new practical questions.

Salary as a legal and constitutional category

Salary is not merely a contractual obligation between employer and employee, but also one of the employee’s fundamental rights. It represents compensation for work performed and is the primary source of livelihood for the employee and their family.

The Labour Act clearly stipulates that the employer is obliged to calculate and pay the salary in accordance with the employment contract, collective agreement, or internal regulations. In addition, the right to salary has a constitutional dimension, meaning that failure to pay it is not only a breach of employment obligations but also a violation of fundamental rights.

Salary must be agreed in gross amount

One of the key legislative changes relates to the obligation to agree salary in a gross amount. This means that the salary must include both the net amount paid to the employee and all related public contributions.

In practice, this means that it is no longer permitted to agree on salary in net terms. If an employer does so, they may face significant penalties, which further highlights the importance of proper salary structuring and calculation.

Which accounts are acceptable for salary payments

Under current legislation, salary, salary compensation, and other monetary benefits must be paid into the employee’s transaction account.

A transaction account includes accounts used for everyday financial operations, such as current accounts and giro accounts. The key rule is that the account must be opened in the employee’s name, meaning that an employer may not pay salary into the account of a family member or any third party.

This rule ensures transparency and helps prevent potential misuse or concealment of actual income.

Can salary be paid to Revolut or similar accounts?

With the development of digital banking services, the question increasingly arises whether salaries can be paid into accounts such as Revolut.

In practice, such payments are allowed, provided that the account functions as a transaction account and is opened in the employee’s name. Since these institutions are now authorized to provide payment services in Croatia, there is no legal obstacle to paying salaries into such accounts.

However, the situation changes in the case of wage garnishment. If an employee has a protected account opened under the order of FINA, the employer is obliged to pay part of the salary into that account, regardless of the employee’s request. Only after receiving official notice that the enforcement has ended can the full amount be paid to another account.

Wage garnishment and employer obligations

When enforcement proceedings are initiated against an employee, the method of salary payment becomes more complex. In such cases, the salary is divided into a protected and a non-protected portion, in accordance with enforcement regulations.

The protected portion is paid into a special account, while the non-protected portion may be paid directly to the creditor or to the employee’s regular account, depending on the type of enforcement.

It is important to emphasize that the employer must strictly follow the prescribed rules in such situations, as incorrect payment may result in penalties.

Is cash payment of salary allowed?

A common question concerns whether salaries can be paid in cash. Current regulations clearly state that the payment of salary and salary compensation in cash is not permitted.

Salaries must be paid exclusively through transaction accounts to ensure transparency and traceability.

Exceptions exist only for certain other types of payments, such as daily allowances, reimbursements of expenses, or occasional bonuses, which may be paid in cash under specific conditions.

Can an employee waive their salary?

The law further protects the employee’s right to salary by stipulating that an employee cannot waive their right to receive it. Any agreement between employer and employee to that effect is considered null and void.

This means that the employer is obliged to pay the salary regardless of any arrangements that would be detrimental to the employee.

Conclusion

The method of salary payment is now clearly regulated, but in practice there are still situations that require careful interpretation and attention. Issues related to enforcement, digital accounts, and the proper distinction between permitted forms of payment are particularly sensitive.

The greatest risk for employers lies not in the rules themselves, but in their incorrect application, which may lead to financial penalties and legal consequences.

If you are unsure whether your salary payments comply with current regulations or if you are dealing with specific situations such as enforcement procedures, payments to foreign accounts, or complex payroll calculations, brandom can help.

Contact us to ensure that your payroll processes are fully compliant with legislation while minimizing risks for your business.