Workforce Payments Guide Croatia

Last updated: Dec 18, 2023

Currency
Euro (EUR)
Payroll Frequency
Monthly
Capital
Zagreb
Fiscal Year
1 January - 31 December
Employer Taxes
16.50%
Employee Costs
14.00%
Central Bank
Croatian National Bank (CNB)
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3rd Party Payments

Authority  Payment Frequency  Due Date  Payment Method 
Corporate Income Tax (CIT)  Monthly  Within four months of company’s year end  Wire Transfer 

 

Personal Income Tax (PIT)  Depends on income type and taxpayer’s circumstances  End of January or end of February, depending on taxpayer’s circumstances  Wire Transfer 

 

Pension Insurance  Monthly  15th of the following month  Wire Transfer 

 

Health Insurance 

 

Monthly 

 

15th of the following month 

 

Wire Transfer 

 

Tax 

 

Monthly 

 

15th of the following month 

 

Wire Transfer 

 

 

Payments Coverage

Papaya Global supports workforce payments in Croatia, with potential local requirements.

Contractor Payments

Papaya Global supports payments to contractors in Croatia. The payout currency may vary based on the receiver bank account setup when receiving foreign currencies. Contractors are advised to reach out to their bank to confirm how foreign currencies are handled

Payroll Frequency

Monthly

IBAN

IBAN Example Croatia

HR7723400094691677965

IBAN in print

HR77 2340 0094 6916 7796 5

Country Code HR
Digit Code 77
Bank Code 2340009
Bank Account Number 4691677965

KYC

The KYC process in Croatia involves a comprehensive process for customer verification. It uses Accura Scan, a solution that specializes in Global Digital KYC, Customer Onboarding, and Identity Verification. It verifies all types of Croatian national ID cards, driver’s licenses, and passports in about 10 seconds using a mobile camera. It uses AI and OCR technology for data extraction and validation from these documents.

This process also includes a swift, bank-level identity verification system that authenticates customer’s ID cards, passports issued by the General Police Directorate – Ministry of Interior Affairs, and driving licenses issued by the Road Police – Ministry of Interior Affairs.

The KYC process aligns with Anti-Money Laundering (AML) and KYC regulatory guidelines, allowing businesses to assess and monitor customer risks and protect against fraudulent individuals. The KYC solution integrates seamlessly into the business system, streamlining the onboarding process and identifying potential red flags. It also includes video-based automated KYC solutions for efficient onboarding, risk mitigation, and business growth.

The process also involves complying with regulatory requirements to identify and verify Ultimate Beneficial Owners (UBOs) to adhere to Anti-Money Laundering (AML) regulations. Thorough KYC due diligence is conducted, which involves identifying and verifying individuals with ultimate ownership or control over a business.

Various methods are used for identifying and verifying UBOs, including gathering information directly from the company, such as registration documents, company addresses, and licensing records.

Finally, the KYC process in Croatia also involves AML services for Croatian banks and businesses to identify high-risk clients. PEP screening and real-time sanction list monitoring is conducted for faster client onboarding. Continuous monitoring processes and robust AML screening are implemented to ensure compliance with regulations and effectively mitigate global money laundering risks.

Banking Regulations

Here are some regulations that affect cross-border workforce payments and international payroll:

Foreign Workers: For foreign workers, the gross salary must be equal to at least 1.5 times the average gross salary paid in Croatia, considering the salaries a year ago.

Cross-Border Payments Regulation: For cross-border payments, payment service providers are required to disclose an estimate of the applicable currency conversion charges, as well as the estimated total amount of the credit transfer in the currency of the consumer’s account, including the costs deriving from any transaction fee and any currency conversion charges applied by the payer’s payment service provider.

Opening a Bank Account

To open a company bank account in Croatia, the requirements include:

  • A copy of the articles of association of the company
  • A copy of the decision on the appointment of the company’s representative
  • The company’s court registry extract
  • Proof of deposit of the share capital
  • A copy of the identity card or passport of the representative
  • A copy of the OIB (personal identification number) of the representative

Once all the required documents are gathered, you can go to your chosen bank and complete the process which involves filling out forms, signing a contract and depositing a certain amount.

The entire process can take approximately an hour and you will receive the account number and online access codes the following day. However, you’ll need to wait for your ATM card, which will arrive in five to ten business days.

International Banks

The major foreign banks operating in Croatia are:

  • Zagrebacka banka d.d. (Italy): Part of the Italian UniCredit group.
  • Privredna banka Zagreb d.d. (Italy): A member of the Intesa Sanpaolo Group, a leader in Italian banking.
  • Erste&Steiermarkische Bank d.d. (Austria)
  • OTP banka d.d. (Hungary): Part of the Hungarian OTP Group.
  • Raiffeisenbank Austria d.d. (Austria): Part of the Austrian RBA group.
  • Addiko Bank d.d. (Austria)
  • J&T banka d.d. (Czech Republic)

Major Local Banks

The major local banks operating in Croatia include:

  • Addiko Bank d.d.
  • Agram banka d.d.
  • Banka Kovanica d.d.
  • Croatia banka d.d.
  • Erste&Steiermarkische Bank d.d.
  • Hrvatska postanska banka d.d.
  • Imex banka d.d.
  • Istarska kreditna banka Umag d.d.
  • J&T banka d.d.
  • Karlovacka banka d.d.
  • KentBank d.d.
  • OTP banka d.d.
  • Partner banka d.d.
  • Podravska banka d.d.
  • Privredna banka Zagreb d.d.
  • Raiffeisenbank Austria d.d.
  • Samoborska banka d.d.
  • Slatinska banka d.d.
  • Wustenrot stambena stedionica d.d.
  • Zagrebacka banka d.d.

Payment Tools

The B2C payment tools available in Croatia include:

  • Paypal
  • Credit/Debit cards such as Visa, Mastercard, American Express, Maestro, and Diners Club credit cards
  • E-wallets like Apple Pay and Google Pay
  • Local payment gateways like Monei, Fondy, Mollie, TrustPay, and Reepay
  • Instant bank transfer
  • Mobile solutions such as the mobile payments application Settle and mHPB offered by Hrvatska postanska banka
  • Online banking through Hrvatska poštanska banka
  • Cash on delivery
  • Contactless cards.

Cryptocurrency

In Croatia, it is technically possible to pay employees with cryptocurrencies. However, these payments are considered benefits in kind according to the Personal Income Tax Act. Taxes must be calculated for this type of payment based on the market price of the paid cryptocurrencies on the day of the salary transfer.

However, the Croatian Tax Administration has stated that cryptocurrencies, being virtual, decentralized, outside the jurisdiction of monetary authorities, and anonymous, cannot be used as a means of paying salaries. Furthermore, cryptocurrencies are not recognized as a legal means of payment, foreign currency, or foreign payment instruments in Croatia.

The country does not regulate cryptocurrency transactions or issue licenses to cryptocurrency firms, but it enforces anti-money laundering regulations that cover certain types of cryptocurrency enterprises.

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