Payroll and Benefits Guide Czech Republic

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee

Employee Income Tax

General

Payroll Cycle

General

The standard working week in the Czech Republic consists of 40 hours a week, with a maximum of nine hours per working day.

Overtime

All work above the standard weekly hours is overtime and regulated by employment contracts/collective agreements. When an employee is requested to work overtime or work on holidays, the maximums are eight additional hours per week or 150 hours a year.
All overtime hours in excess of 40 hours per week are paid at an overtime compensation rate of 125.00% of the employee’s regular pay rate.

Working Week

Monday-Friday

Paid Time Off

In the Czech Republic, full-time employees’ standard paid leave entitlement is 20 days per year, although some salaried employees are entitled to 25 days of leave, and teachers receive an entitlement of eight weeks. Further entitlement for leave is outlined in the employment contract/collective agreement.
Employees become eligible after 60 days of service with a single employer, and the employer reserves the right to accept or deny any leave requests due to the demands of the business.

Public Holidays

There are 13 public holidays. Public holidays that fall on the weekend are usually lost.

Sick Days

Employers in the Czech Republic must reimburse the employees for their first 14 days of sickness at 60.00% of their regular salary rate. Starting from the 15th day, the employees receive sick pay from the government.

In this respect, the employers are obliged to collect sickness certificates from the employees, maintain related records and make all required reporting submissions to the social security authorities.

Maternity Leave

In the Czech Republic, a woman is entitled to 28 weeks of maternity leave (37 weeks for multiple births); the employee must take a minimum of 14 weeks. The leave can start at least eight weeks before the expected due date, but no later than six weeks.

Maternity payment starts alongside the maternity leave, calculated at 70% of the regular salary and paid by the Social Security.  The actual amount is dependent on the employee having worked at least 270 days in the last 24 months, together with the amount of contributions made by the employee to the Social Security.

Paternity Leave

The amendment to the Sickness Insurance Act includes a change for new fathers (or those who have taken into their care a child under the age of seven, thereby replacing parental care), they will now be able to receive the paternal post-natal care benefit for two weeks instead of one.

The paid paternity leave at the rate of 70.00% of the employees’ regular salary. The paternity leave can begin six weeks after the birth of the child providing; they have written consent from the mother of the child stipulating that they will be caring for the child during this period.

Parental Leave

The employer is obliged to provide Parental leave under the Labor Code and begins once maternity leave has ended. Parental leave may be granted, upon request, to a mother or father after the end of maternity leave or upon taking a child into their care and until the child reaches the age of 4 years old.

The Labor Office pays the parental allowance of 300,000 CZK (450,000 for multiple births).

Other Leave

Depending on the collective agreement/employment contract terms, an employee may be allowed additional leave types, as approved between the employer and employee:

• Bereavement leave: In the Czech Republic, in the event of the death of an immediate member, an employee is entitled to bereavement leave of up to three days paid leave.
• Care Leave: Employees are entitled to up to 9 days of care leave if caring for a child under the age of 10 or providing care to a sick family member.
• Jury Duty: Czech Republic Leave Laws require all employers to provide their full-time, regularly employed employees, job-protected, unpaid leave for their duty as jurors or as a witness in a case, responding to a subpoena: or acting as a plaintiff or defendant in the courts. Employees must provide a copy of the jury summons to the employer as evidence of the requirement.
• Military Leave: Employees are entitled to leave to take part in compulsory service in armed forces, such as compulsory military service, substitute military service, military exercises, and another service in armed forces, and to take part in civilian service.

Termination Process

The termination process is standard in the Czech Republic, with notice periods required unless an employer can provide sufficient cause for dismissal without notice (due to misconduct, disobedience, lack of skill, neglect of duties, or absence without permission).

Notice Period

In the Czech Republic, the notice period must commence from the first day of the month following the delivery of the notice and must be at least two months. This can be extended upon an agreement between the employer and the employee in writing.

Severance Pay

In Czech Republic, the severance pay is dependent on the employee’s length of service as specified below:

• 1 year of employment: 1 months’ gross salary
• 2 years of employment: 2 months’ gross salary
• 3+ years of employment: 3 months’ gross salary

Probation Period

The Czech Republic’s probationary period depends on the type of role and is stipulated within the employment agreement. In general, probation periods for regular salaried employees are between two and three consecutive months, whereas for chief officers, the probation period can be up to six months.

VISA

Business visitors to the Czech Republic typically use a local version of the Schengen C Visa, which foreign nationals must obtain before arrival in the Czech Republic unless they are visa exempt based on their nationality. The Schengen Area limits stay to 90 days within any 180 days, counted cumulatively across the Schengen Area.

The main work authorization category is the Employee Card, a combined work and residence permit for highly skilled local hires. For intracompany transfers, assignments, and secondments​​, it must be combined with a separate work permit. The Employee Card can be issued for up to two years and is renewable.​​

General

The standard rate of VAT in the Czech Republic is 21.00%.