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Payroll and Benefits Guide Czech Republic

Last updated: Feb 04, 2024

Currency
Czech Koruna (CZK)
Employer Taxes
Unknown
Payroll Frequency
Monthly
Employee Costs
11%
Capital
Prague
Date Format
dd/mm/yyyy
Fiscal Year
1 January - 31 December
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Contribution

Employer Employer Payroll Contributions
24.80%
Social Security (covers Pension, sickness and unemployment) applied on income above 2,110,416 CZK annually
9.00%
Health Insurance
33.80%
Total Employment Cost
Employee Employee Payroll Contributions
7.10%
Social Security (covers Pension, sickness and unemployment) applied on income above 2,110,416 CZK annually
4.50%
Health Insurance
11%
Total Employee Cost
Employee Income Tax
15.00%
Up to 1,582,812 CZK
23.00% 1,582,812 CZK and above

Employer taxes

Highest
Lowest

Employee taxes

Highest
Lowest

Minimum Wage

General

In the Czech Republic, the national minimum wage is set at 18,900 CZK per month.

MINIMUM WAGE (PER MONTH)

Highest
Lowest

Payroll

Payroll Cycle

The payroll cycle in the Czech Republic is generally monthly, and payments must be made on the same day of each month and no later than the following calendar month of the work performed.

13th Salary

There is no legal requirement to pay a 13th-month salary. However, many employers pay a 13th-month salary bonus, which is typically performance-based.

Working Hours

General

The standard working week in the Czech Republic consists of 40 hours a week, 8 working hours per day (9 hours including an unpaid lunch break).

Overtime

All work above the standard weekly hours is considered to be overtime and is regulated by the employment contract/collective agreement. A maximum of 8 additional hours per week  and 150 hours a year can be worked as overtime

All overtime hours in excess of 40 hours per week are paid at an overtime compensation rate of 125% of the employee’s regular pay rate. For night or weekend working an additional 10% pay must be given, and those working on a public holiday are entitled to an additional 100% pay or a compensatory day off.

Leave

Annual Leave (vacation)

Full-time employees in the private sector are entitled to paid leave of 4 weeks (20 working days) per year.

Workers in the public sector, and certain other fields, are entitled to paid leave of 5 weeks (25 days) per year, and teachers receive an entitlement of 8 weeks per year. Further entitlement for leave is outlined in the employment contract/collective agreement.

Employees become eligible to take leave after 60 days of service has been worked with a single employer; the employer reserves the right to accept or deny any leave requests due to the demands of the business.

Where possible, all leave should be used within the allotted year, however it is possible to permit workers to carryover a portion of their unused leave into the next calendar year, carryover requests must be in writing and shared in advance with the employer.

Public Holidays

Public holidays that fall on the weekend are usually lost.

Date Day Holiday Notes
 1 Jan 2024 Monday New Year’s Day
29 Mar 2024 Friday Good Friday
1 Apr 2024 Monday Easter Monday
1 May 2024 Wednesday May Day
8 May 2024 Wednesday Liberation Day
5 Jul 2024 Friday St Cyril and St Methodius Day
6 Jul 2024 Saturday Jan Hus Day
28 Sep 2024 Saturday Statehood Day
28 Oct 2024 Monday Independence Day
17 Nov 2024 Sunday Freedom and Democracy Day
24 Dec 2024 Tuesday Christmas Eve
25 Dec 2024 Wednesday Christmas Day
 26 Dec 2024 Thursday 2nd Day of Christmas

Sick Days

Employers must reimburse employees for their first 14 days of sickness. Starting from the 15th day, employees receive sick pay from the Government. Sick pay is 60% of the employee’s average pay for the first 30 days  (inclusive of the days the employer is responsible for), 66% from the 31st to the 60th day, and 72% from the 61st day onwards. Workers are eligible to take up to a total of 380 calendar days of sick leave.

Employers are obliged to collect sickness certificates from employees, maintain related records, and make all required reporting submissions to the Social Security authorities.

Maternity Leave

A woman is entitled to 28 weeks of maternity leave (37 weeks for multiple births); the employee must take a minimum of 14 weeks leave. 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 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 Social Security.

Mothers receive job protection from the beginning of the pregnancy until one year after the maternity leave ends.

Paternity Leave

New fathers (or those who have taken into their care a child under the age of seven), are eligible to receive paternal post-natal care benefit for 2 weeks.
This leave is paid at the rate of 70% of the employee’s regular salary. The paternity leave must begin within six weeks after the birth of the child and must be used on one block. To be eligible for this leave, contributions must have been made to the Social Security for 270 days in the two years prior.

Mothers can also choose to transfer a portion of their maternity leave to the father once the child has reached seven weeks of age. The father will receive parental pay during this leave.

Employees cannot be terminated during Paternity leave.

Parental Leave

Parents are entitled to take parental leave up until the child turns three years old (or 4 years old is the employer agrees). Parents are given a joint parental allowance for the entire period of the leave regardless of how long is taken.

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:

  • Care Leave: Employees are entitled to up to nine days of care leave if caring for a child under the age of 10 or providing care to a sick family member. This leave is paid by the Social Security at a rate of 60% of the employee’s gross salary for up to 9 days. Single parents who are caring for a child can access extended paid leave of up to 16 days until the child reaches the age of 16.
  • Long term Care Leave: In the event that a family member who lives in the same house as the worker spends at least 7 days in the hospital and requires daycare for at least 30 days or more, employees are entitled to long-term attendance allowance to care for this family member, providing that written consent is provided by the person who is cared for. Leave can be for up to 90 calendar days with payment of 60% of their gross salary paid by Social Secuirty.
  • Wedding Leave: Employees are entitled to 2 days of leave for their wedding, of which one day is paid.
  • Bereavement Leave: In the event of the death of an immediate member, an employee is entitled to bereavement leave of up to three days paid leave.
  • Jury Duty: All employers must provide their full-time employees, 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 the armed forces, such as compulsory military service, substitute military service, military exercises, and another service in the armed forces, and to take part in civilian service.
Vacation Days
Public Holidays
Highest
Lowest

Termination

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). Termination with cause is possible under the grounds of dismissal laid out in the Czech Labour code. Just termination reasons include redundancy, business insolvency,  or closes down, certain employee’s health conditions, failure of the worker to meet the requirements of the position or severe breaches of company policies.

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

Severance pay is dependent on the employee’s length of service as specified below:

  • 1 year of employment: 1 month’s 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 is 3 consecutive months, and for chief officers up to 6 months.

Common Benefits

  • Wellness Allowance – approximately 600 EUR per year
  • Meal Allowance –  100 to 300 EUR per month
  • Health Allowance – 200 to 500 EUR per month
  • Additional Annual Leave – 5 additional days per year

VISA

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.

Remote Work

Working from home in the Czech Republic is subject to labor law regulations, governed by Act No. 262/2006, the Labour Code.

According to the Labour Code, remote work is generally permitted for all employees, provided that they have a written agreement with the employer. Working from home can only be implemented under an individual written agreement with an employee. The legislation covers various aspects, such as the procedures for terminating such agreements and reimbursing expenses associated with working from home. Employers are obliged to provide all employees with the required working equipment and supplies (typically IT and office equipment) regardless of the employee’s place of work. Alternatively, the employer may agree that the employee will be reimbursed for purchasing supplies.

VAT

General

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

Stay up to date on payroll & employment law changes

Version History

January 30, 2024
Contribution caps and tax brackets are updated for 2024
January 30, 2024
Minimum wage is increased to 18,900 CZK
July 25, 2022
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.
January 1, 2021
Monthly minimum wage is 15,200 CZK
March 2, 2022
In the Czech Republic, the national minimum wage is now set at 16,200 CZK per month.
Payroll contributions and personal income tax rates have been updated.
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Questions & Answers

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Ross B.
Ross B.
2 years ago

In general, what are the maximum overtime hours i can work in a year?

Erez Greenberg
Erez Greenberg
2 years ago
Reply to  Ross B.

Hi Ross, Employees shouldn’t work more than 150 hours of overtime per year but can work up to 416 hours per week if agreed upon between the employer and employee.

Bejan Valentin
Bejan Valentin
1 year ago

In general, what is the payment for shifts?

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Bejan Valentin

In general, it depends on the contract between the employer and the employee. Czech Republic workers receive a guaranteed wage based on their occupation.

Mica
Mica
1 year ago

Hi!
I am in the last two weeks of the probationary period and I have had an accident that makes it impossible for me to work for the next five weeks. Can the company terminate my contract, even though I am in sick leave?
Thanks in advance.

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Mica

The employer may not give notice of termination during a ‘protection period’, i.e. where:
· an employee is temporarily unfit for work, or
· an employee is conscripted or released from work to exercise a public office, or
· during pregnancy, maternity, or parental leave,
unless the termination is for organizational reasons due to the closure or relocation of the enterprise. There are several exceptions to this rule. We highly recommend seeking legal advice, as there might be additional factors that should be taken into consideration.

Gerrit
Gerrit
1 year ago

Taxes in Czech republic is usually done by the employer. Is this something that Papaya handles? If so, how do tax declarations work for foreigners in Czech republic regarding tax residency? Are you able to process those. or do you usually require additional documents to establish the tax domicile?

Enny Shmurin
Admin
Enny Shmurin
1 month ago
Reply to  Gerrit

Hello, the question is not entirely clear, please provide more context. Via our EOR services, the local team will guide foreign workers.

Mirna
Mirna
10 months ago

How is a terminated employee’s vacation hourly rate calculated? 

Enny Shmurin
Admin
Enny Shmurin
10 months ago
Reply to  Mirna

Vacation time is calculated in terms of hours (full time working week is 40 hours = 4 weeks vacation) and paid at average salary of the previous quarter. Anyone who has worked less than 52 weeks will receive a pro rated calculation.

Sumanth
Sumanth
3 months ago

Are the tax slabs applicable for the 13th Pay as well? If not, how is the 13th pay calculated and paid to the employee?

Enny Shmurin
Admin
Enny Shmurin
3 months ago
Reply to  Sumanth

13th salary in the Czech Republic is not mandatory, therefore we cannot advise on a specific formula. It might be based on an additional salary or performance based.

Antonia Carija
Antonia Carija
22 days ago

Hello, how is the annual leave average pay calculated – from last quarter, okay, but what is icluded in the calculation? Is it the whole gross salary/days you actually worked? or somethign is excluded?

Enny Shmurin
Admin
Enny Shmurin
5 days ago
Reply to  Antonia Carija

During the period of taking leave, the worker is entitled to compensatory wages/salary of 100% of their average earnings.

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Payroll and Benefits Guide in Czech Republic

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Payroll and Benefits Guide
in Czech Republic

What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

And more...

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All questions are answered by our in-house compliance department working in conjunction with our local in-country partner for this specific country

Public Holidays Calendar

Czech Republic
Download:
CSV
PDF
ICS
Date Day Holiday Notes
 1 Jan 2024 Monday New Year’s Day
29 Mar 2024 Friday Good Friday
1 Apr 2024 Monday Easter Monday
1 May 2024 Wednesday May Day
8 May 2024 Wednesday Liberation Day
5 Jul 2024 Friday St Cyril and St Methodius Day
6 Jul 2024 Saturday Jan Hus Day
28 Sep 2024 Saturday Statehood Day
28 Oct 2024 Monday Independence Day
17 Nov 2024 Sunday Freedom and Democracy Day
24 Dec 2024 Tuesday Christmas Eve
25 Dec 2024 Wednesday Christmas Day
 26 Dec 2024 Thursday 2nd Day of Christmas