Czech Republic Payroll Guide
HR & Payroll in the Czech Republic
Good to know
- Local currency: Czech Koruna (CZK)
- Minimum Salary: CZK 18,900 or CZK 112.50 per hour (2024)
- Salary Calculation : gross to net Average Working Hours: 40 Hours a Week Overtime is allowed, provided that the work week (including overtime) does not exceed an average of 48 hours over a four-month period.
- Paid Leave: the legal period of annual leave is 4 weeks. A longer period may be defined by collective agreements.
About the Czech Republic
The Czech Republic is a central European country and is boarded by Poland to the north-east, Germany to the north-west and west, Austria to the south and Slovakia to the south-east.
The architectural splendours of the country fascinate most visitors. There are some of the most beautiful buildings in the Czech Republic, Art Nouveau and cubists from Europe. The Czechs excel in other forms of artistic expression such as religious sculptures or illuminations.
The Czech Republic has one of the most industrialized and developed economies. It is a preferred destination for foreign direct investment in Central Europe.
Fun Fact: Prague Castle is the largest ancient castle in the world. In fact, the Czech Republic has more than 2,000 castles throughout the country.
Are you planning to settle in the Czech Republic? Do you need help with payroll or human resources management? Our Czech payroll and human resources experts will provide you with a fast and accurate service in full compliance with Czech legislation.
The Czech Social Security System (for employees)
The Czech social security system covers sickness and maternity, old age, disability and survivors, occupational injuries and diseases, unemployment and family benefits. With a few exceptions, employees in the private sector are obliged to be covered for all risks, either on the basis of their residence or on the basis of their professional activity.
The Czech social security system is largely financed by employee and employer contributions. Family benefits and dependency allowances are financed entirely by taxes.
Source : The Cleiss
Administrative Organization
Pension and sickness-maternity insurance (cash benefits)
The Czech Social Security Administration – ČSSZ (Česká Správa Sociálního Zabezpečení) – collects contributions, sets and provides cash benefits for old-age, disability, survivors’ and sickness-maternity insurance.
The ČSSZ also has a department responsible for assessing the health status and work capacity of insured persons.
Unemployment Insurance
Unemployment benefits are paid by the local offices of the Labor Office of the Czech Republic (Úřad práce ČR), under the supervision of the Employment Department (Sekce zaměstnanosti) of the Ministry of Labor and Social Affairs. The local offices are also responsible for collecting information about job seekers and organizing employment promotion programs.
Health Care
Medical services are provided by health centers, hospitals and other health care professionals who have concluded a contract with a Czech health insurance fund. The insured chooses a health insurance fund from among the 7 that are responsible for administering insurance. The main one is the General Health Insurance Company (Všeobecná zdravotní pojišťovna ČR).
Workplace accidents & occupational diseases
Two private insurance companies are in charge of the management of the occupational accidents and diseases insurance:
Generali Česká pojišťovna a.s
Kooperativa pojišťovna, a.s.
Family Benefits
Family benefits are administered by the Labor Office of the Czech Republic (Úřad práce ČR) and its local offices. The Labor Office also handles social assistance benefits, including the dependency allowance.
Social Contributions in the Czech Republic
The table below shows the contribution percentages for salaried employees.
| Risks | Employer | Employee | Annual Ceiling |
|---|---|---|---|
| Sickness, maternity – cash benefits | 2,1 % | – | 2 110 416 CZK |
| Health Care (1) | 9 % | 4,5 % | – |
| Old age, disability, death | 21,5 % | 6,5 % | 2 110 416 CZK |
| Workplace accidents and occupational diseases | Depending on the risk (2) | – | – |
| Unemployment | 1,2 % | – | 2 110 416 CZK |
- (1) The calculation basis must be at least the minimum wage, i.e. CZK 18,900 per month.
- (2) Contributions range from 0.28% to 5.04% of gross salary. The minimum contribution is CZK 100 per quarter.
Personal Income Tax
The Czech Republic applies progressive taxation on income of tax res residents as follows
Gross income up to the social security payment ceiling (48 times the average wage) is subject to a 15% rate.
The gross income exceeding this threshold is subject to a rate of 23%.
Source : gov.cz
Our HR & Payroll Experts are Ready to Help
Payroll and HR are different in each country and to each business. Trust one of our local experts to ensure your company’s compliance in the Czech Republic.
- Our Payroll and HR services in the Czech Republic
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