Payroll
From gross salary to net, the Czech way
Since 2021 the super-gross salary base is gone. Net salary is calculated from gross, which makes life simpler and closer to how salaries work in most other countries.
Employee contributions
- Social insurance: 7.1 percent of gross.
- Health insurance: 4.5 percent of gross.
- Income tax: 15 percent up to 36 times the average wage per year, 23 percent above.
Employer contributions
- Social insurance: 24.8 percent.
- Health insurance: 9 percent.
Total employer cost is therefore roughly 1.338 times gross salary. That is what your employer really pays for you.
Personal tax credits (slevy na dani)
These reduce your income tax directly, not the base:
- Basic taxpayer credit: 30,840 CZK per year (2,570 monthly).
- Spouse credit: 24,840 CZK if the spouse earns under 68,000 CZK.
- Child tax bonus: 15,204 CZK first child, 22,320 second, 27,840 third and further.
Foreign residents can claim these once they hit at least 90 percent of their total worldwide income in Czechia and sign the Czech tax residency form (prohlaseni poplatnika).
Foreign residents and 183 days
If you spend at least 183 days a year in Czechia or your center of vital interests is here, you are a Czech tax resident and taxed on worldwide income. Otherwise you are a non-resident and taxed only on Czech-source income, at 15 percent (or 23 above the high band) with a limited set of deductions.