Czech Country Guide 2022

Czech

The Czech Republic (Czechia) is a landlocked country in Central Europe, full of architectural and cultural heritage; it is also one of the most peaceful countries in the world, and tanks 6th in terms of ecology and cleanliness. It has some of the lowest prices in Europe, an excellent health care system, and free education, even for foreigners.

The Czech republic boasts beautifully celebrated holidays, a rich cultural life and very hospitable people – the number of foreigners coming to the Czech republic is growing every year.

  • Capital: Prague
  • Spoken Languages: Czech (German, Polish, Hungarian, and Ukrainian as official minority)
  • Currency: Czech Koruna/Crown (CZK)
  • Minimum monthly wage: CZK 16,200 (Gross)

Entry Visa

Citizens of countries in the EU/EFTA Member States or the Schengen area may enter the Czech Republic with an identity card or a valid passport. Other foreign nationals must hold a valid Schengen visa.

Work Permit / Residence Permit

Citizens of EU/EFTA Member States and Switzerland can live and work without a work or residence permit in the Czech Republic.

Other foreign nationals must obtain a work permit, provided they have a job offer. In order for a foreign national to be able to fill a vacancy, the vacancy must first have been offered to Czech or EU citizens through the Ministry of Labor and advertised for 30 days. The application for the work permit is done by the employer.

Non-EU citizens must register with the Foreign Police Department within 3 days of their arrival, and also at their local Foreigners’ Police Inspectorate or an office of the Ministry of Interior within 30 days.

Social Security Registration

Registration for Social Security is compulsory, and it is done wholly by the employer.

Working Hours

A standard working week in the Czech Republic is 8 hours a day/40 hours a week.

An individual may not work more than 8 hours/week and 15-/hours a year overtime, and working for more than 12 hours a day is also not allowed.

Public Holidays

  • 01 January (New Year’s Day)
  • Good Friday (Not a standard date)
  • Easter Monday (Not a standard date)
  • 01 May (Labour Day)
  • 08 May (Liberation Day)
  • 05 July (Day of Slavonic Apostles Cyril and Methodius)
  • 06 July (Anniversary of the Martyrdom of Jan Hus)
  • 28 September (Day of Czech Statehood)
  • 28 October (Day of Founding the Independent Czechoslovak State)
  • 17 November (Day of the Struggle for Freedom and Democracy)
  • 24 December (Christmas Eve)
  • 25 December (Christmas)
  • 26 December (Christmas)

Vacation Allowance

The standard amount of vacation days is 4 weeks. This time must preferably be taken by the end of the year, since unused days are not compensated, and may only be carried forward in certain situations by written request from the employee.

Sick Leave

The standard amount of vacation days is 4 weeks. This time must preferably be taken by the end of the year, since unused days are not compensated, and may only be carried forward in certain situations by written request from the employee.

Maternity / Paternity leave

  • Maternity: 28 weeks (37 for multiple births); at least 6 and at most 8 weeks before birth. The mother receives 70% of their average gross salary during this period.
  • Paternity: 14 days; must be taken as an uninterrupted period within 6 weeks of the birth. The father receives 70% of their average gross salary during this period.

Termination & Severance

Period of continuous employmentAmount of redundancy payment
< 1 Year1 month’s pay
1 – 2 Years2 month’s pay
> 2 Years3 month’s pay

Notice Period

The standard notice period is 2 months for both employer and employee; however, this time-frame can be negotiated during the signing of the employment contract.

Social Security

Employee social insurance contributions are deducted automatically from the wage and paid by the employer. The employer must pay the contributions monthly.

The maximum annual cap for the assessment base for calculation of contributions into the social security system is 48 times the average monthly wage per year. This does not apply for health insurance.

CategoryEmployer (%)Employee (%)
Sickness2.1%
Pension21.5%
State Employment1.2%6.5%
Health Insurance9%4.5%
Total (%)33.8%11%

Pension

Pension in the Czech Republic is covered by Social Security contributions, and all individuals working in the country are eligible to the benefits regardless of their nationality, provided they have reached the required age and have completed a 35 year pension insurance period.

Taxation

The Czech fiscal year runs from January 1 to December 31.

Tax Rates

The following progressive rates apply for 2022:

Taxable Income (CZK)Rate (%)
0 – 1,867,72815%
1,867,729 +23%

Tax Returns

The annual income tax return must be filed by 1 April of the following year (paper form) or by 1 May electronically via a data mailbox or with an electronic signature.

Double Taxation

The Czech Republic has tax treaties with multiple other countries, which can reduce payable tax on certain incomes – if a Double Tax Treaty exists with the individual’s home country, they are only liable to pay taxes based on the provisions of the Czech Republic.

Health Insurance

Foreigners with a long-term residence working in the Czech Republic who do not have public health insurance provided by their employer are required to buy health insurance at a commercial branch of the VZP (Všeobecná zdravotní pojišťovna).

Cost of Living

The cost of living in the Czech Republic is very affordable. The estimated monthly cost for a single person is around CZK 9,000- 17,000, with 6,000 – 10,000 going to rent, depending on the location.


How We Can Help

We provide a full set of services in Czech Republic allowing corporate clients, recruitment agencies and professional contractors to operate in an optimal manner while ensuring that all local employment obligations are taken care of.

Access Financial offers the following solution in Czech Republic:

  • Self-Employed Solution

If you would like to discuss how Access Financial can help in Czech Republic, please contact us.

Disclaimer

WE HAVE PREPARED THIS AS A GUIDE ONLY; IT DOES NOT FORM PART OF AN OFFER. PLEASE REQUEST ILLUSTRATIONS BASED ON YOUR SPECIFIC CASE FROM ONE OF OUR SOLUTION MANAGERS.