The Czech Republic is located in central Europe with a population of more than 10 million people. There are a wide variety of business opportunities in a range of industries from engineering and biotechnology to healthcare and education.

New companies must obtain a business or trade license and register with the Company Register to begin operations. There are several company types in the Czech Republic including Limited Liability Companies and General Commercial Partnerships. The corporate tax rate is 19% and there are required tax installments and advanced payments.

Labor and Payroll considerations in the Czech Republic:

  • Employment contracts must be in writing
  • Minimum wage is CZK 14,600 per month
  • Overtime is paid at 25% above the hourly earnings
  • An employee receives severance pay if they are dismissed for employee redundancy or company closing/relocation. Depending on length of service the pay can be up to 3 times their average salary
  • Anyone living in the Czech Republic for 183 days is considered a resident and must pay taxes. The tax rate for applicable income is 15%

HR and Statutory Requirements

  • Employees are entitled to annual paid leave after working for an entire calendar year. Standard leave is 4 weeks and government employees receive 5 weeks
  • Sick time is granted under the sickness insurance and is a graduated system depending on length of illness
  • Female employees is entitled to 28 weeks of maternity leave, including 6 weeks before childbirth. The Czech Health Insurance Fund pays for maternity leave
  • Insured fathers are entitled to 7 days of paid leave
  • A person’s retirement age depends on their year of birth, their sex, and number of children raised (for women). The amount of pension includes 2 parts: basic assessment (10% of the relevant average wage) and percentage assessment (CZK 3,490/month as of 2020)

Holidays in Czech Republic:

  • January 1 – New Year’s Day / Restoration of the Czech Independence Day
  • April 15 – Good Friday
  • April 18 – Easter Monday
  • May 1 – Labor Day / May Day
  • May 8 – Victory in Europe Day
  • July 5 – Day of Saints Cyril and Methodius
  • July 6 – Jan Hus Day
  • September 28 – St. Wenceslas Day
  • October 28 – Independent Czechoslovak State Day
  • November 17 – Struggle for Freedom and Democracy Day
  • December 24 – Christmas Eve
  • December 25 – Christmas Day
  • December 26 – St. Stephen’s Day

Simplify your payroll and compliance in the Czech Republic with a cloud-based payroll platform and customized monthly reporting. Get real-time access to your payroll across all countries and currencies, integrated money movement to fund payroll, and in-country experts to help when questions come up. To learn more about simplifying your payroll and compliance in the Czech Republic, click here