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 13,350 CZK per month
  • Most collective bargaining agreements are negotiated at the company
  • Employers are required to register employees with the DSSA
  • The DSSA must be notified when an employee leaves the company
  • Employers must withhold income tax (15%) and social security contributions (11%)
  • Foreign workers can be hired for a position that cannot be filled with a Czech or EU national
  • Employers must apply to the Labor Office to be granted the ability to hire foreign workers

Sick Leave Policies:

In accordance with the labor laws in the Czech Republic, sick leave must be ordered by a doctor. First 14 days are paid by employer, from 15th day onwards the remuneration of the absence comes from Social Security office. The same rules apply in case of quarantine. The amount compensated is 60% of the reduced average salary of the employee.

Other type of absence is Care of family member – in case that employee´s child or family member is sick. The reimbursement in this case comes from Social Security insurance for the whole period of the absence. The Ministry of Labor and Social Affairs allows for employees to apply for a nursing benefit, in cases of babysitting a child under 10 years of age, which will not be able to attend school due to the measures in place. The entitlement to this benefit is decided by the relevant District Social Security Administration. The maximum length of the benefit is 9 days. The amount compensated is 60% of the reduced average salary of the employee and it´s paid by social insurance office, not by employer.

Payroll and compliance can be complicated in the Czech Republic, but Blue Marble can help. Our cloud-based payroll technology with customized monthly reporting gives you real-time access to your payroll across all countries and currencies. Our in-country experts can help with local labor and compliance regulations so you can avoid fines and penalties. To learn more about simplifying your payroll and compliance in the Czech Republic, click here