Payroll in Czech Republic

Thinking about hiring in Czech Republic? To stay compliant and keep things running smoothly, you’ll need to understand the local rules around HR, payroll, social security, and taxes. Discover the key information laid out for you below.

Payroll in Czech Republic

HR and labor laws in Czech Republic

When you’re hiring in Czech Republic, it’s crucial to understand local labor laws. From contracts and working hours to leave entitlements and dismissal procedures, here’ swhat you should know about specific laws in Czech Republic.

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Employment contracts

Must be in writing and include details such as job title, salary, and working hours.

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Working hours

The standard workweek is 40 hours. Overtime must be compensated either with extra pay or additional time off.

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Leave policies

Employees are entitled to at least 4 weeks of paid vacation per year.

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Probation period

Up to 3 months for regular employees and up to 6 months for managerial roles.

Payroll management

Paying your team right means following the local payroll laws and protecting your business from fines or legal issues. Here are the payroll essentials in Czech Republic:

Minimum wage in Czech Republic

The government sets the minimum wage annually. For 2023, the minimum monthly wage is CZK 17,300.

Pay slip

Employers are required to provideemployees with a detailed monthly pay slip.

Social security in Czech Republic

The social security system in Czech Republic acts as a safety net for your employees, offering protection in key moments throughout their careers and lives. It’s designed to provide financial support during live events like illness, maternity, unemployment or retirement. Discover how the social security system works in Czech Republic:

Contributions

Both employers and employees pay into the social security system, which covers pensions, healthcare, and unemployment benefits.

Retirement

The retirement age depends on the employee’s year of birth and ranges between 63 and 65 years old.

Workplace protections

Creating a fair and safe workplace matters. These laws help protect your employees in Czech Republic:

Parental leave

Parents are entitled to parental leave until their child reaches the age of 3.

Sick leave

Employees are entitled to sick leave. The first 14 days are paid by the employer; after that, benefits are provided by the social security system.

Tax regulations in Czech Republic

Taxes can be tricky. Understanding how the system works in Czech Republic, helps you avoid surprises and stay compliant. Here are some tax basics to keep in mind:

Income tax

Personal income is taxed progressively. The base rate is 15%, with a higher rate of 23% applying to income above a certain threshold.

VAT

The standard value-added tax (VAT) rate is 21%, with reduced rates of 15% and 10% for specific goods and services.

Paybix helps you managing your payroll in Czech Republic

Running payroll in Europe, payroll in EMEA country's or payroll worldwide takes local knowhow. With Paybix, you’ll get expert support, tailored to each country your business in situated in. Thanks to our unified and digital platform, you gather clear insight in labor costs and cross-country payroll. You benefit from a 30% more efficient payroll process, including global reporting and core HR data management. Hassle-free, user-friendly and easy integrated with local payroll providers for your payroll in Germany, payroll in the United Kingdom, payroll in Spain and payroll in almost any country.

To ensurefull compliance with the latest regulations, Paybix consults with local legal partners and payroll providers. Get in touch with our experts. We provide you with accurate and up-to-date information.

Ready to optimize your payroll processes? Contact us. Book your free and personalised demo. Discover our data-driven solutions for your business success.

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