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Information about social security insurance contributions

Act No. 589/1992, as amended, regulates social security insurance contributions, which include the insurance contributions for pension insurance and for sickness insurance and the contribution to the National employment policy (hereafter simply referred to as the “insurance contribution”). The insurance contribution constitutes earnings of the state budget.

The insurance contribution must be paid by all tax payers, who are:

  • employers, who employ at least one employee whose employment establishes said employee’s participation in the sickness insurance scheme or only the pension insurance scheme,
  • employees, whose employment establishes their participation in the sickness insurance scheme or only the pension insurance scheme,
  • self-employed individuals, if they are participants in the pension insurance scheme (self-employed individuals are also obliged to pay insurance contributions in instalments in some cases),
  • self-employed individuals who are voluntary participants in the sickness insurance scheme,
  • individuals who have registered for voluntary participation in the pension insurance scheme as enabled by section 6 of Pension Insurance Act No. 155/1995, as amended,

The insurance contributions are paid upon the basis of the tax payer’s assessment base using the appropriate percentage rate.

The assessment base is ascertained from the decisive period which is

  • the calendar month, for which the insurance contribution is paid, as for the employers and employees,
  • the calendar year for which the insurance is paid as for the self-employed with pension insurance,
  • the calendar month as for the self-employed with sickness insurance, as well as for individuals who participate voluntarily in the pension insurance scheme or who have registered for voluntary sickness or pension insurance.

The employee’s assessment base for the insurance contribution is the sum of the earnings which are subject to physical entity income tax according to the Income Tax Act and are not exempted from this tax and which the employer has charged for the employee in association with the employment which establishes said employee’s participation in the sickness insurance scheme or participation in only the pension insurance scheme, with the exception of the so-called “exempt earnings” which are set out in section 5, subsection 2 of Act No. 589/1992, as amended.

The charging of the earnings is understood to mean the performance which has been provided to the employee by the employer in a monetary or non-monetary form or in the form of benefits or has been submitted to the employee’s advantage or credited to the employee or involves any other form of performance provided by the employer on behalf of the employee.

The employer’s assessment base is

  • the sum of the assessment bases of its employees, whose employment establishes their participation in the sickness insurance scheme and
  • the sum of the assessment bases of its employees, whose employment only establishes their participation in the pension insurance scheme, if the employer has any such employees.

The assessment base of a self-employed individual for insurance contributions to pension insurance and the contribution to the National employment policy is the amount which said individual designates, but which is not less than 50 % of said individual’s usual tax base. Furthermore, the tax base is understood to mean the tax base or partial tax base designated according to section 7 of the Act governing income tax on earnings from business and from other independently gainful activities after the modification according to section 5 and section 23 of the Income Tax Act.

The amount of the assessment base for a self-employed person for 2011 may not be lower than

  • 74,220 CZK (as for the self-employed who have carried out independently gainful activities throughout the entire year and has not had any so-called qualified reasons for the reduction of this amount),
  • 29,688 CZK (as for the self-employed who have carried out secondary independently gainful activities throughout the entire year and have not had any so-called qualified reasons for the reduction of this amount).

The assessment base for a self-employed individual for the payment of sickness insurance is the monthly basis designated by the self-employed individual which must not be lower than 4,000 CZK.

The monthly basis must not be higher than the assessment base of a self-employed individual for advance premium payments to pension insurance.

This amount must not exceed 1/12 of the maximum assessment base (in 2011 it is 148 440 CZK).

The assessment base for individuals who have voluntarily registered for participation in pension insurance is the amount which they designate, but at least 1 of their average wage, i.e. the amount of 6 185 CZK for 2011.

The maximum assessment base for 2011 amounts to 1 781 280 CZK (i.e. 72 times the average wage).

The insurance contribution is paid upon the basis of the assessment base, which amounts to:

  • for employers
    • 25 % of the assessment base which is the sum of the assessment bases of the employer’s employees, whose employment establishes their participation in the sickness insurance scheme,
    • 21.5 % of the assessment base which is the sum of the assessment bases of the employer’s employees, whose employment establishes their participation only in the pension insurance scheme.
  • for employees
    • 6.5 % of the assessment base
  • for self-employed individuals
    • 29.2% of the assessment base
  • for self-employed individuals in the sickness insurance scheme
    • 2,3 % of the assessment base
  • individuals voluntarily participating in the pension insurance scheme
    • 28 % of the assessment base

Each of the aforementioned tax payers are insurance contribution payers, with the exception of employees, because the employer is obliged to also levy the insurance contributions which the employee is obliged to pay.

The employer is obliged to pay the insurance contributions for the given calendar month by the 20th day of the following calendar month. The insurance contributions are paid in the Czech currency and the employer will be considered to have paid the insurance contribution on the day when the payment of the insurance contribution is credited to the appropriate account of the district social security administration or to the account of the payment services provider for the given administration.

If the insurance is not paid within the designated deadline or if it is paid at a lower amount than should have been paid, the insurance contribution payer will be obliged to pay a penalty. The penalty amounts to 0.05% of the outstanding amount for every calendar day, in which any of these facts occurred.

Further information on the insurance contributions for social security can be found on the Czech Social Security Administration’s website: www.cssz.cz

Author: Odbor 71
Updated: 10.1.2011

Nastavení zobrazení:

Shown / printed from website of Ministry of Labour and Social Affairs of the Czech Republic (http://www.mpsv.cz) on 23.10. 2017 000 01:03.