Social security contributions
Act No. 589/1992, as amended, regulates social security contributions, which include the premiums for pension insurance and for sickness insurance and the contribution to the state employment policy. Social security contributions constitute earnings of the state budget.
The contributions must be paid by all tax-payers, who are:
- employers, who employ at least one employee whose employment establishes their participation in the sickness insurance and in the pension insurance
- employees, whose employment establishes their participation in the sickness insurance and the pension insurance,
- self-employed persons, if they participate in the pension insurance
- self-employed persons who are voluntary participants in the sickness insurance,
- persons who have registered for voluntary participation in the pension insurance as enabled by section 6 of Pension Insurance Act No. 155/1995 Coll., as amended.
The 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 persons with pension insurance,
- the calendar month as for the self-employed persons with sickness insurance, as well as for individuals who participate voluntarily in the pension insurance
The employee’s assessment base for the contributions is the sum of the earnings which are subject to income tax according to the Income Tax Act (Act No. 589/1992 Coll.) and are not exempted from this tax and which the employer has provided the employee in association with the employment which establishes said employee’s participation in the sickness insurance.
The employer’s assessment base is the sum of the assessment bases of its employees.
The assessment base of a self-employed person for pension insurance premiums and the contribution to the state employment policy is the amount which said individual designates, but which is not less than 50% of said individual’s usual tax base according to the Income Tax Act.
The amount of the assessment base for a self-employed person may not be lower than
- 25% of the average wage (as for the self-employed who have carried out main/full-time independent gainful activity)
- 10% of the average wage (as for the self-employed who have carried out subsidiary/parttime independent gainful activity)
Levels of the minimum amounts of assessment base for self-employed persons can be found on Czech Social Security Administration’s website: Link here.
A self-employed person may, upon meeting certain requirements, opt for the lump sum tax and pay taxes, social security and healthcare contributions as a lump sum. Since January 2023 there are three lump sum tax bands depending on the amount and character of the taxpayer’s income.
The assessment base for a self-employed person for the payment of sickness insurance contributions is the monthly basis designated by the self-employed person within a given minimum and maximum. The minimum is twice the decisive income of employees determined in accordance with the sickness insurance legislation for participating in the sickness insurance. The monthly basis must not be higher than the monthly average calculated from the self-employed person’s assessment base for pension insurance reported on the last statement on income and expenses submitted be the self-employed person. For those participating in the lump sum tax regime, the assessment base can not be higher than assessment base for the corresponding lump sum tax band.
The assessment base for individuals who have voluntarily registered for participation in pension insurance is the amount which they designate, but at least 25% of the average wage.
The maximum assessment base is defined as 48 times the monthly average wage.
Following contribution rates are set by Act No. 589/1992 Coll., as amended:
- for employers
- 24.8% of the assessment base, from which 2.1% on sickness insurance, 21.5% on pension insurance and 1.2% on state employment policy
- for employees
- 6.5% of the assessment base
- for self-employed
- 29.2% of the assessment base, from which 28% on pension insurance and 1.2% on state employment policy
- 2.1% of the assessment base on sickness insurance for self-employed persons participating in the sickness insurance
- for individuals voluntarily participating in the pension insurance
- 28% of the assessment base
- for foreign employees
- 2.1% of the assessment base
From February 2023, the employer can apply a discount on the social security contributions for certain employees (including a specified range of part-time workers and employees under the age of 21) in the amount of 5% of the total assessment base of the employees to which the discount is applied.
The employer is obliged to pay his and his employees ‘contributions for the given calendar month by the 20th day of the following calendar month. The contributions are paid in the Czech currency and the employer will be considered to have paid the contributions on the day when the payment of the contributions are credited to the appropriate account of the District Social Security Administration.
If the contributions are not paid within the designated deadline or if it is paid at a lower amount than should have been paid, the payer of the contributions 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 social security contributions can be found on the Czech Social Security Administration’s website: https://www.cssz.cz/web/lang/platby-a-vyse-pojistneho
Poslední aktualizace: 18. 1. 2023