Social and Health Insurance

EU Work-life Balance Directive

EU Work-life Balance Directive

Šárka

The European Council adopted the proposal for a Directive on work-life balance for parents and carers on 13 June 2019.

The European Commission decided to take a broader approach in addressing women’s underrepresentation in the labour market and the work-life balance challenges faced by working parents and carers encouraging better sharing of caring responsibilities between women and men.

The proposal includes the:

> Introduction of at least 10 working days paternity leave. Fathers/equivalent second parents should be able to take this leave around the time of birth of the child, compensated at least at the level of sick pay.

> Strengthening of the existing right to 4 months of parental leave, by making 2 out of the 4 months non-transferable from a parent to another, compensated at a level to be set by Member States and taken in a flexible way (e.g. part-time).

> Introduction of carers’ leave of 5 days per year for workers providing personal care or support to a relative or person living in the same household. 

> Extension of the existing right to request flexible working arrangements (reduced working hours, flexible working hours and flexibility in place of work) to all working parents of children up to at least 8 years old, and all carers.

Brexit & Social and Health Insurance

Brexit & Social and Health Insurance

Šárka

It is still unclear how the Brexit situation will develop. A decision about extension until the end of June 2019 has so far been made in Great Britain, but this postponement still needs to be approved by all EU countries. If the extension is achieved, the current EU rules will remain in operation. In terms of social security and health insurance, this mainly means the regulation on coordination of the social security systems no. 883/2004 and 987/2009.

In case of no-deal, Great Britain would be in the position of a third country with certain advantages for persons, who were in a cross-border situation before the Brexit date. A minimalist European regulation on arrangements for coordination of social security in case of no-deal exit of Great Britain from the EU is being prepared. This new regulation shall contain a rule of equal treatment, the principle of assimilation of facts and aggregation of the periods of insurance. The regulation will probably take effect from the date of Brexit.

Due to the postponement, the option of accepting a deal with the EU is still open, however, the British Parliament has rejected it twice already. If the deal was approved, all current rules regarding social security and health insurance would remain in force until the end of the year 2020. 

Tax Base of Foreign Insured Employees

Tax Base of Foreign Insured Employees

Šárka

Since 1 January 2019 new legislation impacting the calculation of the tax base of employees, who are subject to the obligatory insurance system in the EU, EEA and Switzerland, is effective.

According to the amended legislation, which was signed by the president on December 11, 2018, the calculation of a tax base (so-called super-gross salary) reflects which insurance system the employee is affiliated to. If it is proven that the employee is subject to foreign obligatory insurance of another EU member state or a member of the EEA or Switzerland, the tax base shall be calculated as gross income from employment plus an amount corresponding to the premiums which the employer pays as this obligatory foreign insurance. 

With respect to the calculation of the super-gross salary of employees subject to the Czech insurance system and those of third countries, the tax base remains the same. To assess the tax base for employees subject to the Czech system, the real amount of obligatory insurance contributions paid by the employer shall be added to the gross income; in case of individuals obligatory insured in a third country a hypothetical amount of insurance otherwise due based on the Czech legislation should be added.

The adopted amendment has serious impacts on practice, especially concerning payroll system set-ups. Without the information or confirmation of the real insurance premiums paid by the employers in the EU/EEA it will not be possible to correctly asses the tax on income from employment.

Changes in Freelancers’ Insurance from 2019

Changes in Freelancers’ Insurance from 2019

Šárka

From 1 January 2019, an amendment of acts related to pension and health insurance is taking effect, that brings significant changes in the agenda of self-employed persons’ mandatory insurance. The most important changes relate especially to the regime of advance payments of social and sickness insurance premiums, the due dates and the minimum advance payments amounts. 

New due dates for advance payments

From January 2019, advance payments of pension and sickness insurance premiums will already be paid in the month, to which performance of self-employed activity relates. Instead of the original due date for advance payments of the premium, which was from the 1th to the 20th day of the subsequent month, the new due date will be from the first to the last day of the calendar month, for which the insurance premium is paid. The form of payment does not change, it is still necessary to state the assigned variable symbol identifier when paying the advance payment and to remit the premium to the specified bank connection of the Social Security Administration.

The change in advance payments of insurance premium has occurred mainly due to the option of accelerated issuing of annual overviews of advance payments on the side of the Social Security Administration, which previously had to wait until the due date of the last advance payment, i.e. until 20 January of the following year, to issue an overview of advance payments.

To avoid any confusion, there is no change in connection with advance payments for health insurance. These are still due by the 8th day of the following calendar month.

Minimum monthly social insurance payments

The new minimum monthly base of assessment for pension insurance for self-employed persons performing primary activity reaches CZK 8,175 for the year 2019.

This base of assessment will only apply from January 2019 for self-employed persons, who begin their self-employment in the year 2019. If a self-employed person is paying advance payments of insurance premium in the year 2018 in minimal height, it may continue to pay in this way until the month, when he or she submits or should have submitted the Annual Insurance Report of income and expenses for the year 2018.

  • The minimum monthly advance payment of pension insurance premium for the year 2019 for self-employed persons performing primary self-employment activity reaches CZK 2,388;
  • The minimum monthly advance payment of pension insurance premium for the year 2019 for self-employed persons performing secondary self-employment activity reaches CZK 955.

The minimum advance payments are generally due by self-employed individuals in the course of the first year of business activity and also by freelancers whose assessment base from the previous year is lower than the minimum assessment base.

Minimum monthly sickness insurance payments

The minimum base of assessment for sickness insurance increases due to the increase in average wages and is set at CZK 6,000 in the year 2019. The minimum monthly payment of insurance premium thus increases from the original CZK 115 (advance payments are paid until the end of the year 2018 in this sum) to CZK 138.

Minimum monthly health insurance payments

The minimum amount of advances is calculated from the minimum assessment base.
From 1 January 2019, the minimum annual assessment base is CZK 196,194, the minimum monthly assessment base is CZK 16,349.50 and the minimum monthly advance payment for the premium is CZK 2,208. The first minimum advance payment in this height must be paid already for January, i.e. until 8 February 2019.