Executive summary
The General Financial Directorate (GFD) has clarified how to distinguish genuine employee benefits from in-kind wages for Czech personal income tax purposes under §6(9)(d) of the Income Tax Act. Only non-cash benefits that are not wages, pay, remuneration, or compensation for lost income can be tax-exempt for employees (up to the statutory annual limit). Non-cash rewards tied to work performance remain fully taxable and subject to social and health insurance. The amendment aims to prevent misuse of the tax-exemption for what is effectively remuneration for work.
Why this clarification now?
In 2024, the Supreme Administrative Court issued decisions indicating the prior wording could allow the exemption even for some in-kind remuneration. The legislature therefore amended §6(9)(d) to explicitly state that the exemption applies only to non-cash benefits that are not wages, pay, remuneration, or compensation for lost income. The GFD’s information note (15 Sept 2025) explains the intent and practical consequences.
What has (and hasn’t) changed in §6(9)(d)?
New wording: The statute now expressly limits the exemption to non-cash benefits that are not wages, pay, remuneration or compensation for lost income. If a non-cash item has the nature of remuneration for work performed, the exemption cannot apply.
What remains the same: Genuine employee benefits provided as non-cash benefits from FKSP, a social fund, post-tax profit, or as non-tax-deductible employer costs remain exempt for employees (within the law’s annual cap). On the employer side, related costs are not tax-deductible under §25(1)(h).
Bottom line: the amendment does not abolish the tax-favoured treatment of true benefits—it tightens the definition so the exemption cannot cover in-kind remuneration.
How to tell a benefit from in-kind pay
The GFD anchors the distinction in the Labour Code and common payroll practice: items linked to work performance are remuneration; items granted beyond wages and not tied to performance can be benefits.
Indicators it’s in-kind wage / remuneration (taxable & insured)
It rewards meeting targets, performance, or specific tasks (e.g., quarterly/annual bonuses—whether cash or in kind).
It is conceptually part of remuneration for work under the Labour Code (including forms of naturální mzda).
Such items must be taxed as employment income and included in the social and health insurance base.
Indicators it’s a genuine employee benefit (potentially exempt)
Granted beyond ordinary wages and not for performance.
Typically governed by a collective agreement, internal policy, or similar employer rules.
Aims at socially desirable areas (education, culture, sport, health prevention, recreation, anniversaries).
Common examples the GFD mentions: Multisport cards, cafeteria systems, preventive health services, recreation, life/work anniversary gifts.
In practice, performance-linked items are also generally reflected in the average earnings calculation under the Labour Code, while non-performance benefits are rather not—another sign you’re looking at remuneration vs. a benefit.
Payroll and corporate tax implications
If the item is remuneration (even in kind):
Treat as taxable employment income.
Include in the SS/HI assessment base.
Employer’s related costs are typically tax-deductible.
If the item is a qualifying non-cash benefit:
For the employee: exempt under §6(9)(d) up to the statutory annual limit.
For the employer: costs are non-deductible; funding must be from FKSP, a social fund, post-tax profit, or booked as non-deductible.
The GFD confirms the familiar framework for benefits remains intact—the clarification simply ensures that remuneration in any form cannot slip into the exemption.
Practical checklist for employers
Update your internal policy:
Define which items are benefits (purpose, funding source, annual limits) and which are remuneration. Policies help demonstrate the non-performance nature of benefits.Check funding & accounting:
Finance exempt benefits from FKSP/social fund/post-tax profit or book as non-deductible costs; don’t mix with deductible remuneration budgets.Tie-breaker test:
Ask: Would we grant this if the employee hadn’t met performance goals? If “no,” it’s remuneration—tax & insure it.Average earnings consistency:
Items that belong in average earnings calculations are typically remuneration, not benefits.Cap monitoring:
Track the annual statutory limit across all §6(9)(d) non-cash benefits per employee; any excess becomes taxable. (The GFD note reiterates the exemption remains, not the numeric cap itself.)Communication & documentation:
Inform employees, keep supporting records (policies, benefit catalogues, funding source), and align HR–Payroll–Tax.
Frequently asked questions
Does the clarification change the annual cap for tax-exempt benefits?
No. The note explains what counts as a benefit vs. remuneration; it doesn’t change the statutory cap.
Are gift cards or vouchers exempt?
Only if they are non-cash benefits in the permitted areas (e.g., culture/sport/health/recreation) and not tied to performance. If used as a reward for results, they become taxable remuneration.
Can “non-cash bonuses” for targets be exempt?
No. If the essence is remuneration for work, the form (cash vs. in-kind) does not matter—tax & insure it.