If you’re working in the Czech Republic as an employee or you’re an employer hiring staff locally, it’s essential to understand how payroll taxation works. Czech payroll consists of three main components: income tax, social security contributions, and health insurance contributions.
Here is an overview of the key elements involved in Czech payroll taxes and contributions as of 2025:
1. Personal Income Tax
Employees in the Czech Republic are subject to personal income tax on their gross salary:
Standard tax rate:
15% on gross income up to 36 times the average salary (in 2025, CZK 1,676,052 annually or CZK 139,671 monthly)Higher tax rate:
23% on income exceeding this threshold
The employer is responsible for withholding and remitting the tax each month.
2. Social Security and Health Insurance Contributions
Both the employee and employer contribute to the Czech social security and health system. However, their contribution rates differ.
Employee Contributions (withheld from gross salary):
Social security: 7.1%
Health insurance: 4.5%
Total: 11.6%
Employer Contributions (on top of gross salary):
Social security: 24.8%
Health insurance: 9.0%
Total: 33.8%
These contributions fund the pension system, unemployment insurance, sickness benefits, and the public healthcare system.
3. Tax Allowances
Employees are entitled to a basic tax credit of CZK 2,570 per month, reducing their monthly tax liability. Additional allowances may apply for dependent children, or a spouse with low income.
4. Super-Gross Salary Abolished
As of 2021, the so-called “super-gross salary” concept (where tax was calculated on gross salary + employer contributions) was abolished. Now, income tax is calculated directly from the gross salary, making the system simpler and more transparent.
5. Employer’s Mandatory Accident Insurance (Kooperativa)
In addition to statutory payroll contributions, employers in the Czech Republic are also required to pay mandatory accident insurance (zákonné pojištění odpovědnosti zaměstnavatele) through Kooperativa, the insurer authorized by law.
This insurance covers the employer’s liability for work-related injuries and occupational diseases.
The contribution rate depends on the classification of the company’s risk profile (based on the NACE industry code) and typically ranges between 0.28% and 5% of the total gross payroll.
Premiums are reported and paid quarterly, and the employer is automatically registered when they hire their first employee.
- While this insurance is not deducted from employees’ salaries, it represents an additional cost for employers and should be considered when budgeting for payroll expenses.
6. Payroll Process
Employers are responsible for:
Registering employees with the Social Security Administration (ČSSZ), a health insurance company, and Kooperativa
Withholding and remitting income tax and contributions each month
Submitting monthly payroll reports to authorities
Issuing the annual tax settlement or confirmation for employees
Summary Example
An employee with a gross salary of CZK 50,000 per month who signed the taxpayer tax declaration (pink form) will see the following deductions:
| Type | Amount (CZK) | % |
|---|---|---|
| Social Security | 3,550 | 7.1% |
| Health Insurance | 2,250 | 4.5% |
| Personal Income Tax | 7,500 | 15% |
| Personal Income Tax – after basic tax discount | 4,930 | |
| Net salary | 39,270 |
Need Help Navigating Czech Payroll?
Whether you’re an expat working in the Czech Republic or an employer hiring locally, understanding the local payroll rules can be tricky. At Expat-Tax.cz, we assist with:
Payroll setup and monthly processing
Employment contracts and registrations
Annual tax settlements and reporting
Employer insurance registration with Kooperativa
Feel free to contact us for a consultation tailored to your situation.