Taxes and Contributions in the Czech Republic: A Detailed Overview at the End of 2025 and Changes for 2026

The tax and contribution system in the Czech Republic includes personal income tax, social insurance, and health insurance. These mandatory payments apply to both employees and employers and represent a significant part of employment costs as well as an employee’s income. Below is a summary of the official rules for 2025, as well as the key changes effective from 1 January 2026.

1. Personal income tax (employee)

Personal income tax on dependent activity (employment) in the Czech Republic is calculated from the gross salary. Tax rates are progressive:

• 15% on income up to a certain threshold
• 23% on income exceeding this threshold

Income tax is usually withheld by the employer as an advance payment. Employees may apply various tax allowances and deductions (e.g. the basic taxpayer allowance, child allowance, spouse allowance, etc.) if they have signed the tax declaration.

2. Social and health insurance – detailed rates

Social and health insurance contributions are shared between the employee and the employer. These contributions are mandatory and finance pensions, sickness benefits, healthcare, and other social programs.

2.1 Employee contributions

• Social insurance: 7.1% of gross salary (6.5% pension insurance and 0.6% sickness insurance)
• Health insurance: 4.5% of gross salary

2.2 Employer contributions

• Social insurance: 24.8% of gross salary
• Health insurance: 9.0% of gross salary

Note: Health insurance has no upper limit, meaning it is paid on the full salary. Social insurance, however, is subject to a maximum annual assessment base.

3. Maximum assessment base and progressive taxation

The maximum annual assessment base is the amount above which social insurance contributions are no longer paid once it is reached.

4. Work agreements (DPP and DPČ) – limits and contributions

Employment under a Contract for Work Performance (DPP) and a Contract for Work Activity (DPČ) is subject to specific rules:

• 2025 (DPP): the threshold for paying social and health insurance was 25% of the average wage, i.e. CZK 11,500. If remuneration did not exceed this amount, no contributions were due (provided no tax declaration was signed).
• From 1 January 2026 (DPP): the threshold increases to CZK 11,999 per month; above this amount, social and health insurance contributions become mandatory.
• DPČ: the limit remains CZK 4,499.

For these agreements, income tax is generally 15%, and tax allowances may be applied if a tax declaration is signed.

5. Changes effective from 1 January 2026 – key highlights

5.1 Increase in the minimum wage

From January 2026, the minimum wage will increase from CZK 20,800 to CZK 22,400 per month for full-time employment (40 hours per week). The minimum hourly wage will be CZK 134.40. This also increases the minimum assessment base for health insurance.

5.2 Threshold for progressive taxation

The threshold for applying the 23% tax rate increases to CZK 1,762,812 of annual income.

5.3 Unified Monthly Employer Report (JMHZ)

From 1 January 2026, a new Unified Monthly Employer Report will be introduced, replacing multiple reports submitted to different authorities (the Social Security Administration, tax office, Labour Office, etc.) with a single electronic report. This significantly simplifies administration and supports digital reporting.

6. Self-employed persons (OSVČ) – flat-rate tax and advances (brief overview)

For self-employed persons, the flat-rate tax and minimum advances will increase in 2026:

• Flat-rate tax: approximately from CZK 8,716 to CZK 9,984 per month
• Social insurance: from approximately CZK 4,759 to CZK 5,720
• Health insurance: from approximately CZK 3,143 to CZK 3,306

This means that from 2026, self-employed persons will pay higher minimum monthly amounts.

7. How an employee’s net salary is calculated

The following deductions are automatically made from the gross salary:

• 11.6% (employee social and health insurance)
• income tax 15% / 23% (after allowances)

The employer pays an additional 33.8% (social and health insurance). This is why the employer’s total cost per employee is significantly higher than the gross salary.

Conclusion

Situation at the end of 2025

• Income tax: 15% / 23% depending on income level.
• Total employee contributions: 11.6%.
• Total employer contributions: 33.8%.
• Maximum annual assessment base: CZK 2,234,736.

What changes from 2026

• The progressive tax threshold increases to CZK 1,762,812.
• The maximum annual assessment base increases to CZK 2,350,416.
• The minimum wage increases.
• The Unified Monthly Employer Report is introduced.
• Advances and flat-rate tax for self-employed persons increase.

In simple terms: what this means for an ordinary person (especially Ukrainians in the Czech Republic)

If we strip away tables, percentages, and official terminology, the reality is simple: from every koruna you earn in the Czech Republic, you realistically keep about two-thirds. The rest goes to taxes and insurance.

For an average employee, this means in practice:

• From a gross salary of CZK 30,000, you will receive approximately CZK 23–24 thousand net (depending on tax allowances).
• With a gross salary of CZK 40,000, the difference between “gross” and “net” becomes much more noticeable – around CZK 12–13 thousand goes away.
• And the more you earn, the more you feel it – especially if you have no children or other tax allowances.

For many Ukrainians, it is a shock that:

• Health insurance must always be paid, even if you hardly ever visit a doctor.
• Social insurance includes pension contributions, even if you are not sure you will stay in the country for life.
• Even if you work “only through an agency” or under a short-term contract, the state will still track your income.

On the other hand, it is fair to mention the other side:

• If you fall ill, you will not be turned away by a doctor without treatment.
• Children have access to schools and kindergartens almost free of charge.
• In case of job loss, there is support and a social system that prevents you from being left completely on your own.

Key advice at the end:

Do not focus only on the gross salary in job advertisements. Always ask: “How much will actually be paid into my account?”

And if you are choosing between self-employment, standard employment, or short-term contracts, consider not only today’s money but also tomorrow’s risks.

The Czech Republic is not a low-tax country, but it is a country with predictable rules. Those who understand them and take them into account can build a stable life here.

And of course, follow our publications – we will keep you regularly informed about current news and legislative changes in the EU, especially in the Czech Republic.