Employer of Record Services for Czechia

Employing in Czechia

Famed for its beautiful countryside, castles, cheap beer and quaint Christmas markets, Czechia is also one of the most metropolitan and diverse countries in the EU.

Czechia’s central European location is a major benefit for international companies looking to expand. Travel to almost anywhere else in Europe is easily accessible by plane, train or car, and the country’s fast and cheap public transport system makes it easy to get around domestically, too. English is also widely spoken, and many global businesses use it as their primary language.

This Slavic nation is also one of the most stable and growing economies in the EU. Thanks to continuously improving standards, there’s a particular focus on the wellbeing of the country’s society, including education, skilled people, work-life balance, safety and security. What’s more, Czechia scores highly for starting a business and has been ranked number one for cross-border trading thanks to its strategic geographic location, developed infrastructure and skilled workforce.

Our Expertise

Managing a global workforce in Czechia

Czechia offers a distinct business environment, but navigating the complexities of local employment laws and regulations is crucial for success. TopSource Worldwide offers expert services in this area, ensuring compliance with Czech labour laws, social security regulations, and tax obligations. With our deep understanding of the local landscape, TopSource can efficiently manage payroll and HR requirements, allowing businesses to focus on their core activities and growth in the Czech market.

Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.

Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.

Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success.

Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

Nutreco

See our customer stories

”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

Sungard

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”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Supervisor

Client based in Ft Worth, Texas, USA

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GLOBAL EXPANSION STRATEGY

Personalised Employer of Record services in Czechia

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in Czechia. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Czechia-based employees.

End-to-end Czechia payroll services

Looking to expand into Czechia? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Czechia expansion initiatives.

Global entity management

Venturing into the Czech market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

Accounting

Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in Czechia

Entering the Czech market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in Czechia.

Start your Czechia expansion

Czechia Insights

Key insights into Czechia's landscape

VAT rates: Czechia has a standard VAT rate of 21%, with reduced rates of 15% and 10% for specific goods and services.

Ease of Doing Business rank: Czechia ranks 40th in the World Bank's Ease of Doing Business Index, indicating a moderately favourable business environment.

Consumer Confidence Index: As of 2022, Czechia's Consumer Confidence Index was 99.5, reflecting stable economic sentiment.

Employee maternity/paternity leave: Maternity leave is up to 28 weeks, and paternity leave is 1 to 2 weeks, supporting work-life balance for new parents.

Employee termination period: Standard notice for termination is typically 2 to 3 months, depending on employment contract terms and duration.

Employee salary pay date: Wages are generally paid monthly, with specific pay dates stipulated in employment contracts and subject to labour laws.

Bank holidays: Czechia observes national holidays, including New Year's Day, Independence Day, and Christmas, with a total of 13 public holidays in a year.

Country guidelines

Bonus

Employers aren’t required by law to pay an employee a 13th month salary.

Social Security System

Both the employer and employee make mandatory social security contributions each month. This provides sickness, pension, unemployment and healthcare benefits to Czech citizens.

Social security contributions must be made by the employer no later than the 20th of the following month; there are immediate penalties for late submissions.

Healthcare

Although the healthcare system has mainly been privatised in the Czech Republic, it’s a universal healthcare system. Everyone is charged compulsory health insurance on their wages.

Expatriates are required to pay health insurance and are then entitled to free medical care, although they may still need to pay a small stipend on top of the health insurance for any treatment received.

Employer costs

Employers are obliged to make monthly social security contributions and healthcare contributions.

Contribution

Rate of gross monthly salary (%)

Pension

21.50%

Sickness

2.10%

Unemployment

1.20%

Health insurance

9.00%

Total

33.80%

The annual threshold for social security contributions is 48 times the average monthly wage per year. The cap doesn’t apply to healthcare insurance.

An overview of the main statutory benefits

Maternity & Paternity

Maternity leave: Women can take up to eight weeks before the delivery date but must not commence their maternity leave any later than six weeks before delivery. Women must take at least 14 weeks of maternity leave.

While on maternity leave, women are usually paid 70% of their usual wages but this can change slightly depending on how much they’ve contributed to their social security.

Paternity leave: Men are entitled to seven days of paternity leave, paid at a rate of 70% of their usual salary.

Pension

Employees pay 6.5% of their gross salary each month towards the public pension system. The employer is required to pay 21.5% of the employee’s gross salary towards pension contributions.

In order to receive the state pension, an employee must have been insured for a minimum period of 35 years (if employed after 2018).

There are voluntary private pension schemes if employees wish to make additional contributions.

Sickness

All employees are entitled to up to 14 days of sick leave at 60% of their usual pay, as long as they can provide evidence of illness.

Other

Absence from work is permitted if the employee in question is caring for an ill family member or a child under 10 years old. Furthermore, if an employee requests for a change of hours because they provide constituent care to an ill family member or a child under the age of 15, then this must be permitted as long as it doesn’t interfere seriously with the business’ operations.

Contractual provisions

Contract of employment

Czech Republic law has recognised an electronic signature as legally binding since the year 2000.

Working hours

A full-time job is considered eight hours a day/40 hours a week.

Probationary period

A probationary period in the Czech Republic cannot be longer than three months for regular employees and no longer than six months for chief officers. The probationary period cannot be longer than 50% of the employment contract.

Rest breaks

Employees are entitled to a 30-minute lunch break and a rest break when they have worked for six consecutive hours.
A daily rest of at least 11 hours between one shift to the next is required by law.
A weekly rest of at least 35 consecutive hours is required by law.

Overtime

Employees aren’t allowed to work more than eight overtime hours per week, and they cannot work eight overtime hours per week for longer than 26 weeks in a row. The maximum overtime hours permitted to be worked per year are 150.

Overtime pay is 125% of the usual wage rate of the employee. Employers may give the employee extra time off instead of money in exchange for the overtime work.

If the overtime falls on a holiday, then the employee is due time off as well as wages. When overtime is required to be worked on the weekend, the employee should be paid at a rate of 110% of their usual wages.

Additional leave

Personal leave

The government set out a list of events in which an employee can take time off for personal reasons. These situations include the birth of a child, funerals, medical examinations and performance of work in public office.

Termination

If there’s mutual consent between the employee and the employer, a contract can be terminated at any time for any reason. If either the employer or the employee is giving notice of termination of the contract, there must be a written notice and it must be delivered in writing.

An employee may give notice of resignation without a reason whereas an employer must provide one of the following reasons:

Gross breach of duty or unlawful behaviour
The employer’s business shuts down, relocates or another organisational reason
The employee is unable to fulfil their duties due to medical reasons
If the employee has repeatedly breached their contract in any way
The employee no longer has the capacity or fills the requirements for the job they’re meant to be carrying out

Notice period

The standard notice period is two months. This notice period begins the first day of the month after notice has been served.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Discover our payroll benefits

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in Czechia

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

Understand the different types of EOR taxes
Stay up-to-date on the latest changes to EOR tax regulations
Avoid penalties for non-compliance

Speak to our team

Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013.

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Reviewed by:

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about Czech employment solutions

What is an Employer of Record in Czechia?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in Czechia. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in Czechia?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in Czechia. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in Czechia?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in Czechia. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.