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Employing in Czech Republic
Famed for its beautiful countryside, castles, cheap beer and quaint Christmas markets, the Czech Republic is also one of the most metropolitan and diverse countries in the EU. Many famous international companies — including Deloitte Touche, Exxon Mobil and Zara — call the country home, but the nation also has plenty of its own homegrown firms, such as Skoda and Budweiser.
The Czech Republic’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, the Czech Republic 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.
Country Guidelines
An overview of employing in Puerto Rico
Salary currency
Czech koruna (Kč)
Salary pay date
Employees are usually paid every month. The employer sets the regular pay date, which can be any time before the 20th of the following month. TopSource Worldwide employees are paid by the 10th of the following month.
Salary
The minimum wage is CZK 15,200 per month for 40 hours a week standard and CZK 90.50 per hour.
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 (CZK 1,701,168: 2021). The cap doesn’t apply to healthcare insurance.
An overview of the main statutory benefits
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.
Maternity & paternity
Maternity leave
Women are entitled to take up to 28 weeks for a single birth and 37 weeks for multiple births.
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.
Other
Contractual provisions
Contract of employment
Czech Republic law has recognised an electronic signature as legally binding since the year 2000.
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.
Working hours
A full-time job is considered eight hours a day/40 hours a week.
Rest breaks
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:
Notice period
The standard notice period is two months. This notice period begins the first day of the month after notice has been served.
Holiday Entitlement
Employees in full-time employment are entitled to four weeks of paid holiday per year. Annual leave may be taken once the employee has worked for 60 days. All employees are entitled to at least two consecutive weeks of holiday.
| Public holidays 2021 | |
|---|---|
| New Year’s Day | Friday 1 January |
| Good Friday | Friday 2 April |
| Easter Monday | Monday 5 April |
| >May Day | Saturday 1 May |
| Liberation Day | Saturday 8 May |
| St Cyril and St Methodius Day | Monday 5 July |
| Jan Hus Day | Tuesday 6 July |
| Statehood Day | Tuesday 28 September |
| Independence Day | Thursday 28 October |
| Freedom and Democracy Day | Wednesday 17 November |
| Christmas Eve | Friday 24 December |
| Christmas Day | Saturday 25 December |
| Second Day of Christmas | Sunday 26 December |
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