Disclaimer: This guide is general information and not legal/tax advice. Always verify current thresholds, rates, and deadlines.

1) Overtime pay in Czech payroll — the basics

Czech overtime pay rules 2025 require either a premium of at least 25 % of average earnings or equivalent time off for hours worked beyond the normal weekly schedule (usually 40 hours).

Overtime applies to work performed beyond the employee’s scheduled working hours and, overall, beyond the standard weekly limit. In shift or uneven schedules, it is assessed across the entire balancing period.

• Caps: 8 hours per week and 150 hours per year (further hours require employee consent).
• Payroll options: extra pay (default) or compensatory time off (by agreement).

Example: Average hourly earnings = CZK 370; 2 hours overtime → 370 × 2 × 1.25 = CZK 925.

2) Night work and weekend shifts

Night work (22:00–6:00) earns a premium of 10 % of average earnings. Saturday and Sunday work carry a statutory premium of 10 % as a minimum under the Labour Code; companies may grant higher rates in internal policies or collective agreements.

Example: Night shift on Saturday → 10 % (night) + 10 % (weekend) = 20 % total premium on hours worked.

3) Public holidays — when “double pay” applies

• Monthly-salaried employees: public holidays are already covered by salary (no separate average unless policy/CA adds it).
• Hourly-paid employees: compensation only when a public holiday falls on a scheduled working day and work is prevented. In reality, hourly rosters almost always avoid holidays, so there is normally no compensation unless the person was rostered to work.
• If the employee works on a holiday: regular pay + a 100 % premium, or a compensatory day off instead.

Example: 8 hours on a public holiday at CZK 370/hour → 370 × 8 × 2.00 = CZK 5 920.

4) Paid Vacation (Annual Leave)

Vacation pay is based on the employee’s average earnings from the previous quarter. Once paid, overtime and premiums flow into the next quarter’s average.

DPP & DPČ (simple version): no automatic statutory vacation. Entitlement exists only if your contract/internal policy grants it, or where specific Labour Code conditions are met (e.g., a set weekly schedule). In short: agree it in writing if you want it clear.

5) Monthly compliance checklist

Disclaimer: General guidance only — verify collective agreements and internal rules before payroll processing.

Czech sickness benefits 2025 are among the most common payroll questions. Employers must distinguish between salary compensation and state sickness benefits correctly — errors can affect ČSSZ reporting and employee net pay. For employees, understanding how each stage is calculated explains why sickness income differs from regular take-home pay.

1) Two phases of Czech sick pay

Days 1–14: the employer pays salary compensation for the scheduled working hours lost to sickness. Day 15 onward: ČSSZ pays the sickness benefit (nemocenské) for every calendar day of incapacity. Both parts are based on the employee’s average earnings but follow different rules.

2) Employer salary compensation (days 1–14)

The compensation equals 60% of the reduced average hourly earnings from the previous quarter. Reduction bands valid for 2025 are applied before the percentage is calculated:

Compensation covers only scheduled working days — weekends are paid only if the employee normally works them.

3) Sickness benefit from ČSSZ (from day 15)

The benefit is based on the daily assessment base (DVZ) — usually average gross income over the past 12 months divided by 30. Reduction bands apply as follows:

The resulting reduced base is multiplied by 60% (days 15–30), 66% (days 31–60), or 72% (from day 61 onward).

4) Worked example (2025) — detailed

Inputs (clearly stated):

• Monthly gross pay: 40,000 CZK.
• Average hourly earnings (prior quarter): 250 CZK (typical 160 working hours/month).
• Average daily gross for DVZ: 1,333 CZK (40,000 ÷ 30 for illustration).
• Absence length: 30 calendar days.
• Days 1–14 include 80 scheduled working hours (Mon–Fri schedule in this period).

Step A — Employer salary compensation (days 1–14):

1. Hourly reduction: 250 CZK falls into the first band (≤ 271.60) ⇒ reduced hourly = 250 × 90% = 225 CZK.
2. Compensation rate: 60% of reduced hourly ⇒ 225 × 60% = 135 CZK/hour.
3. Total for days 1–14: 135 × 80 hours = 10,800 CZK.

Step B — ČSSZ sickness benefit (from day 15):

1. DVZ (daily assessment base): 1,333 CZK.
2. Daily reduction: DVZ is below the first 2025 threshold (1,552) ⇒ reduced DVZ = 1,333 × 90% = 1,200 CZK (rounded).
3. Benefit rate: days 15–30 are paid at 60% ⇒ 1,200 × 60% = 720 CZK/day.
4. Number of benefit days: 16 calendar days (days 15–30).
5. Total benefit: 720 × 16 = 11,520 CZK.

Worked-example total = employer compensation (10,800) + ČSSZ benefit (11,520) = 22,320 CZK. Exact results depend on the employee’s real prior-quarter average and day schedule.

5) Employer duties and compliance tips

• Keep eNeschopenka and attendance records accurate.
• Pay salary compensation together with regular payroll.
• Report sickness start and end dates electronically to ČSSZ.
• Store documentation for at least 10 years.
• Apply correct social rates (employee 7.1 %, including 0.6 % sickness insurance).

6) Common payroll mistakes

• Mixing working and calendar days: employer compensation covers working days; ČSSZ benefit is calendar-based.
• Using outdated reduction bands: always apply the 2025 thresholds listed above.
• Not updating averages quarterly: refresh the reference period at each new quarter.
• Incorrect eNeschopenka coding: wrong absence codes delay ČSSZ payments.

Disclaimer: General guidance only — verify official ČSSZ/MPSV parameters before processing payroll.

1) Social Security Contributions

Czech Social Security and Health Insurance Contributions are split between employee and employer. For social security in 2025 the employee rate is 7.1% and the employer rate is 24.8% (pension, sickness, unemployment). Contributions apply only up to the annual assessment base cap; after crossing it, social security stops for the rest of the year.

The annual cap for social security is CZK 2,234,736. Monitoring cap usage per employee is an essential monthly control, particularly for highly-paid roles or for employees receiving large bonuses that may accelerate the cap earlier in the year.

2) Health Insurance Contributions

Public health insurance is calculated on the monthly assessment base without an annual ceiling. The employee pays 4.5%, the employer 9%. Unlike social security, health insurance has no cap. However, a minimum assessment base applies—equal to the statutory minimum wage (CZK 20,800 in 2025). If the base is lower (e.g., part-time or unpaid absence), a top-up to 13.5% of the difference is required.

3) Combined Overview

4) Example Calculation (CZK 50,000 gross/month)

Employer’s total cost: CZK 66,900 (gross + employer contributions). Example excludes income tax and credits.

5) Practical Notes & Compliance

• Monthly payments: Social security to ČSSZ; health insurance to the employee’s insurer.
• Cap tracking: Verify when employees reach the SS cap and stop calculating SS thereafter.
• Minimum base checks: For part-time or absence months ensure health insurance meets the minimum base.
• Contracts (DPP/DPČ): Contributions arise only above statutory thresholds; flag threshold crossings automatically in your HRIS.

6) Why contributions matter for employers and employees

Social security and health insurance are not just payroll mechanics. For employers, correct calculation ensures compliance and avoids penalties that can reach significant amounts. Late or incorrect payments also complicate statutory reporting and can trigger audits. For employees, the contributions build future pension rights, sick-leave coverage, and continuous public health insurance. Clear payslip communication helps employees understand what is deducted and why, reducing payroll disputes and support tickets.

Global HR and Finance teams should map contribution logic into their systems from day one. This avoids surprises when employees move across countries or when expats compare Czech payroll with their home system. Documenting Czech contribution rules in internal manuals and adding simple month-end controls (cap reached? minimum base met?) prevents misunderstandings later and keeps payroll audit-ready.

FAQs

Disclaimer: This article provides general guidance. Always verify current rates and thresholds before closing payroll.

1) How wage garnishment works

Wage garnishment (exekuce ze mzdy) obliges employers to deduct part of the employee’s salary and forward it to a creditor via the appointed executor. The key principle: the employee must keep a legally defined minimum for basic living needs.

2) Priority and non-priority debts

Debts are divided by law into:

• Priority debts — child support, alimony, damages for injury, criminal fines. These are paid from the second third and, if necessary, from the first third and fully seizable part.
• Non-priority debts — consumer loans, credit cards, utilities, overdrafts. These are covered only from the first third (and any remaining fully seizable amount).

3) Step-by-step calculation (2025 example)

Scenario: employee with no dependents, net monthly salary 32,000 CZK, non-priority debt.

• Protected minimum: 13,026.67 CZK
• Remainder of net: 32,000 − 13,026.67 = 18,973.33 CZK
• Rounded remainder: 18,972 CZK (divisible by 3)
• One third (non-priority debt): 6,324 CZK
• Fully seizable part of remainder above 29,310 CZK: none (remainder ≤ 29,310)

Total seizable amount: 6,324 CZK • Employee keeps: 25,676 CZK

If the employee had one dependent, the protected part would increase by 3,256.67 CZK, reducing the seizable portion proportionally.

4) Employer’s legal duties

• Start deductions only after receiving an official order from the court or executor.
• Apply the correct protected amount every month, based on the number of recognized dependents (spouse counts only if legally recognized as dependent, e.g., no income, disability, care duties).
• Forward the deducted sum to the executor’s account within the deadline and keep confirmations.
• If the employee leaves, inform the executor immediately and provide forwarding details if known.
• Request executor cooperation for unclear cases; if not provided, the employer can file a complaint.

5) Multiple garnishments and 4+ executions

If several executions run at once, follow their order of delivery; same-day orders share proportionally. Where 4+ executions exist, up to two thirds of the remainder may be deducted (statutory exceptions apply, e.g., certain pensions or disability benefits).

6) Insolvency vs standard garnishment

In insolvency (oddlužení), deductions are sent to the insolvency trustee, not directly to creditors. The protected amount is similar, but distribution follows the court-approved plan. Switch routing immediately upon receiving the insolvency notice.

7) FAQ — common payroll questions

Does a spouse count automatically as dependent?

No — only if recognized as dependent (e.g., no income, disability, or caregiving duties).

Are bonuses or severance included in garnishment?

Yes, all taxable income components (unless explicitly exempt) are subject to garnishment rules.

What if the net salary is lower than the protected amount?

Then no garnishment is applied for that month — the debt remains outstanding.

Disclaimer: This article provides general information only. Always verify official limits and follow the exact wording of the executor’s order. Data valid for 2025.

DPC vs DPP Czech Republic remains one of the most frequent decisions for HR, finance, and expats. Both are flexible agreements, yet they differ in how you plan working time, when insurance applies, how tax is calculated each month, and what documents you must keep for audits. Use this guide to compare rules side-by-side and pick the right setup for each role.

Disclaimer: Informational only. Verify current thresholds and rules for the relevant year/month.