First Hire in the Czech Republic: Readiness Guide

1) Register as an Employer

Before Day-1, register your company with the Czech Social Security Administration (ČSSZ) and with the employee’s selected health insurance company. If you are a foreign employer without a Czech entity, ensure your chosen engagement model is locally compliant.

• Notify ČSSZ within 8 calendar days of becoming an employer.
• Register for income tax withholding where applicable.
• Keep employer IDs and confirmation letters in your payroll file.

2) Draft a Compliant Employment Contract

Contracts must be in writing and include at least the job title, place of work, start date, salary, and working hours. For flexibility, consider a probationary period (up to 3 months, or up to 6 for managers).

• Define working time (full-time/part-time), overtime approach, and benefits.
• Attach internal policies by reference (remote work, IT security, etc.).
• File a signed copy in the employee dossier.

3) Choose the Right Employment Type (HPP / DPČ / DPP)

Pick the arrangement that matches your workload, cost, and risk profile:

• HPP (standard employment): full social & health insurance; robust protections.
• DPČ (Agreement on Work Activity): part-time; insurance generally applies above 4,500 CZK/month.
• DPP (Agreement on Work Performance): flexible; insurance generally applies above 10,500 CZK/month.

Thresholds shown reflect common limits used in 2025 planning. Always confirm current figures before hiring.

4) Align Payroll Calculations & Reporting (with your provider)

Coordinate calculations, reviews, and monthly filings with your chosen payroll provider or in-house team. Typical components include:

• Income tax prepayments: 15% / 23% rate bands (assess based on the employee’s tax base and annual threshold).
• Social insurance: employer ~24.8%, employee ~7.1%.
• Health insurance: employer 9%, employee 4.5%.
• Reporting: monthly statements and payments, typically due in the month following payroll.

5) Complete Onboarding Duties

• H&S training and documentation.
• Internal policies communicated and acknowledged.
• Start notice to ČSSZ (employee registration) on time.
• Collect tax declarations and dependent/benefit confirmations if applicable.

6) Be Ready for Audits & Inspections

Authorities verify employer registrations, timely filings, and correct contributions. Keep a complete employee file (contract, addenda, policy acknowledgements) and a payroll file (calculations, reports, payments) for each month.