Hiring In Czech Republic

What Should I Know About Hiring in Czechia?

With its central location in the heart of Europe and ease of trading across markets, Czechia is an attractive hub for international business growth and expansion. Before you begin hiring your new employees from Czechia, there are a few things you should become familiar with, like the country’s labour regulations and employment laws.

Czech employment law is based on different national and international laws, as well as historical practices and modern legislation. A written employment contract must be put in place before the beginning of each employment relationship, which can be either definite or indefinite, with definite contracts being limited to the number of renewals. 

With more and more organizations hiring remote workers from Czechia, employers must make sure to provide employment contracts which are compliant with Czech legislation.

Why Is Czechia a Good Choice for Finding Remote Employees?

Czechia is an attractive location for many international businesses and foreign employers. Due to its central location in Europe, good infrastructure, educated professionals, high standard of living and a rapidly developing entrepreneurial market, Czechia is currently one of the top places for international expansion.

How Can Native Teams Help You Hire in Czechia

To recruit and employ workers from Czechia, organizations must use an employer of record provider to manage payroll, compliance, taxes and benefits for their new Czech employees. Native Teams has a legal entity in Czechia, so we can help you expand your team in compliance with all local laws.

---

Hire your first Czech employee with Native Teams.

---

Legal Requirements for Hiring in Czechia

Contributions & Taxes

The employer must pay 24.8% for social security and 9% for mandatory health insurance, while the contribution rates for employees are 6.5% for social security and 4.5% for health insurance.

Employer Tax

The employer is obliged to pay mandatory contributions to social security on a monthly basis. This system finances pension, sick leave and unemployment benefits. Employees contribute 6.5% of their gross salary including benefits and allowances, which is capped at CZK 1,701,168 annually.

Corporate Tax

The CIT rate of 19% applies to all business profits, which includes capital gains from the sale of shares (if not exempt under the participation exemption regime).

Employee Tax

An individual income tax for Czech employees amounts to 15% of gross salary up to 141,764 CZK and 23% for the gross salary above that amount.

Income Tax

Czechia returned to progressive taxation in 2021 and introduced a marginal rate of 23%; Gross income up to the social security payment cap (the threshold for 2021: CZK 1,701,168 and for 2022: CZK 1,867,728) will be subject to a 15% rate.

Payroll

What is the payroll cycle?

The salaries in Czechia are normally paid out once per month and the payments must be made on the same day of each month.

Is there a 13th salary in Czech Republic?

Even though a 13th salary is not mandatory in Czechia, many employers pay it as a bonus, which is normally performance-based.

Labor Rules

What are the main Labour Rules?

Probation period rules

According to the Labour Code, the probationary period in Czechia cannot exceed 3 months, however, a shorter period may be agreed upon by both parties.

Notice Period 

A notice period of at least 2 months must be given from both the employer and the employee and can be extended only if both parties agree with the extension.

Severance Period

If the termination of employment is done in the first year of employment, then the severance pay must amount to one month’s salary, two months’ salary for the second year and three months’ salary if the employment lasted for more than two years.

Working Hours

The standard working week in Czechia is Monday to Friday between 8 am and 6 pm. Work between 10 pm and 6 am is considered night work, and the maximum working hours cannot exceed 40 hours per week.

Leave and Benefits

Leave and Benefits rules

Public holidays

Czechia celebrates 12 public holidays for which employees are given the day off:

If public holidays fall on the weekend, they are not transferred over to the first weekday.

Annual Leave

Czech employees must get at least 4 weeks off per year. Leave is counted in hours, therefore the employees can also apply for a half day off.

Sick leave

Czech employees have the right to sick leave and the costs are split between the employer and the Social Security system.

From the 1st day to the 14th day of sick leave, the employer pays 60% of the salary, and from the 15th day to the 380th day of sick leave, the Social Security Administration covers all the costs associated with the illness.

Maternity leave & Paternity leave

Pregnant employees in Czechia are entitled to 28 weeks of maternity leave or 37 weeks for multiple births and they can begin the leave 6-8 weeks before the due date. The maternity leave benefits are paid by the Social Security Administration and amount to 70% of her assessed salary.

Parental Leave: One of the parents is entitled to paid parental leave, which consists of a maximum of 300.000 CZK of benefit and must be taken during the first four years of the child’s life. They are also entitled to up to 9 days of care leave for caring for a child under the age of 10 or for providing care for a sick family member.

Other leave (marriage, bereavement, exam leave)

A Czech employee may also get additional leave, which can depend on the collective agreement/employment contract terms and is approved between the employer and employee.

Bereavement leave: In the event of the death of an immediate family member, an employee is entitled to up to 3 days of leave.

Jury Duty: Czechia requires all organizations to provide their employees who are employed full-time with unpaid leave for their duty as jurors or as a witness in a case. Employees must present their employers with a copy of the jury summons as evidence of the requirement.

Military Leave: Military service is not compulsory in Czechia, however, people can volunteer for military training, which is paid for by the military.

Insurance

Health Security & Private Insurance

Payroll taxes and the general budget are used to fund Czechia’s mandatory universal healthcare system. 

* Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices*

Visa

Relocation and Work Permits

Native Teams will act as your Employer of Record and apply for your work permit in the country. You will be able to upload all the needed documents in our app. Native Teams will support you by giving you regular updates on the progress until you get your work and residence permit.

How long is the Visa / Work Permit process?

Usually, it takes 2 to 4 weeks to get a work permit, depending on the authorities and provided documents.

Which documents do you need?

To apply for visa/work permit in Czech Republic, please upload the documents from our onboarding list (relocation to log in/pricing).