Hiring guide in Czechia

What should I know about hiring in Czechia?

Hiring employees in Czechia can be a rewarding experience, but you should know some essential things before you begin the process. The Czechia is a member of the European Union, meaning it has implemented EU labour laws, including regulations on working hours, minimum wage, and paid leave. 

In addition, Employment contracts must be in writing and include information about the position, salary, working hours, and duration of the contract. It is also essential to know that there are different types of employment contracts, such as fixed-term or indefinite contracts, and that the duration and termination of each type of contract are regulated by law. 

Finally, it is crucial to consider the benefits and social security obligations when hiring in the Czechia. Employers are required to provide benefits such as sick leave, paid vacation, and parental leave.

Why is Czechia a good choice for finding remote employees?

The Czechia has an excellent remote workforce because of its highly educated and skilled workforce, with many universities and technical schools producing graduates in different fields. 

Secondly, Czechia is well-connected to the rest of Europe, with high-speed internet and modern telecommunications infrastructure. This makes it easy for remote employees to work from anywhere in the country and stay connected with their colleagues and clients across the globe.

Finally, Czechia’s strong work culture emphasizes professionalism, reliability, and a strong work ethic. This means that remote employees from the Czechia are likely to be highly motivated and committed to delivering high-quality work.

How can Native Teams help you hire in Czechia?

Native Teams can provide assistance with recruitment, compensation and benefits administration, and regulatory compliance in accordance with Czech law. Using our employer of record services, we can make your benefits and pay structure more competitive and appealing to new hires.

Hire your first Czech employee with Native Teams.

Legal requirements for hiring in Czechia

Minimum wage

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 total cost of employment is 33.80%. 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

• Up to 1,867,728 CZK: 15%;
• 1,867,728 CZK or above: 13%.

To calculate the salary and taxes in the Czechia please click here.

Payroll cycle

Salaries are typically paid by the 15th of the following month.

Is there a 13th salary in the Czechia?

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

Labor rules

Probation period rules

The probationary period in Czechia is outlined in the employment contract and is based on the type of role. Generally, regular salaried employees’ probationary periods last 2 to 3 consecutive months.

Notice period 

The notice period in Czechia must be at least 2 months and must begin on the first day of the month after the receipt of the notice.

Severance period

Severance pay in Czechia is based on the employee’s length of service and is calculated as follows:

• 1 month’s gross salary: 1 year of service;
• 2 months’ gross salary: 2 years of service;
• 3 months’ gross salary: More than 3 years of service.

Working hours

The standard workweek runs from 9 am to 6 pm, Monday through Friday, with a 1-hour lunch break. The average workweek consists of 40 hours per week, five days.

Leave and benefits

Public holidays

There are 13 national holidays in Czechia:

1. New Year’s Day
2. Good Friday
3. Easter Monday
4. Labour Day
5. Liberation Day
6. Day of Slavonic Apostles Cyril and Methodius
7. Anniversary of the Martyrdom of Jan Hus
8. St. Wenceslas Day
9. Independence Day Czechoslovakia 1918
10. Day of the Struggle for Freedom and Democracy
11. Christmas Eve
12. 1st Christmas Day
13. 2nd Christmas Day

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 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 a visa/work permit in the Czechia, upload the documents from our onboarding list (relocation to log in/pricing).

Why use Native Teams for hiring in Czechia?

Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:

• No paperwork: We will handle all the necessary paperwork for you.
• Save on taxes: We help you handle your taxes.
• No company set up: You can expand your business using our company entitles.
• Online onboarding: We’re here to ensure your onboarding process is trouble-free.
• No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
• Increase your profit: We assist you in growing your business and maximizing your profits.
• Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
• Local support: We can assist you in understanding and complying with the relevant local laws.