In the Czech Republic, mandatory benefits are those covered under the Social Security Insurance, funded by contributions made during employment by employers and employees.
Employers and employees must contribute into the compulsory pension benefit administered by the Czech Administration of Social Security (CSSZ). Employers contribute 21.5% of the employee’s gross remuneration (part of the 25% employers contribute into Social Security), while employees contribute 6.5%.
There are two parts to the monthly retirement pension. The first is a monthly payment of 10% of the average wage (around CZK 1,700). The second element is earnings related, which is calculated on 1.5% of the personal assessment base per year of coverage. People who are not permanent residents of the Czech Republic are still entitled to a pension, which corresponds to the time they spent in employment in the country.
Individuals seeking a job are entitled to unemployment benefits from the social security authorities, funded by employer and employee contributions. Regardless of the reason for the employment termination, individuals younger than 50 years of age are entitled to up to five months of unemployment benefits.The unemployment benefits pay schedule is as follows:
The benefits are extended to individuals older than 50 years of age. Those aged 50 to 55 are entitled to 8 months of unemployment benefits, and those over 55 are entitled to 11 months. The benefits amount is set at 45% for the entire period.
It’s very common for companies to offer one week (5 days) of additional time off above the statutory four weeks (20 days); some even offer company-wide days off.
While only large companies provide on-site canteens for employees, most employers in the Czech Republic offer meal vouchers instead. Many employers cover meal vouchers, often up to a 100%. However, only 55% is tax deductible (capped at CZK 107.10 per shift). No taxation for the employee. Some companies cover 55% of the meal voucher, while the remaining 45% is covered by employees.
As of 2023, employers may provide a cash catering allowance, which is tax deductible up to a limit of CZK 107.10 per work shift. This benefit is being introduced as alternative forms of tax-advantaged catering support.
Employers in larger cities often cover an annual public transportation pass for employees who commute to work.
Many tech employers in the Czech Republic give employees time and location flexibility, either fully async or with flexibility respecting core hours. Some companies are fully remote, while others implement a hybrid model where employees go to the office once to thrice a week. Many employers who allow employees to work from home often provide employees with the home office workstation.
Most employers in the Czech Republic provide employees with an annual stipend to be spent on cultural and sports activities. The stipend is usually CZK 2,400 per year and kicks in after the probationary period is completed. Some employers provide gym memberships to employees, especially in companies where the average employee age is low.
Many tech companies in the Czech Republic give employees a monthly stipend of CZK 2,400 to be spent on their benefits of choice. Some companies have various benefits that employees can choose from.
Most tech companies assign an annual budget to provide a certain level of training and education for employees to contribute to their personal development and growth. Some employers fully cover the cost of training and certifications in the tech sector, while others contribute to further their employees’ education.
Multinational companies often provide expats with Czech language classes, and employees in need of a foreign language at work with language classes.
Annual bonuses are becoming more common in tech companies, usually dependent on how the company performs for the year. Some bonuses go up to an additional month’s wage, also known as the 13th salary.
Some tech and large companies provide employees with a supplementary retirement pension. Contribution amounts are at the discretion of the employer, but it’s common to contribute 1.5 times the employee’s contribution, capped at 3% of the employee’s salary. Employer contributions are capped at CZK 50,000 annually, fully tax deductible for the employer and aren’t considered a benefit-in-kind (BIK) for the employee.
Large multinationals and some tech companies provide group insurance coverage in case of death from any cause, Accidental death and dismemberment (AD&D), and total permanent disability. Typically, the amount of insurance is once or twice the employee’s annual salary. The premium for the benefit is paid by the employer and is considered taxable income for employees.
The Czech public health care system offers a comprehensive coverage, which makes supplementary health insurance uncommon.