Taxes in the Czech Republic

Employers must make monthly contributions to the social security insurance of each employee at a rate of 24.8% of their gross salary, including benefits and allowances. The social security system funds pension (21.5%), unemployment benefits (1.2%), and sickness (2.1%). The maximum annual cap for the assessment base for calculation of contributions into the social security system is 48 multiplied by the average monthly wage per year.

Employers must also make monthly contributions to the health insurance for each employee at a rate of 9% of the employee’s gross salary, including benefits and allowances, with no cap existing. The minimum monthly base for employees is CZK 22,500 in 2026. This applies typically to employees with low or no renumeration, usually on a sabbatical.

Individuals are taxed at a progressive tax rate based on all their types of income combined, including employment and passive incomes such as capital gains and rental income. Employers must withhold each employee’s employment income tax monthly and remit it to the tax authorities. Couples cannot file their income tax jointly.

During payroll, employers withhold and remit the employee’s mandatory contributions to the social security insurance monthly. The social security system finances old-age pensions, sickness, and employment policy benefits. Employees contribute 7.1% of their assessment base. Contributions are subject to an annual maximum assessment base of CZK 2,350,416 for 2026.

Employees contribute 7.1% of their assessment base to social security. This includes 6.5% for pension insurance and 0.6% for sickness insurance.

Employers are also responsible for withholding and remitting the employee’s mandatory contributions to the health insurance monthly. Employees contribute at a rate of 4.5% of their gross salary, including benefits and allowances. No cap. However, the minimum monthly base of CZK 22,400 in 2026 applies.

Benefits in kind are generally treated as taxable employment income unless a specific exemption applies. Non-cash benefits are typically valued at their open-market value.

• Company cars: If a company car is available for private use, a taxable benefit arises equal to 1% of the acquisition cost per month (0.5% for low-emission vehicles and 0.25% for zero-emission vehicles).
• Travel reimbursements: Reimbursements exceeding statutory limits are taxable. For 2026, domestic per diem allowances within the legal ranges are tax-exempt:
  • CZK 155–185 for 5–12 hours
  • CZK 236–284 for 12–18 hours
  • CZK 370–442 for over 18 hours
    Excess amounts are taxable.
• Leisure benefits: Certain non-monetary educational, cultural, sporting, and health benefits may be tax-exempt up to an annual limit linked to half of the average wage.
• Temporary accommodation: Employer-provided temporary accommodation may be tax-exempt up to CZK 3,500 per month if statutory conditions are met. Cash allowances are taxable.
• Meal benefits: Meal vouchers or cash meal allowances are tax-exempt within statutory daily limits; any excess is taxable.

Unlike most countries, the Czech Republic has adopted a system of tax credits rather than tax-free allowances, as follows :

• General personal tax credit: CZK CZK 30,840
• Dependent spouse tax credit: CZK 24,840 if the spouse lives with the taxpayer and does not have income in excess of CZK 68,000.
• Child tax credit: CZK 15,204 for the first, CZK 22,320 for the second, and CZK 27,840 for the third and each following dependent child (under certain conditions). If the total tax is lower than the respective child credit, the taxpayer will receive a special tax bonus equal to the difference between the child allowances and one’s tax liability. As of 2021, there is no longer a maximum amount of tax bonus.
• Disability tax credit: CZK 2,520, CZK 5,040, or CZK 16,140 (determined by disability severity).

These tax credits lower the tax liability. Tax deductions modify the tax base only (reducing the liability by 15%–23% of the deduction only).

No deductions are provided for expenses connected to taxable income from employment. However, reimbursements for travel expenses are exempt from tax as long as they don’t exceed certain limits.

Donations made to qualifying entities (e.g. in the fields of science, education, culture, healthcare, or social support) are deductible if their total annual amount exceeds CZK 1,000 or 2% of the tax base. The total deduction may not exceed 15% of the tax base. Blood donation is also treated as a charitable donation and is valued at CZK 3,000 per collection for tax deduction purposes.

A deduction for the interest paid on mortgages is applicable under several strict conditions and is up to CZK 150,000 per year for housing needs “procured” after 1 January 2021.

A deduction for private contributions made on life insurance is applicable under certain conditions and is up to CZK 48,000 per year.

A deduction for private contributions made to a private pension insurance fund is applicable under certain conditions and is up to CZK 48,000 per year.