Hire in Czech Republic

Czech Republic PEO &

Employer of Record

Hire & manage teams remotely in Czech Republic without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.

Business Language

Czech, English

Salary Currency

Czech koruna (CZK)

Capital city

Prague

Time zone

UTC +2

EOR in Czech Republic

Hire Employees in Czech Republic

NNRoad provides professional employment organization (PEO) & employer of record (EOR) services in Czech Republic to ensure that your business complies with local labor laws and regulations. We process monthly payroll and act as the Employer of Record, taking on all local employer liabilities.

Fast Hiring

Start working with your remote employees in a week.

Foreigner Visas

NNRoad assists with overseas foreign hires visa needs.

Platform

Access your payroll reports on our portal.

Employer of Record in Czech Republic

Employer of Record (EOR) services are for companies who do not have a legal entity in Czech Republic, but who want to hire localy. Employment and full liability are outsourced to NNRoad.

1. Candidate Selection

Select the candidates you want to hire in Czech Republic.

2. Employee Onboarding

We sign a local labor contract with your employees based in Czech Republic.

3. Compliance & Payroll

We manage monthly payroll, mandatory benefits & all HR compliance in Czech Republic.

EOR service includes:

Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).

All mandatory employer (and employee) contributions filed and paid for your EOR employees.

Payroll recording, reporting and administration.

Distribution of salaries to employees through direct deposit into their bank accounts.

Calculation, reporting, filing and processing of EOR employee’s individual income tax due.

Collecting and processing your employee’s invoices for business related expenses.

Guiding and organizing your expat employee’s work visa application too guarantee their successful onboarding.

Standalone Payroll & PEO in Czech Republic

Professional Employment Organization (PEO) services are for companies who have a legal entity in Czech Republic, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.

Employee Income Taxes:

Individual income tax rates in Czech Republic are based on progressive tax brackets.

For tax residents, income up to approximately CZK 1.5 million is taxed at a rate of 15%, while income exceeding this threshold is subject to a rate of 23%. Non-residents are only taxed on Czech-source income. Notably, there is also a separate tax base for selected types of foreign investment income, which is taxed at a flat rate of 15%​. Source

Tax Brackets:

Sample Calculation

15%: 0 – 1,500,000 CZK
23%: >1,500,000 CZK
Tax on a 2,000,000 CZK annual income:

15% of 1,500,000 CZK = 225,000 CZK
23% of (2,000,000 – 1,500,000) CZK = 115,000 CZK

Total Tax = 225,000 CZK + 115,000 CZK = 340,000 CZK

Social Security

In the Czech Republic, all workers are required to contribute to the social security system, which encompasses health insurance, pensions, employment insurance, sickness pay, as well as various child-related benefits and social services. This comprehensive system ensures that workers have access to healthcare, receive pensions upon retirement, and are financially supported during periods of unemployment or illness. Contributions to the social security system are made by both employers and employees, reflecting a shared responsibility to maintain the welfare of the workforce.

Insurance PolicyEmployeeEmployer
Pension Insurance fund6.5%21.5%
Sickness Insurance fund0.0%2.1%
Employment Insurance0.0%1.2%
Health Insurance4.5%9.0%
Total in %11.0%33.8%

Pension Fund

The Czech pension system is structured around two components, one of which is obligatory while the other is elective. Moreover, individuals have the autonomy to save and invest their assets locally or internationally without government interference.

In alignment with the EU pension pillars, the Czech Republic oversees the following:

First pillar: This serves as the primary system, operating on a pay-as-you-go basis. Contributions from the economically active populace are directed towards supporting current retirees.

Second pillar: Unlike many other EU countries, employer pension schemes are not integrated into the Czech pension insurance system.

Third pillar: This constitutes a voluntary and supplementary pension saving option, with the provision of state contributions.

In addition to the regulated pillars, individuals have the flexibility to engage in global savings and investments.

Healthcare Insurance

Employers are mandated to contribute 9% of each employee’s income to the state’s health insurance funds. Notably, there is no upper limit on the wage base used for health insurance purposes.

Working Hours Per Week

The standard workweek consists of 40 hours, aligning with common international norms. Notably, Czech work culture often embraces an early start to the workday, with 7 am being a typical commencement time. It’s important to note that while this early start is culturally prevalent, it is not mandated by law, and many foreign-owned companies may choose to adopt different schedules in line with their own organizational practices and preferences.

Overtime

Any work conducted beyond the standard working hours is classified as overtime. However, regulations stipulate that overtime hours cannot exceed eight hours per week or 150 hours per year. Employees who work overtime are entitled to compensation, receiving at least 125% of their average pay for those additional hours worked.

An employment contract in the Czech Republic may be terminated by various means, including:

  • Agreement: Both parties, the employer and the employee, may mutually agree to terminate the contract.
  • Notice: Termination of the contract can occur through a notice period served by either party.
  • Instant Termination: In certain circumstances, such as gross misconduct, the contract may be terminated immediately without notice.
  • Termination During Probationary Period: The contract may be terminated during the probationary period as specified in the terms of employment.
  • If the contract is terminated by the employee, they are typically required to serve a notice period of two months. On the other hand, if the employer initiates termination, the conditions for doing so must be clearly outlined in the contract, specifying grounds for legal termination and any associated procedures. This ensures clarity and fairness in the termination process for both parties involved.

    Notice Period

    In the event of termination or resignation from employment, both employers and employees are obliged to adhere to a notice period of two months, which may be extended if mutually agreed upon in writing. The commencement of the notice period begins on the first day of the month following the issuance of notice and concludes on the final day of the relevant calendar month. It is mandatory for the notice period to be consistent for both parties.

    Dismissal without notice is permissible solely in cases involving gross misconduct or criminal offenses committed by the employee. Conversely, employees are not obligated to provide notice in instances of health restrictions (supported by a medical certificate indicating that work poses a serious threat to their health) or if the employer has outstanding wage payments overdue by more than 15 days.

    Employment Contract

    In the Czech Republic, employers are legally required to provide their employees with a written employment contract that comprehensively outlines all crucial terms of the employment arrangement. This includes provisions regarding parental leave entitlements, salary or wage details, sick pay policies, and the stipulated working hours. Furthermore, the contract must be drafted in Czech and utilize the Czech Koruna (CZK) as the currency. Additionally, it is imperative that the employment contract explicitly specifies three fundamental details: the nature of the work to be undertaken, the designated place of employment, and the agreed-upon commencement date of the employment relationship.

    Probation Period

    In the employment contract, employers in the Czech Republic have the option to incorporate a probationary term, which can last for a maximum period of three months. The specific duration of the probationary period is typically influenced by the nature of the job. While it is permissible to shorten the probationary period as deemed appropriate, it cannot be extended beyond the three-month limit.

    Annual Leave

    In the Czech Republic, it is mandatory for employers to provide a minimum of four weeks of vacation time annually to their employees. However, many companies go beyond this requirement by offering additional perks and benefits as part of their compensation packages. During the recruitment process, employees may negotiate for additional compensation or benefits.

    Sick Leave

    Employers are not obligated to compensate employees for the initial three days of sick leave. However, starting from the fourth day of sick leave, employers must pay 60% of the employee’s regular wage, for up to 21 days. Following this period, payments to employees are funded by the state for the duration of their absence, up to a maximum of 380 days. This system ensures that employees are supported financially during periods of illness while also managing the burden on employers for extended absences.

    Maternity Leave

    Pregnant employees are entitled to maternity leave lasting 28 weeks, which extends to 37 weeks in the case of multiple births. Maternity leave can commence six to eight weeks before the expected due date. During this pre-delivery period, the Social Security Administration provides maternity benefits to the employee, amounting to 70% of their assessed wage.

    Additionally, other benefits for parents include:

    Parental Leave: One of the parents can take parental leave until the child reaches the age of three.
    Care Leave: Employees can take up to nine days of care leave to attend to sick family members, particularly children under ten years of age.
    Parental Allowance: The Labor Office offers a parental allowance of CZK 300,000 per child up to the age of four, regardless of the parent’s income. These benefits aim to support parents during critical stages of childcare and ensure their financial stability.

    Public Holidays

    Resources

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