Moving to the Czech Republic and settling in is only half the job. The second half is to understand what mandatory payments await you, where to pay them, and what will happen if you don't. The Czech system is clear, but without practice, it's easy to get confused by abbreviations, terms, and government offices. Let's break it down step by step — for employees and for those who have started their own business.
For Employees: zaměstnanec
Health Insurance
Health insurance in the Czech Republic (zdravotní pojištění) is mandatory for everyone working for a Czech employer, regardless of citizenship. When working under an employment contract, the employee is entitled to health and social insurance under the same conditions as a Czech citizen.
An important detail: citizens of non-EU countries who do not yet have an employment contract — for example, they are only submitting documents or applying for a residence permit — cannot automatically join the public insurance system. For the transitional period, they must obtain commercial health insurance. Arrivals from outside the EU with long-term visas for more than 90 days are obliged to obtain comprehensive health insurance. As soon as the employment contract is signed, the employer registers you in the public system.
A citizen without a permanent residence permit in the Czech Republic is a mandatory participant in the public health insurance system if they are an employee of an employer registered or residing in the Czech Republic.
Bilateral agreements are in place for citizens of several countries. Citizens of Turkey, North Macedonia, Serbia, Montenegro, Albania, Tunisia, the USA, Japan, and Israel employed in the Czech Republic become participants in the public health insurance system.
The employer's contribution rate for health insurance is 9%, and the employee pays 4.5% — a total of 13.5% of the gross salary. The employer deducts your share from your salary and transfers everything to the insurance company themselves. No separate actions are required from you.
The minimum assessment base in 2026 is the minimum wage, which is 22,400 Kč. The minimum monthly health insurance contribution for employees is 3,024 Kč. If you work part-time and your gross salary is below the minimum, the employee must pay the difference up to the minimum themselves.
There are seven health insurance companies operating in the Czech Republic, and they cannot compete with different rates — monthly payments are the same for all. You can change your insurance provider once a year — by January 1st or July 1st.
Social Insurance
Social insurance in the Czech Republic (sociální pojištění) covers three areas: pension insurance (důchodové pojištění), sickness insurance (nemocenské pojištění), and a contribution to state employment policy (příspěvek na státní politiku zaměstnanosti). All three are combined into one payment administered by the ČSSZ — Česká správa sociálního zabezpečení (Czech Social Security Administration).
Employees have 7.1% of their gross salary deducted monthly for social insurance. Additionally, the employer pays another 25% of the gross salary for them, and it is the employer who transfers these contributions monthly.
To break it down in more detail:
The employer transfers 24.8% of the gross salary for each employee: of this, 2.1% is for sickness insurance, 21.5% is for pension insurance, and 1.2% is to the employment fund. The employee pays 7.1%: 0.6% for sickness insurance, 6.5% for pension insurance. Thus, the total burden for social insurance from one workplace is almost 32% of the gross salary — but the employee pays only 7.1% out of their own pocket. All deductions and transfers are handled by the employer; you do not need to go to the ČSSZ yourself. The maximum annual assessment base in 2026 is 2,350,416 Kč. Once this is reached, social insurance contributions from the employee and employer cease.
Income Tax for Employees
In the Czech Republic, the basic income tax rate is 15%, and for the portion of income exceeding 48 times the average wage, a higher rate of 23% applies. In 2026, the annual threshold for applying the 23% rate is 1,762,812 Kč, which is 146,901 Kč per month. In simple terms, if your gross salary does not exceed approximately 147,000 Kč per month, your entire income is taxed at a 15% rate.
Most employees in the Czech Republic do not need to file a tax return themselves. The employer deducts advance tax payments from the salary monthly and transfers them to the budget. At the end of the year, if the employee has submitted a declaration (prohlášení k dani), the employer will perform the annual reconciliation and refund any overpayment with the next salary.
Main Allowances and Deductions
The basic taxpayer allowance of 30,840 Kč per year is available to everyone without exception — from an employee on the minimum wage to a top manager with a high income. In addition to the basic allowance, you can use: an allowance for the first child of 15,204 Kč, for the second — 22,320 Kč, for the third and each subsequent child — 27,840 Kč per year; as well as a deduction for mortgage interest and pension savings contributions — up to 48,000 Kč per year.
You need to file a tax return yourself if, for example, you worked for multiple employers simultaneously, have rental income, or want to claim deductions that your employer did not consider. The deadline for filing a paper return for 2025 is April 1, 2026, for electronic filing it is May 4, 2026, and with a tax advisor it is July 1, 2026.
For Entrepreneurs: OSVČ (živnostník)
If you have obtained a trade license (živnostenský list) and work as an OSVČ — osoba samostatně výdělečně činná, meaning a self-employed individual — your obligations are structured differently. Here, you are responsible for everything yourself: insurance, taxes, and timely submission of documents. Let's look at each component.
Health Insurance for OSVČ
From January 1, 2026, OSVČ with primary activity are required to pay a minimum monthly advance for health insurance in the amount of 3,306 Kč. The deadline for paying the first advance is no later than February 9, 2026.
The rate is the same as for employees — 13.5%, but it is calculated on an assessment base equal to 50% of profit. Advances are paid monthly by the 8th of the following month to your insurance company's account. At the end of the year, you submit a statement of income and expenses (přehled) to the insurance company and make the final settlement.
Social Insurance for OSVČ
The social insurance rate for OSVČ is 29.2% of the assessment base. The assessment base is 55% of the profit from the previous year. The minimum monthly advance for pension insurance for OSVČ with primary activity in 2026 is 5,720 Kč, and for those who conduct business as a secondary activity (vedlejší činnost) — 1,574 Kč.
Participation of OSVČ in sickness insurance (nemocenské pojištění) is voluntary. The minimum monthly contribution is 243 Kč. Without this contribution, you will not receive payments in case of illness — keep this in mind when planning.
Income Tax for OSVČ
The rates are the same — 15% and 23%. The taxable base is income minus expenses. Expenses can be accounted for in two ways:
Actual expenses — you keep records of all costs (invoices, receipts, contracts) and deduct the amounts actually confirmed. This is beneficial if your expenses are genuinely high.
Expense ratio (výdajový paušál) — instead of actual accounting, you deduct a fixed percentage of income depending on the type of activity: 80% for crafts and agriculture, 60% for most trades, 40% for freelance professionals and landlords. This is convenient if your actual expenses are low.
Flat-Rate Tax (paušální daň)
The flat-rate regime is a significant simplification of the administrative tax burden for OSVČ. Instead of annual tax returns and insurance contribution reports, entrepreneurs pay one monthly flat-rate amount that includes income tax, social, and health insurance.
In 2026, there are three levels depending on income:
First level (9,984 Kč per month) — for income up to 1 million Kč, or up to 1.5 million Kč if 75% of income is from activities with a 60% or 80% expense ratio, or up to 2 million Kč if 75% of income is from activities with an 80% expense ratio.
Second level (16,745 Kč) — for income from 1 to 1.5 million Kč.
Third level (27,139 Kč) — for income up to 2 million Kč without meeting the conditions of the first two levels.
While in the flat-rate regime, you do not file a tax return or submit reports to the ČSSZ and the insurance company — provided you have complied with the regime's conditions throughout the year.
Deadlines and Declarations for OSVČ
All OSVČ who conducted self-employment activities in 2025 are required to file a tax return — even with zero profit or a loss. An exception is OSVČ who paid the flat-rate tax all year and had no other taxable income.
OSVČ with active data boxes (datová schránka) are required to file their tax return exclusively electronically — no later than May 4, 2026. After filing the tax return, you have one month to also submit the statement of income and expenses (přehled) to the insurance company and the ČSSZ.
Practical Advice: What to Do First
The Czech payment system is logical but requires adherence to deadlines. Here is a minimal checklist for migrants who are just starting to work or opening a business:
For Employees:
Ensure that your employer has registered you with the insurance company and the ČSSZ — this is their responsibility, but it's worth checking.
At the beginning of the year, sign the tax declaration (prohlášení k dani) with your employer — this will allow you to use the basic allowance and perform the annual reconciliation without excessive paperwork.
If you have children, a mortgage, or other grounds for deductions — consult with your employer or a tax advisor on how to apply them.
For Entrepreneurs (OSVČ):
Immediately after opening your trade license, register with your health insurance company (zdravotní pojišťovna) — you must do this within 8 days.
Register with the ČSSZ as an OSVČ.
Opening a trade license automatically means registration with the tax administrator (finanční úřad) — this happens through the trade licensing office (živnostenský úřad).
Calculate whether the flat-rate regime is beneficial for you: an application to join it must be submitted by the 10th day of the current tax year.
Common Migrant Mistakes: The most common is a gap in insurance in the first few weeks after arrival when the employment contract has not yet been signed. Commercial insurance is needed for this period. Another common mistake among OSVČ is not paying advances on time and hoping to sort it out at the end of the year: penalties accumulate quickly. Finally, many people do not know that they can use the basic allowance of 30,840 Kč — this is over 2,500 Kč per month that the state essentially returns to every taxpayer.
The Czech tax and insurance system is not the simplest, but it is quite predictable: rates are fixed, deadlines are known in advance, and most operations are handled by your employer. For an employee, it is enough to understand the logic once and sign the necessary documents. An entrepreneur takes on more responsibility but has flexibility in choosing their tax regime.
The main rule is not to ignore the system. A gap in insurance, a missed deadline, or unregistered activity can lead to amounts disproportionate to the cost of a timely visit to an accountant or tax advisor. Russian- and Ukrainian-speaking specialists work in the Czech Republic who can help you understand the details of your specific situation.
