Payroll Changes for 2021

Dear business partners, We would like to inform you about what payroll changes you can expect in 2021. For example, you can learn about the much-discussed raising of the minimum wage or abolition of the super-gross salary. What are we to expect?

Minimum wage increase

  • The minimum monthly salary for full-time work will increase from the current CZK 14,600 to CZK 15,200.
  • The hourly wage increases from CZK 87.30 to CZK 90.50.

Guaranteed wage increase

2021 Monthly salary Hourly wage
Work group 1 CZK 15,200 CZK 90.50
Work group 2 CZK 16,800 CZK 99.90
Work group 3 CZK 18,500 CZK 110.30
Work group 4 CZK 20,500 CZK 121.80
Work group 5 CZK 22,600 CZK 134.40
Work group 6 CZK 24,900 CZK 148.40
Work group 7 CZK 27,500 CZK 163.90
Work group 8 CZK 30,400 CZK 181.00

Maximum assessment base for 2021

  • The maximum assessment base for social security contributions in 2021 increases from CZK 1,672,080 to CZK 1,701,168.
Tax package – abolition of the super-gross salary and the solidarity surcharge, increase in the tax credit per taxpayer, introduction of flat-rate meal vouchers
  • As of 1 January 2021, the super-gross salary is abolished and the calculation of income tax changes.
  • As of 1 January 2021, a personal income tax rate in the amount of 15% of gross income and a second increased rate in the amount of 23% of monthly gross income exceeding CZK 141,764 (this second rate replaces the solidarity surcharge) are introduced.
  • The basic tax credit per taxpayer increases from CZK 24,840 to CZK 27,840.
  • Introduction of flat-rate meal vouchers – the employer now has the option to pay the meal allowance to employees as a flat-rate benefit, which is not subject to social and health insurance contributions or taxation.

 Changes in personal income tax

  • Small-scale employment – gross income up to CZK 3,500 is not subject to insurance contributions.
  • Withholding tax – withholding tax will be levied on those employees whose total income per calendar month received from the given employer does not exceed CZK 3,500.

 Sickness benefit and salary compensation for incapacity for work to increase

  • As of 1 January 2021, the compensation paid by the employer and sickness benefit paid by the Czech Social Security Administration in the event of temporary incapacity for work have increased as a result of the increase in reduction limits.
  • With effect from 1 January, salary compensation and sickness benefit will also increase for employees on long-term sickness leave.
Reduction limits for salary compensation in 2021
Reduction limits
First CZK 206.850
Second CZK 310.275
Third CZK 620.375

e-Sick Leave

  • Continues to apply to incapacity for work only.
  • Carer’s allowance, maternity and paternity benefits – all documents are still submitted in paper form.
e-Sick Leave forms remain unchanged – the first part is in paper form (Certificate of an insured person temporarily incapable to work); the other two parts are in electronic form (date of start and termination of temporary incapacity to work). Upon termination of incapacity for work, the employer is obligated to file an employer’s report on the date of the employee’s return and days worked during the incapacity for work. Communication with regard to e-Sick Leave takes place via:
  • CSSA ePortal
  • Data boxes
  • Automated communication through payroll or HR SW.

Changes in calculation of annual leave entitlement

Unseizable minimum for distraint calculation

  • The debtor’s unseizable minimum newly amounts to CZK 7,872.30.
  • The unseizable minimum for a spouse or child now amounts to CZK 2,624.30.

Basic compensation rate for the use of motor vehicles

Pursuant to Section 157 (4) of the Labour Code, the basic compensation rate for 1 km of driving amounts to at least:
  • CZK 1.20 for two-wheeled vehicles and tricycles,
  • CZK 4.40 for passenger motor vehicles.

Meal allowance for business trips

For each calendar day of the business trip, employees are entitled to a meal allowance in the amount of:
  • CZK 91 to CZK 108, if the business trip lasts from 5 to 12 hours,
  • CZK 138 to CZK 167, if the business trip lasts between 12 and 18 hours,
  • CZK 217 to CZK 259, if the business trip lasts longer than 18 hours.

Average fuel price

As of 1 January 2021, the amount of average fuel prices changes as follows:
  • CZK 27.80 per 1 litre of 95-octane gasoline,
  • CZK 31.50 per 1 litre of 98-octane gasoline,
  • CZK 27.20 per 1 litre of diesel fuel,
  • CZK 5.00 per 1 kilowatt-hour of electricity.
We will be happy to relieve you of your worries and take over your payroll. Contact us!