Employment Law

Employment Contracts in the Czech Republic

The law requires a formal employment contract for your employees in the Czech Republic, including all relevant details of the employment agreement such as wages, parental leave allowance, sick pay, working hours, etc. It should also be written in Czech and use Czech koruna currency.

Working with our Czech Republic PEO, Horizon's team of local experts can provide assistance in drafting strong employment contracts that comply with local regulations.

Working Hours in Czech Republic

Normal working hours in the Czech Republic are 40 hours per week. Czechs tend to start work earlier than most cultures, with a 7am start to work being common. However, this is not required by law and is not enforced by many foreign-owned organizations.

Overtime pay for work exceeding 40 hours per week must be at least 125% of regular wages.

Fixed Term

Indefinite

Holiday Policy

Czech Republic Holidays

Employers in the Czech Republic are required to provide their employees with at least 20 days of vacation per year. Many organizations offer additional benefits as part of their benefits package, and employees may want to negotiate additional benefits during the hiring process.

Czech Republic Sick Leave

There is no legal requirement for employers in the Czech Republic to pay employees for the first three days of absence due to illness. After the third day (up to 21 days), the employer must provide 60% of regular wages. Beyond this (and up to 380 days of absence), employees' salaries are funded by the state.

Parental Leave in the Czech Republic

Female employees can enjoy at least 28 weeks of parental leave. If more than one child is born, this period can be extended to 37 weeks. 70% of her usual salary will be borne by the state. The state also provides additional financial support.

Termination and Severance in the Czech Republic

When terminating an employment contract, both the employee and the employer must give at least two months' notice. This does not apply to the trial period, which can last up to three months.

If an employee is fired without just cause, severance may be required. For employees who have worked for the company for less than one year, financial compensation of one month's salary must be paid. For employees who have worked for one to two years, severance pay rises to two months' salary. For employees over two years, the minimum payment is three months' salary.

For companies expanding overseas for the first time, dealing with employee layoffs and dealing with severance packages can be complicated. Remoly's Czech Republic PEOs can reduce risks for foreign companies and provide guidance during the process.

Taxes in the Czech Republic

Employers in the Czech Republic are required to pay 25% of employees' wages into the social security scheme, subject to a maximum payment limit.

The income tax rate in the Czech Republic is 15%, but employees also have to pay a 7% "solidarity tax", which was introduced in 2013.

The corporate tax rate in the Czech Republic is 19%

Health Insurance in Czech Republic

Employers must contribute 9% of employees' wages to the National Health Insurance Fund. In addition to this, some employers may choose to offer private health insurance as part of their benefits package.

Salary and Benefits

Compensation Law in the Czech Republic

The minimum wage in the Czech Republic is CZK 14,600 per month (40 hours per week). However, some types of employment have higher minimum wages, so it is important that you as an employer familiarize yourself with your specific situation.

Benefits Administration in the Czech Republic

As an employer in the Czech Republic, managing your benefits package may include setting up health insurance, pension contributions, parental leave payments and more.

As a foreign company, setting up and running a benefits system for Czech employees can be difficult, and you will need to familiarize yourself with the country's customs and labor laws. The process can take a long time to set up, so if you're unsure we recommend seeking professional advice.

Remoly can simplify your Czech Republic benefits administration, with our Czech Republic experts setting up and managing everything for you and helping you focus on successfully expanding your business.