Thursday, January 19, 2017

New 2017 Tax Allowances

Czech taxes change a bit in 2017.  Most of them don't really apply to me but here are the highlights.

The Czech minimum wage increases from 9.900 Kč ($452.60) to 11.000 Kč ($503) per month.  This 1.100 Kč increase is the biggest increase in Czech history.

For students and part-time jobs, the minimum hourly wage increases from 58,70 Kč ($2.68) to 66 Kč ($3.02).  As long as the work is completed in 300 hours and the salary doesn't go over 10.000 Kč then the employee is not required to fill out a tax declaration form.  The employee doesn't pay any social security or health insurance contributions.

As long as a kid qualifies as a dependent living with the taxpayer then the child tax credit increases.
For one child the allowance remains at 13.404 Kč per month.
For a second child the allowance increases from 15.804 Kč to 19.404 Kč.
For three or more children the allowance increases from 17.004 Kč to 24.204 Kc.

The Kindergarten tax allowance also increases to match the new minimum wage of 11.000 Kč.  One parent can deduct this with an attendance confirmation from the child's kindergarten.  Remember over here, Czech kindergarten is the equivalent of a U.S. pre-school.

The government has doubled the deduction limit for health insurance and pension contributions from the tax base.  The new limit is now 24.000 Kč.  For people who save 3.000 Kč per month then the state will provide a pension contribution up to 6.360 Kč.

Back under communism it was illegal to be unemployed.  Things are different now.  People who are unemployed and who are not officially registered at an agency, or for students over 26 years old, must pay 1.485 Kč ($68) per month for mandatory health insurance.

People who are recently unemployed may keep their jobseeker's allowance and work part-time so long as the monthly income doesn't exceed 5.500 Kč.

One thing that does impact me is that there will be a simplified two-page tax form.  People with more than one income will continue to submit the four-page form with attachments.

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