2021 Labour Code Changes

There are several changes to the Czech labour code which took effect on 1 January.

 An employee's vacation time is now determined by the number of hours worked during a week and not but the number of days worked.  This makes it fairer for employees who work part-time or work irregular shifts.  The law provides for a minimum of 4 weeks (160) hours of vacation time per year for a full-time employee.  While 4 weeks of vacation time is the minimum required under the labour code, many companies actually provide 5 weeks off in order to be competitive.

There's a new shared workplace law that allows an employer to hire two or more part-time employees to fulfil one full-time job.  The employer determines the schedule of working hours and the shared workplace has to be agreed upon will all the employees by a special written agreement.

The amount of worker's compensation benefits have been increased.  The circle of relatives eligible for survivor's benefits have also been extended.  There's now a new one-off compensation in place for non-pecuniary damage in the event of serious health damage to an employee.

Freelancers are now allowed to pay a flat tax instead of monthly contributions.  The 2021 flat tax is 5.469 Kč ($255) per month.  This includes the minimum health insurance contribution of 2.393 Kč and the  2.976 Kč minimum contribution for social security insurance.

The annual taxpayer allowance increases to 27.840 Kč ($1,297).  In 2022 it will increase to 30.840 Kč ($1,437).

The government has done away with the super-gross salary.  Previously, a person's tax base included the social and health insurance contributions made by one's employer.  

The solidarity tax has been eliminated.  This was an extra 7% on all income over 100.000 Kč ($4,660) per month.

Instead there's now a progressive income tax for people of 15% and 23%.  The 23% rate is for people whose income exceeds 48 times the average yearly salary.  For this year that's for people earning 1.701.168 Kč ($79,279).