Salary in the Czech Republic: how much will you get?

If you are working in the Czech Republic or just planning to take up full-time employment (hlavní pracovní poměr), it is important to understand the difference between gross salary (hrubá mzda) and net salary (cistá mzda). This will help you estimate your income correctly, plan your budget and avoid unpleasant surprises when you receive your first paycheck. Let's get to the bottom of it!

Hrubá mzda - is the amount specified in your employment contract. It includes taxes and mandatory contributions that are automatically deducted from your salary. In other words, it is the amount before all deductions.

Cistá mzda - is the amount you actually receive after all mandatory deductions. In the Czech Republic, these deductions include:

• Income tax (daň z príjmu) - 15% or 23% for incomes above 161,296 Kč per month (as of 2024);
• Social insurance (sociální pojištění) – 6,5 %;
• Sick leave (nemocenské pojištěníní) - 0.6%;
• Health insurance (zdravotní pojištění) - 4.5%.

It is important to take into account that for some categories of employees there are special tax discounts that allow you to reduce the amount of tax and, accordingly, increase the amount of salary "in hand".

The Czech Republic provides for tax rebates that reduce the amount of tax. They are applied to gross wages and reduce the tax burden.
Here are the main types of discounts:

• Basic tax discount (sleva na poplatníka) - 2,570 Kč per month, granted to each employee;
• Child tax credit (sleva na dítě) - depends on the number of children, e.g. for the first child - 15,204 Kč per year, for the second child - 22,320 Kč, for the third and subsequent children - 27,840 Kč;
• Student discount (sleva na studenta) - for students up to 26 years old;
• Spouse discount (sleva na manželku/manžela) - if the spouse has no income, you can get a discount of 24,840 Kč per year;
• Discount for people with disabilities (sleva na ZTP/P)

If you are eligible for more than one rebate, they add up, which significantly reduces the amount of tax on your income.

It is important to realize that your gross salary is not the employer's final expense. In addition to your paycheck, your employer makes additional contributions:

• 24.8% of your gross wages for social security;
• 9% for health insurance.

This means that the employer's actual costs per employee are much higher than the amount specified in the employment contract. For example, if you are paid 40,000 Kč gross, your services cost the employer approximately 53,520 Kč.

Let's say your contract specifies an amount 40 000 Kč hrubého:

• Income tax (15%): 4 500 Kč (after tax discount sleva na poplatníka);
• Social insurance (6.5%): 2,600 Kč;
• Health insurance (4.5%): 1,800 Kč;
• Sick pay (0.6%): 240 Kč;

As a result, you'll get 31 930 Kč on your hands. And the employer will pay for you:

• Social insurance (24.8%): 9,920 Kč;
• Health insurance (9%): 3,600 Kč;

The total cost to the employer of your salary will be as follows 53 520 Kč.

Some companies provide employees with additional benefits that are not taxable. These may include:

• Food allowance (stravenky) - the employer can partially reimburse the cost of food;
• 13th paycheck or bonuses - some companies pay an additional salary once a year;
• Reimbursement of transportation costs;
• Supplementary pension insurance - if the employer contributes to a private pension fund.