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Czech Republic: Pay and benefits

Original and updating authors: Jaroslav Škubal, Tereza Erényi and Daniel Vejsada, PRK Partners Prague
Consultant editor: Nataša Randlová, Randl Partners, Prague

Summary

  • Wages must be based on the complexity, responsibility and difficulty of the work performed, and must be agreed or otherwise determined before the employee starts work. (See General)
  • Wages must be paid in Czech currency, and in accordance with various rules on the frequency and method of payment. (See Payment of wages)
  • Deductions from wages are permitted only for specified reasons and are subject to limits. (See Deductions)
  • All employees of the same employer are entitled to receive equal pay for equal work or work of equal value. (See Equal pay)
  • There is a statutory minimum wage that applies to all employees, along with "guaranteed" minimum wage rates for employees whose pay is not set by a collective agreement. (See Minimum wages)
  • The pension system consists of two "pillars", which are a mandatory state retirement pension (first pillar) and supplementary private pensions insurance (third pillar). The second pillar that allowed voluntary pension savings by employees (with an employer contribution) was abolished with effect from 1 January 2016. (See Pensions)
  • Income tax on employment income must be withheld by the employer at source. Employers and employees must pay contributions to the state social insurance system and to the public health insurance scheme. (See Income tax and social security)
  • During sickness absence, employees are entitled to sick pay from the employer from the fourth working day of absence to the 14th calendar day of absence, and to state sickness benefits from the 15th calendar day of absence. (See Pay for employees not at work)