Czech Republic – Key Employee Tax and Social Security Changes in 2026

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Increase in maximum annual assessment base for social security contributions and progressive tax threshold¹

For 2026, the maximum annual assessment base for social security contributions has increased to CZK 2,350,416. Once this income threshold is reached, no further social security contributions are paid by the employee or employer.

At the same time, the threshold for applying the 23 percent tax rate has increased to an annual income over CZK 1,762,812, which corresponds to a monthly income over CZK 146,901. Income below this threshold continues to be taxed at a rate of 15 percent.

Agreements on work outside employment

The decisive income for participation in sickness insurance has increased to CZK 12,000 per month. If this threshold is reached, the income from the agreements on work outside employment is subject to social security and health insurance contributions.

Increase in minimum wage²

From January 2026, the minimum wage has increased from CZK 20,800 to CZK 22,400 for a set weekly working time of 40 hours, with an hourly minimum wage of CZK 134.40. As a result, the minimum monthly assessment base for employees’ health insurance is also higher.

Increase in limit for exemption of non-financial benefits

From 1 January 2026, the limits for the exemption of health- and leisure-related employee benefits have increased. Benefits not exceeding these limits are not subject to taxation and social security and health insurance contributions on the part of employees.

The limit for the exemption of health-related benefits has been set for 2026 at the level of the average wage, i.e., CZK 48,967; the limit for the exemption of leisure-related benefits is set at 50 percent of the average wage, i.e., CZK 24,483.50.

Changes in domestic and foreign travel allowances³

From 1 January 2026, the minimum basic allowance for the use of a personal motor vehicle on a business trip has changed from CZK 5.80 to CZK 5.90 per kilometre. Meal allowances for domestic and some foreign business trips (obligatory under the Labour Code) have also increased.

Lump-sum compensation for remote work⁴

The lump-sum compensation for expenses related to remote work (home office), which employers might need to provide under the Labour Code (unless they agree with employees otherwise), has decreased from CZK 4.80 to CZK 4.70 per hour.

Employee meal allowances

Both financial and non-financial meal allowances (non-obligatory employee benefits) are exempt up to an aggregate of 70 percent of the upper limit of the meal allowance that can be provided to salaried employees for domestic business trips of 5 to 12 hours. For 2026, an allowance of CZK 129.50 is therefore exempt.

The meal allowance exemption is conditional upon the employee having worked at least three hours per shift; employees without a set shift (e.g., statutory bodies) might need to work at least three hours per calendar day. At the same time, employees may not be entitled at the same time to an obligatory meal allowance as part of a travel allowance.

Employees are entitled to an additional exempt allowance (in the same amount) if the total shift, including breaks, exceeds 11 hours (employees without a set shift could work at least 11 hours per calendar day).

Single monthly employer reporting (JMHZ)⁵

The single monthly employer reporting (JMHZ) is expected to fundamentally change the way employers report data to social security authorities and many other authorities included in the system.

The JMHZ is set to replace the monthly reports to the Czech Social Security Administration (ČSSZ) and consolidate a number of reporting obligations into a single electronic submission to be filed once a month, always between the first and the 20th day of the following month.

In the transitional period from January to March 2026, no reports are likely to be submitted. During this period, employers might only pay social security contributions. The reports for this period are expected to be submitted between 1 April and 30 June 2026. The first standard JMHZ might be submitted for the month of April 2026, i.e. between 1 and 20 May 2026.

The JMHZ does not cover health insurance. In 2026, employers are therefore expected to submit regular monthly overviews and notifications to health insurance companies as they have done in the past.

Abolition of withholding tax for tax non-resident members of statutory bodies⁶

Remuneration paid to members of statutory bodies who are Czech tax non-residents is now subject to monthly payroll tax prepayments (and progressive taxation). Withholding tax that had been applied until the end of 2025, is therefore no longer levied. If the remuneration of a tax non-resident exceeds 36 times the average wage, they are required to file a Czech personal income tax return for the given taxable period.

Low-emission vehicle definition⁷

For income tax purposes, a new definition of a low-emission vehicle applies. A low-emission vehicle is defined as a road motor vehicle in category M1, M2, or N1 that does not exceed a CO₂ emission limit of 50 g/km and is not classified as a zero-emission vehicle.

Release from obligation to withhold tax prepayments for employees posted abroad

From January 2026, employers are not required to withhold tax prepayments for employees posted abroad if all the statutory conditions are satisfied.

Mandatory employer contributions to retirement savings products⁸

Employers are now required to contribute to supplementary pension insurance or additional pension savings schemes for employees who perform third category risk work (if the employee works at least three shifts of this risk work in a given month).

The contribution is mandatory once the employee requests it and it equals four percent of the social security assessment base. It is tax-deductible for the employer and counts towards the annual limit of CZK 50,000 that is exempt from tax and insurance contributions for the employee. 

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