Final super-gross salary cancellation in the Czech Republic

Nov. 20, 2020 Czech Republic

Today the Chamber of Deputies approved the abolition of the super-gross salary, however the proposal has yet to be approved by the Senate and the President of the Czech Republic.

Newly, the income tax of 15 % for employees will be calculated of gross salary, not super-gross salary, as has been the case so far. This will reduce real salary taxation from 20.1% to 15%, resulting in significant savings. The solidarity tax will be replaced by a second increased tax rate of 23%, which will be applied to income higher than CZK 141,764 per month. The increased tax rate of 23% will be also applied, for example, to rental income, selected capital income and other income. The change in the income tax calculation should apply from 1.1.2021.

Should you have any other questions regarding super-gross salary cancellation, do not hesitate to contact our tax experts:

Lucie Berglová
Head of Tax Team
ASB Czech Republic
lberglova@asbgroup.eu

Kristýna Kolářová
Junior Tax Consultant
ASB Czech Republic
kkolarova@asbgroup.eu