The year 2025 brings a number of significant changes in the area of wage legislation that will affect both employers and employees. We will write about these legislative changes in detail in the following article.
Digitising other sickness insurance benefits
As of 1 January 2025, the remaining sickness insurance benefits have been digitised. The benefits work similarly to the eSick leave.
These benefits are as follows:
- Family member care
- Long-term family member care
- Maternity leave
- Paternity leave
- Pregnancy and maternity compensatory allowance
More information and detailed guidance can be found directly on the CSSZ website at this link.
Maximum assessment base for 2025
On 1 January 2025, the maximum amount of gross income subject to social security contributions was set at 2,234,736 CZK.
Threshold for progressive tax payment for 2025
The maximum assessment base for social security insurance no longer influences the taxation of personal income. Incomes exceeding CZK 1,676,052 (CZK 139,671 per month) is now subject to the higher tax rate of 23%, while incomes below this threshold are taxed at a rate of 15%.
Exemption limit for non-cash income
The annual limit for the exemption of non-cash employee benefits has been increased to CZK 23,278.50 for 2025. Thus, there is an increase of CZK 1,295 compared to 2024.
At the same time, there is another category of employee benefits that is no longer counted towards the above limit. These are health care benefits (e.g. rehabilitation allowances in a medical facility, above-standard medical care of the Canadian Medical type) for which the income tax exemption limit will be CZK 46,557 (amount of the average wage for 2025) as of 1 January 2025.
The limits for contributions to pension insurance and similar products remain the same at CZK 50,000 and do not count against the previous limits.
The applicable income for obligatory contribution payments from agreements on work performance and work activity
The applicable income for small-scale employment (work activity agreements) was increased to CZK 4,500 on 1 January 2025.
This amount is also increased for agreements on the performance of work up to CZK 11,500. If there are several agreements with one employer, the income is added together. Obligations regarding the registration and reporting of DPP will remain as they were after 1 July 2024. The changes originally approved from 1 January 2025 were cancelled before the start of the validity (Announced Agreement regime).
Meal voucher allowance
The cash meal allowance for one shift is exempt from income tax (and thus from insurance contributions) on the part of the employee up to 70% of the upper limit of the meal allowance for a working trip lasting 5 to 12 hours set for a salaried employee, i.e. an employee referred to in Section 109(3) of the Labour Code. As of 1 January 2025, the amount has been CZK 123.90 (70% of CZK 177.00)
Minimum wage
The minimum wage for 40 hours per week is set at CZK 20,800 per month and CZK 124.40 for 2025 per hour. For 2025, the minimum assessment base is equal to this amount, and the minimum health insurance premium is CZK 2,808.
The so-called guaranteed wage (guaranteed minimum for specified professions) has been abolished in the private sector as of 1 January 2025, leaving only the guaranteed wage in the public sector.
The mechanism for setting the minimum wage and the abolition of the guaranteed wage was part of the amendment to the Labour Code effective from 1 August 2024.
Self-scheduling of working hours
On 1 January 2025, the so-called self-scheduling of working time came into force. This was already included and approved in the Transposition Amendment to the Labour Code, which was put into force by the majority on 1 August 2024, but it had a delayed effect.
Social insurance discount for working pensioners
The pension reform, which has already been approved unchanged by the Senate and signed by the President, includes a new feature. Working pensioners will no longer have to pay social insurance contributions.
As of 1 January 2025, a working old age pensioner can claim a discount of 6.5% of the assessment base for social security contributions from one or more employers under the following conditions.
Conditions: 589/1992 Coll. Sec. 7d:
- They have reached retirement age;
- They must be entitled to receive the full payment, and this condition must apply throughout the calendar month for which they claim the premium reduction;
- The pension is awarded on the basis of the situation at the beginning of the calendar month, i.e. what the situation was on the first day of the month in which the pension was awarded and whether the full amount of the pension was payable.
In other words, the employee is entitled to a contribution rebate for the calendar months in which they were entitled to a retirement pension payment for the entire calendar month. For the calendar month from which the pension was awarded, the discount is only due if the pension was awarded from the first day of the month. Of course, the employee will have to claim the discount from their employer.
Employers will thus no longer be obliged to keep pension insurance records (ELDPs) for working old age pensioners, thanks to the total abolition of the mechanism for increasing pensions after retirement age, which will be replaced by a discount on insurance premiums from 1 January 2025. This does not apply to employees who are or have been covered by pension insurance abroad. However, this is certainly a very unique situation, so it reduces the administrative burden for employers in this respect, as they no longer keep ELDPs for all other old age pensioners from January 2025.
More information can be found directly on the CSSZ website at this link.
Disguised performance of dependent work – tighter rules
On 1 January 2025, the powers of inspectors to inspect disguised employment were strengthened, and new sanctions for illegal work were introduced.
Are you interested in how legislative changes specifically affect your company and your employees? Do not hesitate to contact us at any time.
If you would like to find out about the annual reconciliation of income tax advances from dependent activities and obligatory share of employees with disabilities, download our guides.
