Working in the Czech Republic?
Czech Republic: Work Permits & Taxation
EU/EEA citizens enjoy the freedom to settle and work in the Czech Republic. All other nationalities, however, must obtain a work permit before they can legally take up employment. As a general rule, foreigners can be employed in the Czech Republic under two conditions: the employer has obtained a permit from the Labor Office to employ foreigners and the employee has been granted a work permit for the job in question.
The First Step to Hiring Expats
Foreigners can only be employed in positions for which no suitable candidate could be found within the Czech Republic or other EU member states. The vacant position must be reported to the Labor Office and the specification cannot be changed at a later stage to fit the profile of a potential employee. Working conditions of foreign employees must correspond to those of Czech employees in similar positions, but their salary must be at least 1.5 times that of the average gross annual salary in the Czech Republic.
Once all these basic requirements have been established, the employer can apply for a permit to hire employees from abroad. Applications are submitted to the Labor Office responsible for the district where the foreigner will be employed. It is important that the employee has obtained their work permit before entering the country; the employer may be liable to pay the costs of the employee’s expulsion should they not have it.
Got the Job? Now Get the Work Permit!
A prospective foreign employee has to apply for a work permit at the Labor Office before moving to the Czech Republic. A work permit can only be issued for the exact job and employer specified in the application. It is non-transferrable and only valid for two years, after which a new application must be submitted. If any of the conditions specified in the work permit change prior to its expiration, the employee must apply for a new one.
An application consists of:
- proof of identity (e.g. photocopy of the relevant pages of your passport, including passport number)
- proof of address in the foreigner’s country of permanent residence
- all information necessary to identify the future employer (name, registered office, identification number)
- information regarding place, duration, and type of work
- declaration from the employer that he/she will employ the foreigner
- notarized copies of academic and professional qualifications relevant to the type of work
- administration fee (500 CZK)
All documents must be submitted as originals or officially certified copies and be accompanied by a notarized Czech translation. For more information on obtaining a work permit for the Czech Republic, please visit the website of the Ministry of Labor and Social Affairs.
Please note that to work in the Czech Republic, you must have a valid employment visa. More details regarding visas and residence permits can be found in our article on moving to the Czech Republic.
Taxation — Which Rates Apply to You?
Taxes in the Czech Republic depends on your resident status. Anyone with a permanent home in the Czech Republic where they spend more than 183 days per calendar year is considered a resident for tax purposes. This means that you will be taxed on your worldwide income in the Czech Republic. If your residence remains outside the country’s borders, you will only be taxed on income from sources in the Czech Republic.
Resident employees are taxed at a flat rate of 15% on their personal income. Provisions by your employer — such as a car which is available for private use — are taxable. For more details, please consult the pages of the Czech Ministry of Finance. Furthermore, you can check to see whether your country of origin has a treaty for the avoidance of double taxation with the Czech Republic.
Choosing the Right Social Security Provider
The Czech Republic has a comprehensive social and health insurance system. General health insurance is provided by nine different, independent funds. Every person is free to choose their fund and health care provider, to which they pay mandatory contributions.
Social security consists of pension, sickness, and unemployment benefits. Everybody working in the Czech Republic pays contributions based on their income. As of March 2017, the combined amount of social security contributions is 45% of an employee’s gross salary, 34% of which are payable by the employer leaving 11% to be paid by the employee.
However, there may be some exemptions for non-Czech nationals on short-term work placements. If you are an EU citizen, you can be exempt from Czech social security contributions provided you continue to pay in your normal country of residence. The same goes for citizens of countries that have a social security agreement with the Czech Republic. The Ministry of Labor and Social Affairs provides more information on this topic.
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