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- Paul Zimmerer
Over InterNations, I quickly got in touch with some business partners in Prague and other cities in the Eastern European market.
Employment in the Czech Republic
At a Glance:
- Located at the heart of Europe, the Czech Republic is conveniently positioned for business and trade — ideal for expats.
- The Czech economy is heavily dependent on exports, as well as having a growing service sector which makes up approximately 60% of the national GDP.
- Czech is particularly difficult to learn; however, English is widely spoken, so communication should not be an issue.
- 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.
Since the fall of the Iron Curtain, the Czech Republic has attracted expats. This may be partly due to the charms of its capital city, Prague, but can also be attributed to privatization of the Czech economy and subsequent opening-up to foreign investment during the 1990s. After the country joined the EU in 2004, finding a job in the Czech Republic has become a realistic option for many more expats.
In 2016, the government of the Czech Republic registered a new short-form name, Czechia, intended to make life easier for English speakers and clear up ongoing confusion and unofficial name shortening. The full and short name can be used interchangeably.
The Czech Market — At the Center of Everything
The Czech Republic is a particularly attractive location for both foreign employees and many international businesses due to its central location within Europe. With good transportation and infrastructure links, it’s an excellent base for doing business with Germany and Russia, for example. This infrastructure, combined with its reputation among investors as being a stable westernized market, means the country has s쳮ded in attracting a large amount of direct foreign investment.
Other advantages of working in the Czech Republic include a skilled workforce and an open economy. While the Czech language poses one of the biggest obstacles to foreign workers, the good news is that English is widely spoken throughout the business world.
The Driving Force behind the Czech Economy
The Czech Republic economy has its roots in manufacturing. During the 19th century, Bohemia and Moravia were the industrial powerhouses of the Austro-Hungarian Empire. In the inter-war years, Czechoslovakia (as it was then called) established itself as one of the leading manufacturing economies in the world. Today, roughly 38% of the total labor force remain in the industrial sector, with 60% of the labor force in the secondary sector, which comprises almost 60% of the country’s GDP.
The Czech Republic has several key industries, including motor vehicles, engineering, steel production, pharmaceuticals, and more. The automotive industry accounts for around 28% of the Czech manufacturing output and is the country’s largest single industry. Besides the automobile industry, beer is a cornerstone of the economy; the Czech Republic is Europe’s sixth largest beer producer, but when it comes to beer consumption, the Czech’s outdrink not only the rest of Europe, but the world!
The Up-and-Coming, Stagnating, and Declining Sectors
As in many countries with a strong manufacturing industry, the Czech Republic’s economy is heavily dependent on exports. Consequently, the country was affected by the 2008 global financial crisis due to the decline in foreign demand for their goods. However, in recent years it has successfully recovered, seeing steady GDP growth and a low unemployment rate (4% in June 2017).
The Czech financial sector, on the other hand, managed to remain relatively healthy during the 2008 economic crisis. This was partly because the country had experienced its own banking troubles in the late 1990s, implementing relatively conservative measures to maintain stability as a result.
While the agricultural sector is in decline (employing 3% of the labor force), the service sector is on the rise in the Czech Republic. Although the size of the service sector in relation to its contribution to the national GDP has stagnated over the past couple of years at roughly 60%, it is predicted to grow as the country moves towards a more high-tech, service-based economy.
The tourism industry is also on the rise. While Prague continues to attract record numbers of tourists every year (with just over 7 million visitors in 2016 alone), the country’s many famous spa towns (such as Karlovy Vary or Mariánske Lázně), as well as its castles, are becoming increasingly popular tourist destinations.
Obstacles at Work: Language and Corruption
Bureaucracy and corruption are features of daily life in the Czech Republic; in the 2016 Corruption Perceptions Index, Czech Republic ranked 47 out of 176 countries. Although it is technically against the law, prosecution for corruption is still poorly enforced.
Another major hurdle for expats is the Czech language; the Foreign Service Institute rate it as a level four difficulty language, requiring approximately 44 weeks of learning to become proficient. However, English is becoming more widely spoken, particularly among the younger generation, and international companies generally use English.
Work Opportunities in the Czech Republic
Expats: Globalizing the Czech Republic
The country’s thriving tourism sector provides many opportunities to work in the Czech Republic. As many leisure activities are aimed at tourists, jobs in this field are often suitable for foreign workers that speak languages other than Czech. As English is the international language of business and Germany is the Czech Republic’s main trading partner, native speakers of English and German are in high demand.
If you have the right qualifications, you may be able to find a teaching job in a private language school or for a big international company. A university degree and/or a teaching certificate (such as TEFL) plus some teaching experience are generally required. You can contact the cultural representation of your country in the Czech Republic (e.g. the British Council or the Goethe Institut) for job openings and more information.
The Big Players in the Czech Republic
There are major international companies operating in all fields in the Czech Republic. Multinational corporations are your best bet for finding work, as they usually have plenty of experience hiring foreign personnel. Exxon Mobil, Mondelēz International (formerly Kraft Foods), and Tesco, for example, are just some of the global corporations with a major presence in the country.
There are, of course, also homegrown companies which are big players on the international market, e.g. ČEZ, Agrofert, Agropol, Zentiva, Bata, Škoda, Budvar, and Pilsner Urquell. The worldwide business directory Kompass is a good place to find local companies. Alternatively, you can contact your country’s Chamber of Commerce in the Czech Republic.
Finding a Job in the Czech Republic
As mentioned above, your best chance of finding employment in the Czech Republic is with multinational companies. If you have no luck searching for job openings on their websites or by contacting them directly, you could try the traditional approach of applying via recruitment agencies or international recruitment websites. If you understand Czech, you could also use one of the many Czech recruitment websites. Please see our article on working in Prague for a list of national and international job websites.
Companies in the Czech Republic who require highly skilled staff and struggle to fill certain positions often also advertise their vacancies in the register of jobs available for employee cards or for blue cards. Please see our article on moving to the Czech Republic for more information on this topic.
If you’re looking for business opportunities in the Czech Republic, the following areas may be of interest to you:
- Science and innovation: This covers various sectors, including biotechnology (priority growth area), nanotechnology, education and training (increasing demand as companies invest in HR), and advanced engineering.
- Healthcare: There is demand not only for medical equipment and healthcare management services, but also for lifestyle products.
- Food and drink: With increasing globalization comes a higher demand for a more international cuisine and catering for special groups (e.g. vegan food).
- Consumer goods: There’s a growing demand for imported fashion items, furniture, and accessories.
Working Conditions in the Czech Republic
Employment in the Czech Republic is regulated by extensive labor laws. The Labor Code stipulates, among other things, that any employment must be regulated by a written employment contract detailing the nature of the work and other important details such as working hours, the length of the probation period, annual leave, minimum wage, etc.
By law, the probation period cannot exceed three months (or six months for managerial positions). Every employee is entitled to four weeks of paid annual leave, with one supplementary week being standard in well-established companies. Average working hours for full-time employees are around 41.7 hours per week, just over the OECD average.
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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- Paul Zimmerer
Over InterNations, I quickly got in touch with some business partners in Prague and other cities in the Eastern European market.
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