Employing people in Czechia: employer obligations

Taking on a first employee is a milestone for a company, but also the moment when new obligations towards the authorities and towards the employee fall upon it. It is not just about the wage — around it revolve contributions, taxes, reporting deadlines and labour-law rules, whose breach is linked to penalties.

The year 2026 also brings two changes that must be set up right away: a unified monthly employer report and the obligation to register an employee before they start. Let's go through what awaits an employer — from registration, through contributions, to penalties.

Registration and registering the employee

A company employing for the first time must register as an employer with the social security administration, at the latest two working days before the first employee starts. At the same time it registers with the health insurers with which its employees are insured.

From 1 January 2026 an employer files a unified monthly report (JMHZ), which replaces several separate reports to the authorities with a single submission. From 1 July 2026, moreover, a new employee must be registered for social insurance before they start work — not afterwards. The health insurer must be informed within eight days. These deadlines are short and missing them is penalised, so it pays to have the process set up in advance.

Wage, contributions and what an employee really costs

The minimum wage in 2026 is CZK 22,400 per month, and no one on a full-time contract may receive less. On top of the gross wage the employer pays extra contributions: 24.8 % for social and 9 % for health insurance, i.e. 33.8 %. The employee has 11.6 % of contributions deducted from the wage (7.1 % social and 4.5 % health) and a 15 % tax advance, reduced by the basic monthly relief for the taxpayer of CZK 2,570.

What this looks like in figures is shown by a simple example. At a gross wage of CZK 40,000 the employer pays an extra 33.8 % in contributions, i.e. CZK 13,520, so the total cost of the employee is CZK 53,520 per month. The employee has CZK 4,640 of contributions and a CZK 3,430 tax advance deducted (15 % of the wage minus the relief), so the net wage comes to about CZK 31,930. The employer's cost is therefore roughly a third higher than the gross wage — and it is precisely this that must be budgeted for, not just the figure on the payslip.

Employment contract, agreements and employee entitlements

An employment contract must be in writing and contain at least the type of work, the place of work and the start date. A probationary period may be at most three months, six for managerial employees, and must be agreed in writing. An employee is entitled to at least four weeks of holiday a year, to statutory notice periods and, in defined cases, to severance pay; these entitlements are a minimum that can be improved, not reduced.

For a smaller volume of work, instead of an employment relationship you can use an agreement to perform work (up to 300 hours a year with one employer) or an agreement on working activity (on average up to half the weekly working time). Up to a set monthly income limit no contributions are paid on the agreements; above the limit they are. Agreements suit occasional work but do not give the same protection as an employment relationship.

What penalties apply

The most serious failing is illegal employment. For enabling illegal work an employer faces a penalty of up to CZK 10,000,000 (at least CZK 50,000), for failing reporting obligations towards the health insurer up to CZK 200,000, and further penalties for breaching labour-law rules. Inspections are carried out by the labour inspectorate and the social security administration. Proper and timely fulfilment of obligations is therefore always cheaper than the risk of a penalty.

Conclusion

The key figures for 2026 are the minimum wage of CZK 22,400, employer contributions of 33.8 % and registering an employee before they start. The cost of an employee is roughly a third higher than their gross wage. Where the line runs between an employee and cooperation with a sole trader is covered in the article employee vs contractor.

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