Things to pay attention to in 2023
We have prepared a summary for you of the tax and payroll changes coming into force in 2023. You have probably already heard about them or even had to deal with the changes in your business, but some of them may be new to you. Either way, it won’t hurt to go over them again.
As of 1 January 2023, the basic rate of the minimum monthly wage increased to CZK 17,300. For persons without taxable income (abbreviated as OBZP in Czech), this entails the obligation to pay monthly health insurance contribution of CZK 2,336.
Flat-rate meal allowance
The meal allowance is a cash contribution towards meals. It was originally introduced in the 2021 tax package and the contribution continues to apply in this form in 2023 as well. The highest optimal amount of the flat-rate meal allowance is now at CZK 107.10. This amount constitutes a fully tax-deductible expense for the employer and is tax-exempt for the employee; it is not included in the assessment base for social security and health insurance contributions. Any higher amount will be taxed as part of the employee’s normal salary, including for the purposes of health and social security contributions.
Changes to the agreement to perform work
On 1.1.2023, a new amount came into force with regard to calculating the taxable income earned on the basis of the employment contract known as the agreement to perform work (dohoda o pracovní činnosti). If the amount exceeds CZK 4,000 per calendar month, health insurance contributions must be paid.
Employer and employee insurance contributions in 2023
The insurance contribution rates for 2023 are determined by the Social Security Act as follows:
- for employers – 24.8% of the total assessment base of employees, consisting of 21.5% for pension insurance, 2.1% for sickness insurance and 1.2% for the state employment policy
- for employees – 6.5% of the assessment base
The total insurance contribution for employers and employees thus corresponds to 31.3% (24.8% + 6.5%) and is rounded up to whole Czech crowns.
In other cases, the insurance rates are as follows:
- 29.2% for self-employed persons
- 28.0% for persons with voluntary pension insurance
- 2.1% of the assessment base for foreign employees
As of 1 January 2023, employers are obliged to make a contribution to the state employment policy and must also pay higher insurance contributions for employees who are paramedics or members of the Fire Rescue Service.
Periodic and initial medical examinations
Periodic medical examinations have been changed as of 1 January 2023. Until the end of 2022, periodic examinations were mandatory for all job categories.
For category 1 and 2 jobs (“risk-free”), the periodic examination will now only be carried out at the request of the employer or the employee. Periodic examinations remain mandatory for jobs in categories 3 and 4.
The periodic health check-ups are meant to detect any change in the employee’s medical condition that could potentially lead to an inability to perform work in the given job category. The frequency of periodic examinations is determined by the decree on occupational medical services.
Rules for initial medical examinations remain in place; however, the Ministry of Health also plans to regulate these for non-hazardous professions in the future.