Guide to employment, payroll and benefits in

Czechia

Rivermate offers complete payroll, benefits and compliance services for

Czechia

01. Overview

Last updated: 

August 19, 2021

Currency
Czech Koruna
Capital
Prague
Ease of doing business
Language
Czech
Population
10708981
GDP growth

02. Grow your team in

Czechia

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Czechia

, particularly if you don't have established local relationships. You can hire employees in

Czechia

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Czechia is a short-form name for the Czech Republic, which is a landlocked nation in Central Europe. It is bordered on the south by Austria, on the west by Germany, on the northeast by Poland, and on the east by Slovakia. The Czech Republic has a hilly landscape with a predominantly temperate continental climate and an oceanic climate that occupies an area of 78,866 square kilometers. It is a representative republic with a unitary government. In 1002, the Duchy of Bohemia, ruled by Great Moravia, was officially recognised as an Imperial State of the Holy Roman Empire, and in 1198, it was elevated to a kingdom. Following the Battle of Mohács in 1526, the Habsburg Monarchy eventually absorbed the whole Crown of Bohemia. The Thirty Years' War began with the Protestant Bohemian Revolt. The Habsburgs solidified their rule after the Battle of the White Mountain. The Crown lands became part of the Austrian Empire after the Holy Empire was disbanded in 1806. Following the fall of Austria-Hungary after World War I, the Czech lands became more developed in the 19th century, and much of them became part of the First Czechoslovak Republic in 1918. Following the Munich Agreement in 1938, Nazi Germany systematically took control of the Czech lands. Following a coup d'état in 1948, Czechoslovakia was restored in 1945 and became an Eastern Bloc communist state. The Velvet Revolution ended communist rule in the country in November 1989, and Czechoslovakia dissolved on January 1, 1993, with its constituent states becoming the Czech Republic and Slovakia. The Czech Republic is a developing nation with a social market economy that is advanced and high-income. It is a welfare state based on the European social model, with universal health care and free university education. It is ranked 12th in the UN's inequality-adjusted human development index and 14th in the World Bank's Human Capital Index, ahead of the US, the UK, and France. It is the 11th safest and most stable nation in the world, and the 31st in terms of democratic governance. NATO, the EU, the OECD, the OSCE, and the Council of Europe are also members of the Czech Republic.

04. Public holidays

05. Types of leave

Paid time off

Public holidays

Sick days

Maternity leave

Paternity leave

Parental leave

Other leave

06. Employment termination

Termination process

Employers and employees can mutually agree to end employment. Both sides must agree on a termination date, and the employer must offer a written justification. Employers may terminate employment by providing written notice that includes a cause for the termination. Without a documented justification, the termination is void. Employees may immediately end their job if they present documented justifications. Employers have the option of terminating employment when temporary work or a project is done.

Notice period

A minimum of two months' notice is necessary.

Severance pay

When an employee is terminated for "organizational reasons," the following levels of severance pay are applicable: If the employer-employee relationship lasted shorter than a year, one month's earnings; 2 months' income if the employer-employee connection lasted at least one year but not more than two years; 3 months' salary if the employer-employee relationship lasted at least two years.

Probation period

The probation period is three months.

07. Working hours

General

A 40-hour work week, or eight hours per day, is considered full-time. A shift cannot exceed 12 hours in duration.

Overtime

Overtime work is permitted only in exceptional circumstances and cannot exceed 150 hours in a calendar year. Overtime is paid at 125 percent of the standard rate and is limited to eight hours per week or 150 hours per year.


If the employee and employer agree on work beyond regular hours, overtime cannot exceed 8 hours per week for a period of more than 26 consecutive weeks. If a collective bargaining agreement exists, overtime may be increased.


The maximum amount of overtime that can be negotiated for managerial positions is 150 hours per year.


Overtime is paid at a rate of 125 percent of the regular rate. Additionally, additional time off can be substituted for overtime pay. Employees are entitled to their wages plus time off for work performed during holidays. Overtime pay is 110 percent of regular wages for weekend work. Nightshift shifts cannot exceed 8 hours in a 24-hour period, and pay is 110 percent of regular wages.

08. Minimum wage

General

In January 2021, the Czech Republic's compensation laws were amended to increase the minimum wage to CZK 15,200 per month. These laws, however, may vary according to the terms of the collective bargaining agreement.

09. Employee benefits

General

Employers are required to contribute 9% of each employee's income to the state's health insurance funds. There is no upper limit on the pay basis for health insurance purposes.

Employers occasionally offer private health insurance, although the Czech healthcare system is often regarded as providing high-quality treatment. Employers in the Czech Republic also frequently provide meal coupons.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Czechia

to hire a team takes time, money, and effort. The labor law in

Czechia

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Czechia

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Czechia

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Czechia

via our Employer of Record / PEO solution.

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