Employer of Record (EOR) in Czech Republic

Czech Republic
Rivermate's Employer of Record solution helps companies hire remote employees in
Czech Republic
. We take care of global payroll, taxes, benefits, compliance and HR activities. So you can focus on growing your business.

Our Employer of Record solution is beneficial to companies that want to hire remote employees in a breeze. On this page you will be find employment information for
Czech Republic
.
Employer of Record people
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Currency
Czech Koruna
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Capital
Prague
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Region
Europe
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Language
Czech
Hire remote employees
Population
10708981
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GDP
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GDP growth
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World GDP share

1. Grow your team in Czech Republic with Rivermate as your Employer of Record (EOR) / PEO

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

Czech Republic

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

Czech Republic

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

2. Summary

Czechia, or the Czech Republic, is a landlocked nation in Central Europe. It is bounded to the south by Austria, to the west by Germany, to the northeast by Poland, and to the southeast by Slovakia. The Czech Republic has a hilly environment with a largely moderate continental and oceanic climate, covering an area of 78,871 square kilometers (30,452 square miles). Prague is the capital and biggest city; other significant cities and urban regions include Brno, Ostrava, Plze, and Liberec.

Under Great Moravia, the Duchy of Bohemia was established in the late ninth century. In 1002, it was legally acknowledged as an Imperial State of the Holy Roman Empire, and in 1198, it became a monarchy. The whole Crown of Bohemia was progressively absorbed into the Habsburg Empire after the Battle of Moh√°cs in 1526. The Thirty Years' War was precipitated by the Protestant Bohemian Revolt. The Habsburgs cemented their authority after the Battle of White Mountain. When the Holy Empire was dissolved in 1806, the Crown lands became part of the Austrian Empire.

The Czech lands grew increasingly industrialized in the nineteenth century, and with the fall of Austria-Hungary during World War I, the majority of them became part of the First Czechoslovak Republic in 1918. Throughout the interwar era, Czechoslovakia was the only nation in Central and Eastern Europe to maintain a parliamentary democracy. Following the Munich Agreement in 1938, Nazi Germany gradually assumed control of the Czech territories. Czechoslovakia was regained in 1945 and, after a coup in 1948, became an Eastern Bloc communist state. Attempts at government and economic liberalization were thwarted by a Soviet-led invasion of the nation during the Prague Spring in 1968. The Velvet Revolution ended communist control in the nation in November 1989, and Czechoslovakia was dissolved on January 1, 1993, with its component republics becoming the separate states of the Czech Republic and Slovakia.

The Czech Republic is a developed nation with a unitary parliamentary republic and a high-income social market economy. It is a welfare state that follows the European social model and provides universal health care and tuition-free higher education. It is ranked 12th in the UN Human Development Index in terms of inequality, and 24th in the World Bank Human Capital Index. It is ranked ninth in terms of safety and peace, and 31st in terms of democratic administration. The Czech Republic belongs to NATO, the European Union, the OECD, the OSCE, and the Council of Europe.

3. Public holidays

4. Types of leave

There is no information about the types of leave for this country.

Paid time off

Employees are entitled to four weeks of paid vacation (20 days). To obtain this allotment, the employee must work for the same company for at least 60 days without interruption.

Public holidays

Czech Republic recognizes 13 public holidays.

Sick days

During the first 14 days of sickness, the employee is entitled to 60% of their daily pay, as long as the employee meets the eligibility requirements.

Maternity leave

A mother is entitled to 28 weeks of maternity leave in the Czech Republic, or 37 weeks if she has several children. The leave must begin at least 8 weeks before the expected due date and end no less than 6 weeks before the expected due date. Maternity leave is paid at 70% of the daily wage, but the balance is determined by the amount of social security contributions made by the employee. In addition, you must take at least 14 weeks of maternity leave.

Paternity leave

During the first 14 days of sickness, the employee is entitled to 60% of their daily pay, as long as the employee meets the eligibility requirements.

Parental leave

The mother is entitled to parental leave until her maternity leave ends, and the father is entitled to leave from the birth of the infant before the child hits the age of three. This leave is only available while the infant is cared for at home.

Parents are entitled to a cumulative payment of 220,000 CZK before their child is four years old, or 330,000 CZK if they have several children.

Other leave

5. Employment termination

There is no information about employment information for this country.

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.

Probation period

The probation period is three months.

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.

6. Working hours

There is no information about the working hours for this country.

General working schedule

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.

7. Minimum wage

There is no information about the working hours for this country.

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.

8. Employee benefits

There is no information about the working hours for this country.

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.

9. Taxes

There is no information about the working hours for this country.

Corporate tax

Legal entities based in the Czech Republic must pay corporate income tax on their global earnings. Foreign corporations are solely taxed on revenue earned in the Czech Republic. The typical corporation tax rate is 19%. Investment funds are taxed at a special rate of 5%, whereas pension funds are taxed at 0%. Dividend income received by Czech tax resident entities from non-resident companies is taxed at a rate of 15%.

Every business taxpayer has the option of taking straight-lined or accelerated depreciation on tangible assets. Depending on the depreciation category, the depreciation time ranges from three to fifty years.

Individual income tax

Individuals considered to be tax residents in the Czech Republic pay a flat personal income tax rate of 15% on gross income, and there is a solidarity surcharge of 7% on yearly incomes exceeding 48 times the average monthly salary within the calendar year. Non-tax residents are solely taxed on income earned in the Czech Republic. Employment income, entrepreneurial income, capital (interest, dividends, etc.), rent, and other kinds of income are all taxable.

VAT, GST and sales tax

VAT is levied on the sale of products, the supply of services, and imports, exactly as it is in the rest of the EU. In the Czech Republic, there are three VAT rates, with the normal rate being 21%. This rate is applied to all products and services that are not on a specific list of reduced-tax items.

The first lowered rate is 15%. Groceries and non-alcoholic drinks, plants and animals, music notes, books, and certain medicines are examples of items subject to a 15% tax.

The second discounted rate is 10%. This tax applies to items such as infant food and radiopharmaceuticals. In most cases, the standard rate is applied to imported products. The exception is when the worth of the products is less than 22 EUR, in which case it is free from tax.

10. VISA and work permits

There is no information about the working hours for this country.

Business travellers to the Czech Republic often utilize a local variant of the Schengen C Visa, which foreign citizens must acquire before to arrival in the Czech Republic unless their nationality qualifies them for visa exemption. The Schengen Area restricts stays to 90 days in any 180-day period, calculated cumulatively throughout the Schengen Area.

The Employee Card, a combined work and residency permit for highly trained local workers, is the most common kind of work authorisation. It must be paired with a separate work permit for intracompany transfers, assignments, and secondments. The Employee Card is valid for two years and is renewed.

11. Employer Of Record service terms

There is no information about the working hours for this country.

Employment contracts

In the Czech Republic, it is legally obligatory to have a solid, documented employment contract in place. A job description, start date, location, mandatory notice periods, pay and compensation information, collective bargaining information, and information concerning probationary periods, if applicable, should all be included in the contract. A trial period must be written in writing and agreed upon prior to the employee's start date for it to be legitimate. In the Czech Republic, an offer letter and job contract should always mention the salary and any compensation amounts in Czech koruna rather than a foreign currency.

Minimum assignment length

Employment contracts must be in writing and include an employment agreement. Employers have the option of hiring staff on a full-time basis. Contracts for part-time labor must define the hours to be performed. Fixed-term contracts are limited to three years and may only be renewed twice. Seasonal and casual job contracts are for a limited time period.

In the Czech Republic, employment contracts are often completed for an infinite period of time. Fixed-term contracts are permitted, although they cannot last more than three years.

Payment currency

Czech Koruna (CZK)

Euro (EUR)

United States Dollar (USD)

13.Opening a subsidiary in Czech Republic

There is no information about the working hours for this country.

How to set up a subsidiary

Setting up a Czech Republic subsidiary is not an easy operation, but you can make it easier by taking crucial elements into account before you begin. Different localities, such as individual cities or regions, may have their own subsidiary laws in the Czech Republic. Choosing the correct location will make incorporation simpler and may result in lower prices and availability. Before deciding on a physical office space, you should always do research or talk with a professional who can offer a suitable site to integrate.

You may establish your Czech Republic subsidiary as a limited liability company (LLC), a joint-stock company, a free zone business, a branch office, or a representative office. The most typical form is an LLC, which gives you greater flexibility to operate in the Czech Republic as well as advantageous tax rules.

The following are the stages to forming an LLC:

(1) Keeping consistent records for all directors

(2) Before registering with the Trade Licensing Office, notarize statutory declarations and partnership articles.

(3) Obtaining a Commercial Register in order to validate registration

(4) Creating an account with the Social Security Administration and the Revenue Authority

(5) Opening bank accounts in the nation

(6) Paid-up share capital is deposited.

Subsidiary laws

Czech Republic subsidiary rules differ depending on area and company. A single owner may form an LLC with a share capital of 1 EUR. You may nominate just one director, who can be either a human or a business. The director is not required to reside in the Czech Republic in order to comply with the country's subsidiary legislation.

Each year, as an LLC, you must submit financial statements with the tax authorities. You'll need an external audit every year if you fulfill two of the following criteria:

(1) Annual balance sheet in excess of 1.5 million EUR

(2) More than 3 million EUR in annual revenue

(3) There are more than 50 workers.

13. Why choose Rivermate as your Employer of Record / PEO in Czech Republic

Establishing an entity in

Czech Republic

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

Czech Republic

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

Czech Republic

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

Czech Republic

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

Czech Republic

via our Employer of Record / PEO solution.

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