Employer of Record in The Czech Republic

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in The Czech Republic if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in The Czech Republic below, to avoid any compliance issues.

Employment Contract Requirements

The legal structure in the Czech Republic requires both employers and employees to enter into a written employment agreement when hiring. This agreement must, at a minimum, encompass the following fundamental details:

• Identification of both parties
• Date of commencement (and employment duration for temporary contracts)
• Workplace
• Job type, duties and responsibilities
• Basic salary as well as other compensation or benefits and detailed payment information
• Working hours
• Notice periods for employment termination
• Reference to collective agreements
• Health and safety measures at the workplace and company rules

Onboarding Process

We can help you get a new employee started in The Czech Republic quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

It is also worth noting  that pre-employment medical checks are required before an employee starts, but remote employees are generally exempt unless their role involves specific health risks.

Working Hours in The Czech Republic

The Czech Republic adheres to a standard workweek of 40 hours, which translates to eight hours per day.

Overtime in The Czech Republic

Overtime work is permissible but subject to restrictions, allowing a maximum of eight hours per week and 150 hours per year. For each overtime hour worked, employees must be compensated with an additional 25% of their standard hourly wage.

Probation Period in The Czech Republic

Probation periods in the Czech Republic are set at three months for non-managerial employees and six months for managerial employees. It's important to note that these probationary periods are fixed and cannot be extended beyond the initially stipulated duration

In the Czech Republic, also known as Czechia, you should treat overtime as a controlled exception, use written orders where required, and track total hours to stay within annual limits. In 2026, inspections focus on overtime caps, correct premium pay, and whether rest periods are preserved under shift systems.

• Standard Working Hours: 40 hours per week, with reduced limits for certain shift patterns.
• Overtime Thresholds: Overtime is capped at 150 hours per year by order, with additional overtime possible only by agreement within statutory limits.
• Overtime Pay Rates: Overtime premium is at least +25% unless compensated with time off.
• Daily And Weekly Rest Requirements: Daily rest is at least 11 hours and weekly rest is at least 35 hours.
• Night Work Restrictions: Night work is regulated and subject to additional limits and health safeguards.
• Penalties For Non–Compliance: Exposure includes labour inspection fines and back pay for unpaid premiums.

Employment laws in The Czech Republic can be intricate, and even unintentional mistakes in contracts, benefits, or termination processes can carry legal and reputational consequences. With an Employer of Record, you gain a local partner that ensures every hire is compliant. The EOR takes care of drafting compliant contracts, processing accurate payroll, managing contributions to statutory benefits, and handling lawful terminations if needed, all according to local employment standards.

This level of protection is especially valuable when expanding into new or unfamiliar regions. Instead of using time and resources to build in-house legal knowledge, you gain immediate access to local expertise. The EOR keeps you ahead of regulatory updates and shields your company from potential compliance gaps, so you can confidently hire and manage employees while minimizing risk. For hiring managers and founders, it's the difference between hiring with uncertainty and building your team on a legally sound foundation.

Fiscal Year in The Czech Republic

1 January - 31 December is the 12-month accounting period that businesses in The Czech Republic use for financial and tax reporting purposes.

Payroll Cycle in The Czech Republic

The payroll cycle in The Czech Republic is usually monthly, with employees being paid on the same day of each month as stipulated in contract.

Minimum Wage in The Czech Republic

As of January 1, 2025, the Czech Republic's minimum wage rates are as follows:

• Monthly Minimum Wage: CZK 20,800
• Hourly Minimum Wage: CZK 124.40

The Czech Republic's minimum wage is determined using a formula based on the average monthly gross earnings across the national economy. For 2025, the government applied a coefficient of 42.2% to the predicted average wage of CZK 49,233, resulting in the minimum wage of CZK 20,800 per month. This approach aims to align the minimum wage with the overall economic development and average wage trends.

Bonus Payments in The Czech Republic

In the Czech Republic, there is no legal obligation to provide a 13th-month salary. Nonetheless, numerous employers choose to offer a 13th-month salary bonus, often tied to performance metrics.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 33.8% on top of the employee salary in The Czech Republic.

Employee Payroll Tax Contributions

In The Czech Republic , the typical estimation for employee payroll contributions cost is around 11%.

Individual Income Tax Contributions

Czech employees are subject to an individual income tax, calculated at 15% of their gross salary up to 1,676,052 CZK and 23% for the portion of the gross salary exceeding this threshold.

Pension in The Czech Republic

Participation in pension insurance (důchodové pojištění­) is mandatory in the Czech Republic.

When you’re scaling quickly, setting up local payroll systems in each new country slows you down. In The Czech Republic, the administrative load can include government registration, benefits management, and accurate, on-time payment delivery. An EOR gives you a plug-and-play solution that handles all of this while your internal team stays focused on growth, not red tape.

Key Ways an EOR Supports Payroll in The Czech Republic:

• Rapid Payroll Setup: Onboards employees quickly with ready-to-go infrastructure.
• End Administration: Handles salary, tax, and benefits with no extra internal resources.
• Vendor Simplicity: Consolidates payroll across countries for centralized oversight.
• No Entity Required: Operates legally, saving your business the time and resources needed for local incorporation.

The Czech Republic requires most non-EU/EEA and non-Swiss nationals to obtain both a residence permit and a work authorization before starting employment. The most common routes are the Employee Card (zaměstnanecká karta) for long-term employment, the Blue Card (modrá karta) for highly skilled workers, and the Intra-Company Transfer Card (karta vnitropodnikově převedeného zaměstnance) for group transfers. Short-term Schengen visas may allow limited business activities but do not usually permit productive work.

In practice, your company sponsors the role and provides supporting documentation, while the employee applies for the relevant visa or residence permit at a Czech embassy or at the Ministry of the Interior, depending on their situation. Authorities will assess the job posting on the central Labour Office portal, local labor market conditions, salary and qualification levels, and the completeness of the file before issuing a decision.

Mandatory Leave Entitlement in The Czech Republic

The annual leave entitlement in The Czech Republic is 20 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In The Czech Republic

There are 13 national holidays in the Czech Republic:

Paid Time Off in The Czech Republic

Employees in the private sector are entitled to a minimum of four weeks of paid annual leave each year.

Maternity Leave In The Czech Republic

In the Czech Republic, employed women with at least 12 consecutive months of work before childbirth can access up to 28 weeks (seven months) of paid maternity leave. Additional details include:

• The leave can be taken within six weeks before the expected due date and eight weeks after delivery.
• Maternity leave, funded by the state, equals 70% of the employee's average gross salary, calculated from the preceding year.
• In the event that the mother gives birth to two or more children simultaneously, she is eligible for maternity leave for a duration of 37 weeks.

Paternity Leave In The Czech Republic

Fathers are eligible for 14 days of paid paternity leave within the first 6 weeks after the birth of their child. Paternity leave is compensated by the state at 70% of the father's regular salary, up to a maximum contribution of 8,575 CZK.

Sick Leave In The Czech Republic

In the Czech Republic, employees are eligible for sickness benefits for up to a maximum of 380 calendar days., with the following applicable details:

• During the initial 14 calendar days of illness, the employer covers the payment
• From the 15th day onward, Social Security benefits take over the coverage.
• Sick pay is 60% of the employee's average wage in the Czech Republic.

Parental Leave In The Czech Republic

Parental leave can be taken by parents until their child turns 3 years old.

Care Leave

Employees are eligible for up to nine days of paid care leave to attend to a sick family member or provide care for a child under 10. Social Security reimburses this leave at 60% of the employee's gross salary for up to nine days.

Wedding Leave

Employees receive two days of leave for their wedding, one of which is compensated.

Bereavement Leave

In the event of the death of an immediate family member, an employee can take up to three days of paid bereavement leave.

Jury Duty

Employers are mandated to provide full-time employees with unpaid leave to fulfill their responsibilities as jurors, witnesses, plaintiffs, or defendants in court proceedings.

Employee benefits in The Czech Republic combine robust state-backed protections with employer-designed perks. Your company will work within a highly regulated framework that sets minimum standards for time off, social insurance, health and safety, and family support, while leaving room to differentiate through supplemental benefits such as meal vouchers, bonuses, and flexible working.

When you build a benefits package for employees in The Czech Republic, you need to understand how mandatory social security and leave entitlements drive your total employment cost, and how tax rules shape the design of fringe benefits. Partnering with a local payroll or employer-of-record provider will help you stay compliant while using benefits strategically to attract and retain talent.

• Top mandatory benefits include paid annual leave, public holidays, sickness benefits via social insurance, maternity and parental benefits, and participation in the public health and social security systems.
• Other key mandatory protections include occupational injury and disease coverage and minimum rest periods and working time protections that effectively function as benefits.
• Top supplemental benefits include meal vouchers or meal allowances, performance-related bonuses, additional paid days off, private medical or life insurance, and pension contributions above the statutory level.
• Key legal and tax considerations include correct classification of employees vs contractors, accurate calculation and remittance of social security and health insurance, proper documentation of any tax-advantaged benefits, and adherence to the Czech Labour Code and related social insurance regulations.

For startups and small teams, managing global employee benefits isn’t just complex, it’s a full-time job. In The Czech Republic, understanding what benefits are required, how to deliver them, and how to stay compliant can be overwhelming, especially without local HR expertise. An Employer of Record removes that pressure by taking complete ownership of benefits administration, so you don't have to become an expert in local employment law.

Whether it’s healthcare contributions, pension enrollment, or statutory leave, the EOR ensures everything is delivered accurately and on time. They navigate any country-specific nuances, keep up with legal changes, and ensure each benefit is properly tracked and documented. For founders, that means fewer distractions and more time to focus on growth. Your employees get the security and support they expect from a local employer, and you get to scale your team in The Czech Republic without building complex infrastructure or worrying about compliance missteps.

Termination Process in The Czech Republic

In Czech Republic, termination must be put in writing if the employer initiates the termination with the minimum notice period. In the case of indefinite-term contracts, the employer must provide a clear explanation for ending the employment. Employment may only be terminated for one of the following reasons:

• Organisational reasons
• Health reasons (where the employee can no longer carry out their present work due to loss of medical capacity)
• Employee no longer meets the requirements outlined for the work
• Gross breach of duty
• Convicted of a crime
• The employee has seriously, or less seriously but repeatedly, breached their duties relating to their work performance

Notice Period in The Czech Republic

In the Czech Republic, the notice period for both dismissals and resignations must be at least two months.

Severance in The Czech Republic

Severance pay is dependent on the employees length of service as specified below, and is only applicable in instances where contracts are terminated due to redundancy:

• 1 year of employment: 1 months gross salary
• 2 years of employment: 2 months gross salary
• 3+ years of employment: 3 months gross salary