Changes in payroll in 2019

Dear readers,
we are providing you with a simple and brief overview of changes and new developments in payroll effective in 2019.

1. Minimum wage increased

   • With effect from 1 January 2019, the minimum monthly wage has been increased from the current CZK 12,200 to CZK 13,350.
   • The basic hourly wage has been increased from CZK 73.20 to CZK 79.80 for work for 8 hours per day.

2. Minimum guaranteed wage increased

   • At the same time, the lowest levels of guaranteed wage have been increased by CZK 1,150 up to CZK 2,300 per month.
   • Guaranteed wage is classified into 8 levels by complexity, responsibility and difficulty of the work.

3. Assessment bases for social security increased

   • The maximum assessment basis for social security contributions has been increased from the original amount of CZK 1,438,992 in 2018 to CZK 1,569 552 in 2019.

4. Solidarity tax threshold increased

   • As a result of the increase in the maximum assessment basis for social security, the maximum monthly threshold for solidarity tax has also been increased.
   • Solidarity tax now applies to gross monthly earnings exceeding CZK 130,796.
5. Changes in tax base calculation for employees paying health insurance and social security in other EU Member States, the EEA or Switzerland
   • An amendment to the Income Taxes Act has resulted in a change affecting employees seconded to work in the Czech Republic who pay no social security or health insurance here but income tax advances. Their base for calculating income tax has been changed.
   • By the end of 2018, the tax base was fictitiously increased by social security and health insurance that would have been paid for the employee by the company in the Czech Republic. Under the new rules, the tax base will be increased to include social security and health insurance actually paid abroad.

6. ‘Waiting period’ abrogated

   • In late October last year, the Chamber of Deputies of the Czech Parliament adopted an amendment to the Labour Code abrogating the ‘waiting period’. This is a 3-day period for which an employee receives no wage or salary compensation during their temporary incapacity to work under S. 192 et seq. of the Labour Code.
   • The change is to come into effect on 1 July 2019 and must be adopted by the Senate and the President.

7. Taxpayer’s statement

   • The taxpayer’s statement may be filed in electronic form since 1 January 2018 already. For the electronic version, only template no. 26 must be used.
   • If your company uses hardcopy statements, template no. 25 may still be used, or alternatively template no. 26.
   • If your company uses the new template (no. 26), employees may request their annual income tax statements for 2018 as a separate form entitled ‘Žádost o roční zúčtování daně’ (Request for Annual Income Tax Statement).
   • When completing the statement form electronically, you can use Payminator – an application providing complete administration of employee requests for monthly tax credits and annual income tax statements (annual tax credits).
   • More information about the use of Payminator is available on our website HERE or you can contact us and will be pleased to introduce you to the application.

8. Changes in the limit for participation in sickness insurance

   • The amount relevant for the participation in employee sickness insurance has been increased from CZK 2,500 to CZK 3,000.
   • This is a new limit for ‘small-scale employment’. Social security will not have to be paid for employees with gross earnings below CZK 2,999 per month.

Do you want to make the administration of Taxpayer’s Statements easier? Are you interested to learn more about Payminator? Please e-mail us and we will be glad to demonstrate it to you in practice.