Employee Leasing in the Czech Republic

• Employee leasing in the Czech Republic helps companies reduce their costs, as it allows them to expand their activity into the Czech market without setting up a local company and paying all the related expenses.
• Companies that choose employee leasing can enter the Czech market in record time and enjoy great flexibility while testing their business potential in the country, allowing them to exit the market at minimal costs if needed.
• Employee leasing helps businesses focus on their development strategy and market growth, while FMC Group covers administrative and regulatory procedures relating to their expansion.

• Choosing candidates based on the client’s conditions;
• Recruiting the best candidates after getting the client’s approval;
• Negotiating employment contract to guarantee the client’s best interests;
• Paying salaries and managing the payroll according to international standards;
• Paying taxes and social contributions according to the local law;
• Paying other expenses and allowances after getting the client’s approval;
• Monitoring paid leaves and other employee benefits according to the employment contract;
• Implementing employee insurance at the best rates if requested;
• Maintaining regular communication with the client about their employees.

• The Czech market is one of the most stable and prosperous in Central and Eastern Europe. The country’s GDP growth has been averaging more than 3.0% over the last three years before the COVID-19 pandemic and the GDP per capita reached over EUR 21,586 in 2020, exceeding neighboring countries such as Slovakia, Poland, and Hungary.
• As an EU member, the Czech Republic benefits from a wide range of preferential trade agreements.
• The Czech Republic has a high-quality infrastructure and enjoys great geographical and cultural proximity to Western Europe, more than any other Central and Eastern European country. The country has direct highway connections to Germany, Poland, and Slovakia. It also has one of the densest railway networks in Europe. Additionally, the Czech telecommunication infrastructure offers reliable and stable high-speed internet across the entire country.
• The Czech Republic has a world-renowned business environment. The country ranked 41^st in the 2020 Doing Business rankings and 49^th in the 2021 Transparency International Corruption Perceptions Index.
• The Czech Republic is one of the most politically and economically stable countries in Central and Eastern Europe. Local legislative texts are compliant with EU standards, notably in terms of commercial, accounting, and bankruptcy laws. Moreover, the country has some of the best investment risk ratings in the region – “Aa3” according to Moody’s, “AA-” according to Standard & Poor’s, and “AA-” according to Fitch Ratings.
• You can visit Czech Investment and Business Development Agency to read more about Czech Republic’s investment advantages.

Minimum Wage and Payroll

• The national minimum wage in the Czech Republic is set at CZK 16,200 (~EUR 658) per month.
• Salaries in the Czech Republic are paid monthly and they have to be paid on the same day each month.
• The 13th-month bonus salary is not legally required in the Czech Republic and is usually given based on the performance of employees.

Social Contributions and Taxes

Employer Contributions
Social Security and Pension	24.8%
Health Insurance	9.0%
Sickness Insurance	2.1%
Unemployment Insurance	1.2%
Total	33.8%
Employee Contributions
Social Security and Pension	6.5%
Health Insurance	4.5%
Total	11.0%
Employee Income Tax
Up to CZK 1,867,728 (~EUR 76,000) per year	15.0%
More than CZK 1,867,728	23.0%

 

Working Hours and Overtime

• The legal working hours limit in the Czech Republic is set at 40 hours per week and nine hours per day.
• Overtime work is paid at a rate of 25% higher than the regular pay rate.
• Overtime work cannot exceed eight hours per week and 150 hours per year.

Vacation Days

• Employees in the Czech Republic are entitled to 20 days of paid leave per year. However, it is very common for employers to give their employees 25 days of paid vacation.
• Employees become eligible for their annual paid leave after 60 days of service.
• The Czech Republic celebrates 14 public holidays:
  • New Year’s Day and Restoration of the Czech Independence Day: January 1^st
  • Good Friday: Between late March and late April
  • Easter Monday: Between late March and late April
  • Labor Day: May 1^st
  • Liberation Day and Mother’s Day: May 8^th
  • Saint Cyril and Methodius Day: July 5^th
  • Jan Hus Day: July 6^th
  • Day of Memory: August 21^st
  • Saint Wenceslas Day: September 28^th
  • Independent Czechoslovak State Day: October 28^th
  • Struggle for Freedom and Democracy Day: November 17^th
  • Christmas Holiday: December 24^th to December 26^th

Parental Leave and Sick Leave

• Expecting mothers can take up to 28 weeks of maternity leave or 37 weeks for multiple births. The minimum paid maternity leave is set at 14 weeks. The leave can begin eight weeks before delivery. The salary during the maternity leave is calculated at 70% of the regular wage and it is covered by Social Security.
• Fathers can take one week of paid paternity leave within the first six weeks after the birth of their child. Employees are paid 70% of their salary during paternity leave, covered by Social Security.
• Parental leave can be granted, upon request, to a mother or father after the end of maternity leave until their child becomes four years old. Employers do not have to pay their employees for the days they take as part of the parental leave. The Czech Labor Office provides a parental allowance of CZK 300,000 (~EUR 12,190) for a single birth or CZK 450,000 (~EUR 18,290) for multiple births to cover leaves for the entire duration.
• Employers have to pay their employees at a rate of 60% of their regular salary during the first 14 days of sickness. Afterward, the employees receive sick pay from Social Security. The sick leave cannot exceed 380 days.

Other Types of Paid Leave

• When an employee loses an immediate family member, they can take up to three days of paid leave.
• Employees can take up to nine days of paid leave per year to care for a child under the age of 10 or a sick family member, provided they present proof to their employer.

Notice Period

• Employees wishing to leave their job have to respect a notice period of at least two months.
• The notice period in the Czech Republic is calculated from the first day of the month following the delivery of the notice.