Employer of Record in Czech Republic

Brain Source International helps you save time and reduce costs by allowing you to hire in Czech Republic without establishing an entity. Our Employer of Record (EOR) solution handles onboarding, payroll, immigration, and benefits so you can hire your employees faster and grow your business compliantly.

What is an Employer of Record in Czech Republic?

An Employer of Record (EOR) in Czech Republic is a strategic partner that acts as the legal employer for your employees residing in Czech Republic. The EOR takes on all employment responsibilities and liabilities on your behalf, handling payroll, benefits, taxes, and regulatory compliance.

By partnering with an EOR, you can hire employees in Czech Republic without the need to establish a local entity or navigate complex labor laws.

Employer of Record (EOR) in Czech Republic: Key Aspects of the Czech Labour Code

General Information

• Currency: Czech Koruna (CZK)
• Payroll Frequency: Monthly
• Capital: Prague
• Fiscal Year: 1 January – 31 December

Minimum Wage

General: In the Czech Republic, the national minimum wage is set at 18,900 CZK per month. This amount represents the minimum legal salary an employee can earn before taxes and deductions, and it applies to full-time employment.

Payroll

Payroll Cycle: In the Czech Republic, the payroll cycle is generally monthly. Salary payments must be made on the same day each month and no later than the end of the following calendar month after the work has been performed. This ensures that employees are paid on a regular basis and within the legally required timeframe.

13th Salary

In the Czech Republic, there is no legal requirement to pay a 13th-month salary. However, many employers offer a 13th-month salary bonus, which is often performance-based or tied to company performance. This bonus is typically a discretionary benefit rather than a statutory obligation.

Taxation in Czech Republic

Would you like to know the approximate cost of employment in Czech Republic?

Working Hours

General: In the Czech Republic, the standard working week consists of 40 hours, typically spread across 8 hours per day. This includes a 9-hour workday when accounting for an unpaid lunch break.

Overtime: In the Czech Republic:

Overtime Limits: All work exceeding the standard 40-hour workweek is considered overtime and is governed by the employment contract or collective agreement. Employees can work a maximum of 8 additional hours per week and up to 150 hours per year as overtime.

Overtime Compensation Rates:

Excess Hours: Overtime hours worked beyond 40 hours per week are paid at 125% of the employee’s regular pay rate.

Night or Weekend Work: An additional 10% pay is required for night or weekend work.

Public Holidays: Work performed on public holidays is compensated at 200% of the regular pay rate or can be compensated with a compensatory day off.

These regulations ensure fair compensation for employees who work beyond their standard hours or during less desirable times.

Leave

Annual Leave (Vacation):

Leave Usage and Carryover: Employees should use their leave within the calendar year. However, it is possible to carry over unused leave into the next year. Carryover requests must be submitted in writing and shared with the employer in advance.

Private Sector: Full-time employees are entitled to 4 weeks (20 working days) of paid leave per year.

Public Sector and Specific Fields: Employees in the public sector, and certain other fields, are entitled to 5 weeks (25 days) of paid leave per year. Teachers receive 8 weeks (40 days) of paid leave per year. Additional leave entitlements may be specified in employment contracts or collective agreements.

Eligibility: Employees become eligible for leave after completing 60 days of service with a single employer. The employer has the right to approve or deny leave requests based on business needs.

Public Holidays

In the Czech Republic, public holidays that fall on weekends are typically not compensated with additional time off or carried over. They are generally considered lost days, meaning employees do not receive an extra day off or compensation if a public holiday occurs on a non-working day.

Sick Days

Sick Leave Reimbursement:

First 14 Days: Employers are responsible for reimbursing employees for their sickness during the first 14 days.

From the 15th Day: Sick pay is provided by the Government starting from the 15th day of sickness.

Sick Pay Rates:

First 30 Days: 60% of the employee’s average pay (inclusive of the days covered by the employer).

31st to 60th Day: 66% of the average pay.

From the 61st Day Onwards: 72% of the average pay.

Sick Leave Duration: Employees are eligible for up to 380 calendar days of sick leave.

Employer Responsibilities:

Sickness Certificates: Employers must collect sickness certificates from employees.

Record Maintenance: Maintain records related to sick leave.

Reporting: Make all required submissions and reports to the Social Security authorities.

These regulations ensure that employees receive financial support during illness while outlining the responsibilities of employers in managing and reporting sick leave.

Maternity Leave

Maternity Leave:

Duration: A woman is entitled to 28 weeks of maternity leave. For multiple births, the leave extends to 37 weeks.

Minimum Leave: The employee must take at least 14 weeks of leave.

Start Date: Maternity leave can begin at least 8 weeks before the expected due date but no later than 6 weeks before the due date.

Maternity Payment:

Rate: Maternity payment is calculated at 70% of the regular salary.

Payment Source: Paid by Social Security.

Eligibility: The payment amount depends on the employee having worked at least 270 days in the last 24 months and the amount of contributions made to Social Security.

Job Protection:

Duration: Mothers receive job protection from the start of pregnancy until one year after the end of maternity leave.

These provisions ensure financial support during maternity leave and protect job security for new mothers.

Paternity Leave

Paternity Leave:

Duration: New fathers (or those who have taken a child under the age of seven into their care) are eligible for 2 weeks of paternal post-natal care benefit.

Payment Rate: This leave is paid at 70% of the employee’s regular salary.

Timing: Paternity leave must begin within six weeks after the birth of the child and must be taken in one continuous block.

Eligibility: To qualify, the employee must have made Social Security contributions for at least 270 days in the two years prior.

Transfer of Maternity Leave:

Eligibility: After the child reaches seven weeks of age, the mother can choose to transfer a portion of her maternity leave to the father.

Parental Pay: The father will receive parental pay during this transferred leave.

Job Protection:

Termination: Employees cannot be terminated during paternity leave.

These provisions ensure financial support and job security for fathers taking paternity leave and allow for shared parental responsibilities.

Parental Leave

Parental Leave:

Duration: Parents are entitled to take parental leave until the child turns three years old. With employer agreement, this can be extended to four years.

Allowance: Parents receive a joint parental allowance for the entire period of the leave, regardless of how long the leave is taken.

This policy allows flexibility for parents in managing their leave while providing financial support during the early years of the child’s life.

Other Leave

In the Czech Republic, depending on the collective agreement or employment contract, employees may be entitled to additional types of leave, including:

Care Leave:

Standard: Employees can take up to 9 days of care leave for caring for a child under 10 years old or a sick family member. This leave is paid by Social Security at 60% of the employee’s gross salary.

Single Parents: Single parents caring for a child can access extended paid leave of up to 16 days until the child reaches 16 years old.

Long-Term Care Leave:

Eligibility: If a family member living in the same household spends at least 7 days in the hospital and requires care for 30 days or more, employees can take long-term attendance leave. This requires written consent from the person being cared for.

Duration and Payment: Leave can be up to 90 calendar days, with Social Security paying 60% of the employee’s gross salary.

Wedding Leave:

Duration: Employees are entitled to 2 days of leave for their wedding, with one day paid.

Bereavement Leave:

Duration: Employees are entitled to up to 3 days of paid leave in the event of the death of an immediate family member.

Jury Duty:

Leave: Employers must provide unpaid leave for employees who serve as jurors, witnesses, or are involved in court cases. Employees must provide a copy of the jury summons to the employer.

Military Leave:

Purpose: Employees are entitled to leave for compulsory military service, substitute military service, military exercises, or other military-related duties, including civilian service.

These provisions ensure that employees have access to various types of leave for personal and family needs, as well as obligations related to military service and court duties.

Key Services and Benefits

1. Legal Compliance:
   • Employment Contracts: Ensures that employment contracts comply with Czech labor laws.
   • Regulatory Compliance: Manages compliance with local regulations regarding employment, including taxes and social security contributions.
2. Payroll Management:
   • Salary Processing: Handles payroll, ensuring accurate and timely salary payments to employees.
   • Tax Withholding: Manages deductions for income tax and social security contributions.
3. Benefits Administration:
   • Health Insurance and Other Benefits: Administers statutory benefits such as health insurance and other employee benefits required by Czech law.
4. Recruitment and Onboarding:
   • Hiring: Assists in recruiting and onboarding employees, including handling all necessary legal documentation.
   • Integration: Ensures that new hires are properly integrated into the organization and compliant with company policies.
5. Risk Mitigation:
   • Legal Risks: Reduces risks associated with non-compliance with local labor laws and employment regulations.
   • Dispute Management: Handles potential employment disputes in accordance with Czech labor laws.
6. Local Expertise:
   • Knowledge of Local Market: Provides insights into local employment practices and market conditions.
   • Support: Offers support in navigating the Czech employment landscape.

How It Works

1. Partnership: Your company partners with Brain Source International to manage employment-related administrative tasks in the Czech Republic.
2. Employment: Brain Source International becomes the legal employer of record for the employees, managing all aspects of employment including contracts, payroll, and compliance.
3. Day-to-Day Operations: Your company manages the employees’ daily tasks and responsibilities while Brain Source International handles administrative and legal aspects.

Advantages

• Quick Market Entry: Allows companies to quickly enter the Czech market and hire local talent without the need to establish a local entity.
• Compliance Assurance: Ensures adherence to local employment laws and regulations, minimizing legal risks.
• Focus on Core Business: Enables companies to focus on their core activities while outsourcing employment administration tasks.

Using Brain Source International as an EOR in the Czech Republic can simplify the hiring process, ensure compliance with local regulations, and provide valuable local expertise, making it easier for companies to manage their workforce in the region.