The Czech Republic has become a top destination for international hiring thanks to its EU membership, high English proficiency, and business-friendly infrastructure. But compliance is key. Czech labor laws are employee-centric, and regulations around contracts, notice periods, and leave entitlements are strictly enforced.

Employment contracts in the Czech Republic

Czech law requires all employees to receive a written employment contract before starting work. Contracts must include job title, start date, workplace, and salary. Fixed-term contracts may be renewed only twice within a three-year period. Missing or unclear contract terms can lead to legal issues or fines.

Probationary periods

Probationary periods are standard. Most employees receive up to three months, while managerial roles can extend it up to six months. During this time, the employment relationship can be ended with short notice.

Working hours and overtime

A standard workweek is 40 hours, with daily shifts capped at 8 hours. Overtime is allowed up to 150 hours annually unless a collective bargaining agreement allows more. Overtime pay is usually 125% of base salary.

How an EOR helps you hire in the Czech Republic

Velocity Global’s EOR solution streamlines compliant hiring in the Czech Republic by:

• Speeding up onboarding—hire talent in as little as 48 hours
• Avoiding the cost and complexity of opening a local entity
• Navigating legal and cultural nuances with in-country experts
• Offering competitive benefits that attract top candidates

Payroll is processed monthly, with wages paid by the 15th of the following month. Employers are responsible for providing payslips, deducting income tax, and submitting contributions for health insurance and social security.

Minimum wage and average salary

In 2025, the national minimum wage is CZK19,500 per month (Czech Ministry of Labor). The average gross monthly salary is around CZK44,000 (Czech Statistical Office).

Bonuses and incentive pay

Bonuses are not mandatory but are widely used, especially in competitive sectors such as finance and technology. Common examples include performance bonuses, annual bonuses, or a 13th-month salary.

How an EOR streamlines payroll

Velocity Global manages end-to-end payroll administration in the Czech Republic by:

• Ensuring accurate and timely salary payments in CZK
• Handling tax withholdings and employer contributions
• Providing payslips and annual tax documentation
• Staying compliant with evolving payroll regulations

Czech tax deadlines and contribution thresholds

Personal income up to CZK 1.6 million annually is taxed at a rate of 15%. Earnings above this are taxed at 23%. Employers must submit monthly tax filings and remit contributions on time. Annual tax returns are due by April 1 or July 1, depending on whether they are filed electronically by a tax advisor (Czech Tax Administration).

Healthcare and social contributions

The Czech Republic runs a universal healthcare system. Employers contribute 9% of an employee’s gross salary toward health insurance and 24.8% toward social security, which covers pensions, unemployment, and other state benefits.

Pensions

Pensions are part of the public system and funded through payroll taxes. While optional, many employers offer private pension plans to stay competitive in talent-heavy industries.

How an EOR supports tax compliance

Velocity Global simplifies tax management by:

• Registering supported employees with the tax authorities
• Filing monthly reports and paying taxes on time
• Ensuring accurate withholdings and documentation

Employee leave overview

Employees in the Czech Republic are entitled to a minimum of 20 days of paid annual leave. Many employers offer more to attract talent.

• Parental leave: Mothers receive 28 weeks of paid maternity leave. Fathers can take paternity leave and share parental leave up to the child’s third birthday.
• Sick leave: Employers pay sick leave from day four to day 14 at 60% of the employee’s average salary. The state takes over after day 14.
• Public holidays: There are 13 national holidays. If a holiday falls on a weekend, it is not observed on the following weekday.

How an EOR helps manage time off

Velocity Global enables companies to:

• Track and manage leave entitlements
• Adhere to legal requirements for sick and parental leave
• Factor in local holidays when scheduling and running payroll

Statutory benefits include:

• Health insurance
• Social security
• Paid time off

Common supplemental benefits include:

• Meal vouchers or allowances
• Multisport or wellness cards
• Private medical or dental coverage
• Life insurance

How an Employer of Record administers benefits

Velocity Global ensures:

• Legal compliance with statutory benefit mandates
• Seamless administration of supplemental benefits
• Tailored packages that align with employee expectations

Notice periods

• One month’s salary for <1 year of service
• Two months’ salary for 1–2 years
• Three months’ salary for more than two years

How an EOR helps manage terminations

Velocity Global ensures terminations in the Czech Republic are handled with care and in compliance:

• Accurate notice and severance calculations
• Final pay and benefits reconciliation
• Legal guidance during offboarding