Top eight tax news items for employers and employees in 2018
The maximum assessment base for social insurance and the minimum wage will increase, which will affect the amount of some other mandatory payments and tax credits. Employees will also be allowed to complete their statements of payroll tax electronically. Paternity leave will be introduced. Below you may find information about the most significant changes in taxation in 2018.
- The maximum assessment base for social insurance premiums in 2018 will be CZK 1 438 992. A maximum assessment base for health insurance has not been set.
- The 15% income tax rate on the super-gross salary and the 7% solidarity tax surcharge remain applicable. The monthly limit for solidarity tax payments will increase to CZK 119 916.
- With effect from 1 January 2018, the minimum wage will increase to CZK 12 200 (which is higher by CZK 1 200 than in 2017).
- The minimum monthly health insurance premium calculated from the minimum wage will be CZK 1 647.
- The tax credit for placing a child into pre-school facilities will increase in line with the new minimum wage. The tax credit amount is identical with the minimum wage amount.
- Increased tax credit of CZK 19 404 or CZK 24 204 for second, third and subsequent children for 2017 has been applicable in the calculation of wages since July 2017; employees can claim the remaining part of this increase for the January to June 2017 period within the year-end payroll tax prepayments settlement or their income tax returns for 2017.
- In 2018, it will be possible to use a new simplified prescribed (pink) form for the employee’s payroll tax statement and to complete and sign it electronically. However, employers will have to ensure the unambiguous identification of each individual employee.
- Fathers will be entitled to paid one-week leave within six weeks after the birth of their children. They will receive a paternity allowance from the health insurance scheme, which is similar to a maternity allowance for women. This type of allowance will be available for fathers of children born after 21 December 2017.