Discount on social security contributions for part-time employees

From 1 February 2023, an amendment to the Act on Social Security and State Employment Policy Contributions will allow employers to apply a discount on insurance premiums for selected employees in part-time employment or service relationships. The amendment aims to promote the employment of persons who cannot work full-time due to age or various life situations.

This involves a discount on the part of the insurance premium paid by the employer, i.e., the current 24.8% of the assessment base, which thus applies to the employer and not to the employee.

The employer will be able to apply a monthly social security contribution discount of 5% of the aggregate of the assessment bases of employees in part-time service or employment relationships under all the following conditions:

  • working hours shall be at least 8 hours but not more than 30 hours per week
  • the employee’s assessment base arising from all jobs with the same employer does not exceed 1.5 times the average wage
  • their assessment base for all jobs with the same employer attributable to 1 hour of the total hours worked in a calendar month does not exceed 1.15% of the average wage.

The amendment contains further specific conditions for applying the discount.
 Selected categories of employees will include, e.g.:

  • persons above the age of 55 years
  • parents caring for children younger than 10 years of age
  • persons caring for a close person under 10 years of age who is dependent on the help of another person
  • people with disabilities
  • persons undergoing requalification. 

The discount shall also apply to employees under the age of 21 regardless of the extent of their agreed working hours.

Should employees hold multiple jobs with the same employer, it will only be possible to claim the discount for one job of the employee. If an employee is employed by more than one employer in a given calendar month, only the employer applying for the discount first may can claim the discount.

Another condition is that employers notify the Czech Social Security Administration of their intention to apply the discount using the prescribed form within the deadline for submitting the overview of premiums paid for the calendar month for which the discount is claimed. The discount shall be deducted from the total premium for that month. The employer must also keep records of the employees for whom the discount is claimed.

The amendment also introduces an information obligation of employees towards their employer so that the employer has the information necessary to claim the monthly premium reduction. Under the amendment, if the employee fails to meet the information obligation or deliberately provides incorrect information to the employer and the premium discount is thus incorrectly applied, the employer may require the employee to pay the resulting penalty.

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