What to prepare for with introduction of JMHZ: employee benefit reporting
The senate has passed the Single Monthly Employer Reporting (in Czech Jednotné měsíční hlášení zaměstnavatele or JMHZ) bill. The effective date of the bill remains scheduled for 1 January 2026, with some employer registration and monthly reporting obligations postponed to 1 April 2026 because of several amending proposals. With the introduction of the JMHZ, the financial administration will have information on individual employee income and taxation at its disposal.
In a series of articles on this topic, we will draw your attention to the tax implications of selected employee benefits, as these will also be part of the income reported monthly to the tax administration and will affect personal income tax on employment and relevant insurance contributions as well as corporate income tax in terms of tax deductibility.
Despite the ongoing legislative process, the JMHZ’s pilot operation started on 1 July 2025, involving selected employers, payroll system operators, and key public administration authorities.
Retrospective reporting for the first quarter of 2026
Contrary to the original plan to start the live operation of the JMHZ from January 2026, the amending proposals postponed some of the employer registration obligations and the actual obligation to submit monthly reports to 1 April 2026. However, this does not mean that detailed information on the structure of employees' income for the period January to March 2026 will not reach the state administration: in the period from April to June 2026, it will be necessary to submit monthly reports also for the first three months of the year so that the relevant public administration institutions have data available for the entire calendar year. The postponement should give employers sufficient time to prepare and implement the related processes that will have to be introduced in connection with the JMHZ, especially as regards their payroll software.
The format and content of the reports not yet known
The detailed content structure of the data that employers will be required to report on a monthly basis is to be published by the government after the final approval of the law and its publication in the Collection of Laws. According to the Ministry of Labour and Social Affairs, the respective government regulation is expected to be issued in October 2025.
Although the exact format and content of the monthly reporting is not yet known, it should primarily include data on individual employees and occupations, including details of the monthly income paid to employees. This will give the tax administration near real-time information on what income employees receive. All, not just taxable income will be reported. The tax administration will thus be able to assess whether the income is taxable, subject to monthly income tax prepayments, or tax-exempt.
The data will also be available to the Czech Social Security Administration and, in the second phase of the JMHZ implementation, to health insurance companies.
Problem areas under scrutiny: what we will focus on
As the obligation to report employee income approaches, we will look at the problematic issues relating to employee benefits in a series of three articles. Although employee benefits are a commonly used form of employment income, many employers still find it difficult to assess them for tax purposes, especially due to the amendments to legislation introduced in the last two years.
We will discuss, e.g., the tax and insurance aspects of pre-school and school fees paid for employees' children, sports or health services and meal allowances. We will also look at the individual benefits from the perspective of tax deductibility on the employer’s part.
You can look forward to the first in a series of articles in the September issue of Tax and Legal Update.