Changes in employee taxation in 2026

Increase in maximum annual assessment base and progressive tax threshold

For 2026, the maximum annual assessment base for social security contributions has increased to CZK 2,350,416 (CZK 115,680 over the previous year). Once this income threshold is reached, no further social security contributions are paid by the employee or employer. At the same time, the threshold for applying the 23% tax rate has increased to an annual income over CZK 1,762,812, which corresponds to a monthly income over CZK 146,901. Income below this threshold will continue to be taxed at a rate of 15%.
 

Agreements on work outside employment

The decisive income for participation in sickness insurance has increased to CZK 12,000 per month. If this threshold is reached, the income from the agreements on work outside employment is subject to social security and health insurance contributions.
 

Increase in minimum wage

From January 2026, the minimum wage has increased from CZK 20,800 to CZK 22,400 for a set weekly working time of 40 hours, with an hourly minimum wage of CZK 134.40. As a result, the minimum monthly assessment base for health insurance of employees is also higher.
 

Increase in limit for exemption of non-financial benefits

From 1 January 2026, the limits for the exemption of health and leisure-related employee benefits have increased. Benefits not exceeding these limits will not be subject to taxation and social security and health insurance contributions on the part of employees.

The limit for the exemption of health-related benefits has been set for 2026 at the level of the average wage, i.e.  CZK 48,967; the limit for the exemption of leisure-related benefits at 50 per cent of the average wage, i.e. CZK 24,483.50.
 

Changes in domestic and foreign travel allowances

From 1 January 2026, the minimum basic allowance for the use of a personal motor vehicle on a business trip has changed from CZK 5.80 to CZK 5.90 per kilometre. Meal allowances for domestic and some foreign business trips (obligatory under the Labour Code) have also risen.
 

Lump-sum compensation for remote work

The lump-sum compensation for expenses related to remote work (home office), which employers can provide under the Labour Code, has been decreased from CZK 4.80 to CZK 4.70 per hour.
 

Employee meal allowances

Both financial and non-financial meal allowances (non-obligatory employee benefits) are exempt up to an aggregate of 70% of the upper limit of the meal allowance that can be provided to salaried employees for domestic business trips of 5 to 12 hours. For 2026, an allowance of CZK 129.50 is thus exempt.

The meal allowance exemption is nonetheless conditional upon the employee having worked at least three hours per shift; employees without a set shift (e.g. statutory bodies) must work at least three hours per calendar day. At the same time, employees must not at the same time be entitled to an (obligatory) meal allowance as part of a travel allowance. Employees will be entitled to an additional exempt allowance (in the same amount) if the total shift including breaks exceeds 11 hours (employees without a set shift must work at least 11 hours per calendar day).
 

Single monthly employer reporting (JMHZ)

The single monthly employer reporting (JMHZ) will fundamentally change the way employers report data to social security authorities and many other authorities included in the system. The JMHZ will replace the monthly reports to the Czech Social Security Administration (ČSSZ) and consolidate a number of reporting obligations into a single electronic submission to be filed once a month, always between the first and the 20th day of the following month.

In the transitional period from January to March 2026, no reports will be submitted. During this period, employers will only pay social security contributions. The reports for this period will be submitted between 1 April and 30 June 2026. The first standard JMHZ will be submitted for the month of April 2026, i.e., between 1 and 20 May 2026.

The JMHZ does not cover health insurance. In 2026, employers will therefore have to submit regular monthly overviews and notifications to health insurance companies as they have done so far.
 

Abolition of withholding tax for tax non-resident members of statutory bodies

Remuneration paid to members of statutory bodies who are Czech tax non-residents will now be subject to monthly prepayments of tax on income from employment (and progressive taxation). Withholding tax that had been in application until the end of 2025 will therefore no longer be levied.If the remuneration of a tax non-resident exceeds 36 times the average wage, they will be required to file an income tax return in the Czech Republic for the given taxable period.
 

Low-emission vehicle definition

For income tax purposes, a new definition will be used, namely that a low-emission vehicle is a road motor vehicle of category M1, M2 or N1 that does not exceed the CO2 emission limit of 50 g/km and is not a zero-emission vehicle.

The new regulation is crucial for maintaining tax benefits for low-emission company cars even after 2025.
 

Release from obligation to withhold tax prepayments for employees posted abroad

From January 2026, employers will not have to withhold tax prepayments for employees posted abroad if these employees also meet other conditions.
 

Mandatory employer contributions to retirement savings products

Employers will now be required to contribute to supplementary pension insurance or additional pension savings schemes for employees who perform third category risk work (if the employee works at least three shifts of this risk work in a given month). The contribution is mandatory and amounts to four per cent of the social security assessment base. It is tax-deductible for the employer and counts towards the annual limit of CZK 50,000 that is exempt from tax and insurance contributions for the employee. The employer must start contributing from the calendar month following the delivery of the employee's written notification. Contributions to a long-term investment product (DIP) will not be considered as fulfilling this obligation.
 

Changes in health insurance for working parents

From 1 January 2026, the state will only pay health insurance premiums for parents caring for at least one child under the age of seven, while it will no longer be conditional on the parent not earning any income. The minimum assessment base requirement will not apply to the parent as long as they assert this entitlement with their health insurance company and subsequently inform their employer of this.