10. 12. 2018
10. 12.
2018
Seven tax news items for employers and employees in 2019
The maximum assessment base for social insurance and the minimum wage will increase, which will also affect other mandatory payments and tax credits. The waiting period, i.e. the first three days of a temporary inability to work during which employees do not receive any wage or salary compensation, should be abolished from 1 July 2019, meaning that employers will also have to pay salary compensation for their employees’ first three sick days. But probably the most significant change relates to employees that are subject to public insurance in the EU, EEA member states and Switzerland and their super-gross wage calculations.
- 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 be CZK 130 796.
- In 2019, the maximum assessment base for social insurance premiums will be CZK 1 569 552. A maximum assessment base for health insurance has not been set.
- With effect from 1 January 2019, the minimum monthly wage will increase from CZK 12 200 to CZK 13 350. The minimum monthly health insurance premium calculated from the minimum assessment base, i.e. the minimum wage, will be CZK 1 803.
- The tax credit for placing a child into pre-school facilities will increase to CZK 13 350 for each maintained child in the 2019 taxable period.
- With effect from 1 January 2019, income decisive for mandatory sickness insurance payments will increase to CZK 3 000 a month. Consequently, income of up to CZK 2 999 a month from an agreement to perform work will not be liable to social and health insurance. The related Income Tax Act provision should also be amended to apply withholding tax on the increased amount of CZK 2 999 a month.
- The deputies voted for the original wording of a draft amendment to the Income Tax Act (Print No. 80) which the Senate meant to dismiss. Consequently, from 1 January 2019, the amendment will change the method of calculating the super-gross wage of taxpayers whose public insurance is governed by the legal regulations of the European Union, the European Economic Community and Switzerland. The amendment is yet to be signed by the president. According to the amendment, the tax base of taxpayers who are participating in public insurance in another EU or EEA country and Switzerland will increase by the employer’s actual contributions to this foreign insurance scheme, instead of increasing by the hypothetical Czech insurance contributions applicable to date. This will result in an increased administrative burden for employers who will have to ascertain foreign insurance contributions and adapt payroll software accordingly.
- Deputies passed an amendment to the Labour Code (Print No. 109) abolishing the waiting period, which means that employers will have to pay salary compensation to their employees also for the first three days of their temporary inability to work. The employers’ increased costs in this respect should be compensated by a reduction in contributions to the sickness insurance scheme (2.1% instead of current 2.3%). The amendment is proposed to be effective from 1 July 2019. The amendment is yet to be passed by the Senate and signed by the president.
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