Czech Republic Taxation of Employees and Deductions (2025)

Taxation of Employees:

• Income Tax: Employees' salaries are subject to income tax, which is withheld by the employer.
• Social and Health Insurance: Employers and employees both contribute to social and health insurance.
  These contributions are also withheld by the employer.
• Tax Residency: Residents are taxed on worldwide income, non-residents are taxed on Czech sourced income.

Tax Deductible Expenses (Verify with Tax Authorities):

• Depreciation of Fixed Assets: As discussed previously, businesses can deduct depreciation expenses.
  The specific rules and rates should be verified.
• Business-Related Insurance Premiums: Premiums for business-related insurance, such as property insurance, are generally deductible.
• Employer's Social and Health Insurance Contributions: Employers' contributions to social and health insurance are deductible.
• Employee's Pension Contributions: Employee contributions to supplementary pension savings (old-age pension) are deductible up to a certain limit.
  The specific limit should be verified.
• Provisions: Provisions made in accordance with relevant legislation, such as provisions for insurance claims, are deductible.
• Charitable Donations: Donations to public benefit organizations are deductible up to a certain percentage of the tax base.
  The specific percentage should be verified.
• Mortgage Interest: Interest paid on mortgages may be deductible under certain conditions.
  The specific conditions and limitations should be verified.

Tax Allowances and Credits for Individuals (Verify with Tax Authorities):

• Taxpayer's Basic Allowance: A basic tax allowance is available to all taxpayers.
  The specific amount (such as the CZK 30,840 you mentioned) should be verified.
• Spouse Allowance: An allowance may be available for a non-working spouse under certain conditions.
  The specific conditions and amount (such as the CZK 24,840 you mentioned) should be verified.
• Child Allowance (Tax Credit): A tax credit is available for dependent children.
  The specific amount per child (such as the CZK 15,204 you mentioned) should be verified.
• Disability Allowance: An allowance is available for individuals with disabilities.
  The specific amount (such as the CZK 16,140 you mentioned) should be verified.
• Student Allowance: An allowance may be available for high school or university students.
  The specific amount (such as the CZK 4,020 you mentioned) should be verified.

Key Updates and Considerations:

• Tax Laws are Subject to Change: Czech tax laws and regulations are subject to frequent updates and amendments.
  It is crucial to verify the latest information with a qualified tax advisor or by consulting official Czech tax sources.
• Documentation: It is essential to maintain proper documentation to support any claimed deductions or allowances.
• Professional Advice: Tax regulations in the Czech Republic can be complex.
  It is highly recommended to seek professional advice from a tax specialist experienced in Czech tax law for specific guidance on your situation.