With effect from 1 February 2023, an employer may apply a discount on social security premiums (a "discount") for a calendar month for a specified group of employees, provided that the statutory conditions are met.
The employer is entitled to a discount for a calendar month for employees in an employment or service relationship, and the range of employees is chosen so that they are persons who, due to various life situations, are unable or unavailable to work for the specified weekly working hours.
Only a single employer may provide the rebate for one employee per calendar month. The discount for an employee is only due to an employer who has notified the Czech Social Security Administration (CSSA) of its intention to apply the discount for that employee prior to applying it. If more than one employer intends to claim the discount for the same employee, the discount for that employee is due to the employer who first notified the CSSA of that intention. Notification means the time of receipt of the claim by the CSSA.
The amount of the discount per calendar month is 5% of the aggregate of the employees' assessment bases (gross income) on which the discount is applied. If an employee holds more than one job (part-time) with the same employer, only the assessment base of the job on which the employer applies the discount is included in the employee's aggregate assessment base. There is no change on the employee's side; they still pay 6.5% of the assessment base (gross wages). The discount can be applied for the first time in the February 2023 payroll.
The discount must be shown on the statement of assessment in the month in which all conditions are met and can only be claimed up to the due date of the statement, i.e. the 20th of the month (even by correction). It cannot be claimed retroactively.
The discount on the social security premium is due to the employer who duly notifies the CSSA of the intention to apply the discount:
- the employer may give notice no earlier than one month before the date from which the discount will apply, and not before the employee has signed up;
- the intention may be notified no later than by the deadline for submitting the review.
If an employer decides to apply a premium discount, it must notify the employee in writing and inform the employee of their obligation to document this fact and to report any changes that would affect the application of the discount.
The intention to apply the discount is notified on the prescribed form via the e-portal or by data message. The expiry of the discount will be notified in the same manner within eight days after the end of the calendar month in which the discount was last claimed on behalf of that employee. Upon termination of employment, the application of the discount will automatically be cancelled with the application.
The CSSA will keep a record of these intentions to avoid overlapping application of the discount to the same employee. Employers who have not yet submitted an intention to apply the discount will also be able to consult the register, but only from the moment the employer submits a notice of the employee's employment.
Conditions for entitlement to the discount:
- The discount can only be applied to employment contracts (not agreements).
- The agreed weekly hours are between 8 and 30 hours per week (no less, no more).
- If there is more than one part-time employment relationship with the same employer, these part-time employment relationships are aggregated for the purposes of applying the discount; the discount is only granted from one employment relationship.
Employees eligible for the discount:
- An employee over the age of 55.
- An employee caring for a child under 10 years of age (under the conditions of the State Social Support Act).
- An employee caring for a close person under 10 years of age who is dependent on the assistance of another person (subject to the conditions of the Pension Insurance Act).
- An employee preparing for their future profession by studying at high school or university; only full-time study is recognised.
- An employee who has received retraining from the Labour Office in the past 12 months.
- An employee with a disability or invalidity.
- An employee under the age of 21 (regardless of the extent of the agreed hours).
In which cases are employees not eligible for a discount:
- The aggregate of the employee's assessment bases from all jobs performed in an employment or service relationship with the same employer per calendar month is higher than 1.5 times the average wage; in 2023 the average wage is CZK 40,324, 1.5 times the average wage is therefore CZK 60,486.
- The aggregate of the employee's assessment bases from all jobs performed in an employment or service relationship with the same employer per 1 hour from the aggregate of hours worked from all such jobs in a calendar month is higher (the amount is not rounded in any way) than 1.15% of the average wage (Section 23b(4) of the Employment and Occupational Pensions Act), i.e. higher than CZK 463,726 in 2023.
- The employee works more than 138 hours in a given month (all employment relationships are added together) - can be applied even if the employee starts during the month, only the limit must be adjusted to a pro rata part of calendar days, the result is rounded up to whole hours.
- The employer receives a contribution for the employee from the Labour Office (e.g. for short-time work – "Kurzarbeit").
- An employee with a disability is employed by an employer recognised in the sheltered labour market.
The text uses information published on the website of the Czech Social Security Administration:
https://www.cssz.cz/slevy-na-pojistnem