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Hire and manage employees in the Czech Republic

As your Employer of Record (EOR) in the Czech Republic, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.
Last updated:
April 14, 2025
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Quick facts

The Czech Republic is a landlocked country in central Europe, with a population of around 10.7 million people with its capital city is Prague. It has a rich history and culture, with a diverse economy that includes manufacturing, automotive and services. The official language is Czech, the currency is the Czech koruna. As we wrote previously, it is a magnetic place for immigration.

Employment Contracts

In the Czech Republic, employment contracts can be either fixed-term or indefinite. Fixed-term contracts are limited to a maximum of three years, with the possibility of extension for up to two more years. Indefinite contracts have no set end date.

It's feasible to electronically sign the comprehensive list of documents using the email address specified in the employment agreement.

Probation Period

Employers in the Czech Republic can set a probation period for new employees. The maximum length of this period is three months for non-managerial positions and six months for managerial positions.

Working hours

When it comes to working hours, the standard workweek is 40 hours, but it can be spread over 5 or 6 days, depending on the company’s policy. Overtime should be at most 8 hours per week or 150 hours per year and it must be compensated with additional pay or time off.

Vacation Days

Employees get a minimum of four weeks (20 days) of paid vacation per year. This amount can increase with years of service or based on the employee’s specific collective bargaining agreement.

Sick Leave

Employees take up to 14 days of annual sick leave with full pay. After that – the employer can reduce the payment to 60% of the employee’s average earnings for up to 380 days.

Wages and Salary Payment

In terms of salary payment, employers or Czech Republic EOR must pay their employees at least once a month and provide a payslip that includes all deductions and contributions.

The minimum wage was raised in 2025 to CZK 20,800 (€832 per month), and the old eight-tier guaranteed wage system is no longer active.

Public Holidays

In the Czech Republic, employees have day off to 13 public holidays annually. Main holidays include New Year’s Day, Easter Monday, Labor Day, Victory Day, and Christmas Day.

Employer Taxes

Employer contributions are now 24.8% for social security (pensions, unemployment, sickness) and 9% for health insurance.

Employee Taxes

The progressive tax rate threshold changed in 2025. Previously, employees paid 23% tax if their income exceeded 4x the average salary. Now, the threshold is 3x the average salary (CZK 139,671).

The maximum annual cap for social security contributions is now set at 48x the average monthly wage (CZK 2,234,736 for 2025).

Notice Period

The notice period for terminating an employment contract in the Czech Republic depends on the length of the employee’s work. For example, an employee hired for less than 2 years is entitled to a notice of at least 2 months, while an employee who has been employed for more than 2 years is authorized to at least 3 months.

Termination and Severance Pay

In the Czech Republic, an employer can terminate an employment contract for various reasons, such as redundancy or breach of contract. Terminated employees are subject to severance, calculated based on their length of service and salary. The minimum pay is 1 month’s salary for each year of service.

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Frequently
Asked
Questions

What is International EOR and PEO?

International EOR (Employer of Record) and PEO (Professional Employer Organization) are services that enable businesses to compliantly hire, manage, and pay employees in foreign countries without the need for establishing a legal entity. EOR acts as the legal employer while PEO co-employs workers, handling administrative tasks such as payroll, taxes, and benefits.

Does Acvian handle time record submissions?

Acvian does not handle time record submissions directly. It is the client’s responsibility to track and submit employee work hours. However, Acvian can offer guidance and best practices to ensure efficient time tracking and compliance with local labor laws.

How can employees view their payroll details?

Employees can view their payroll details through the monthly payslips they receive and also via our Acvian platform. These payslips contain information on earnings, deductions, taxes, and net pay, giving employees a clear overview of their monthly payroll. Please note that in some countries, employers are restricted from viewing payslips due to data protection regulations, and only employees can share their payslips. For more details on these regulations, please contact our specialists.

How Acvian handles payroll disputes?

Acvian addresses payroll disputes promptly, working closely with both the client and the employee to investigate and resolve any issues.

Does Acvian require advanced monthly payments of salaries and service?

Yes, Acvian requires advanced monthly payments for salaries and service to ensure timely and accurate payroll processing.

Can Acvian provide consultations regarding a labor and tax legislation?

Yes, Acvian can provide consultations regarding labor and tax legislation. Our team of experts is well-versed in local regulations and can offer guidance to help your business maintain compliance, reduce risk, and navigate the complexities of international employment and taxation laws.

Which benefits does Acvian provide?

Acvian provides a diverse range of benefits, including but not limited to:

  • Health insurance
  • Car leasing
  • Gym allowance
  • Per diem compensation
  • Maternity leave

We can customize and offer many kinds of benefits requested by the client, ensuring that your employees receive the support and perks that align with your company culture and local regulations.

Can Acvian provide private health insurance?

Acvian can provide private health insurance options as part of its comprehensive employee benefits package.

What would the monthly/yearly costs for the employee be?

The monthly/yearly costs for an ‘average’ package vary depending on the specific plan and location. See our estimated price packages here. Acvian’s team can provide detailed cost breakdowns based on your requirements.

Can Acvian help with entity set up?

While Acvian doesn’t directly provide entity set-up services, we can introduce you to local lawyers who specialize in this area to assist you with your needs. See also, when it's better to set the entity or use the EOR.

Offboarding: how it is handled?

Offboarding is managed by Acvian in a structured and compliant manner. We coordinate with your business to ensure all necessary documentation, exit interviews, and final payments are completed. Acvian also ensures adherence to local labor laws and regulations, including providing any required notice periods and managing the termination process.

When does business need it?

Businesses typically need EOR and PEO services when they:

  • Expand into new international markets.
  • Hire remote employees in foreign countries.
  • Seek to streamline global workforce management.
  • Aim to ensure compliance with local labor laws and regulations.
  • Want to reduce the time and cost of establishing legal entities abroad.

Is Acvian compliant with GDPR?

Yes, Acvian is fully compliant with GDPR regulations. We collect and process personal data in accordance with the law, ensuring that data is used only for general, allowed purposes such as marketing and other legitimate business activities.

Where can Acvian supply EOR services?

Acvian can supply EOR services in over 180 countries, encompassing almost all European nations, the United States, and Canada, providing extensive coverage to support your business’s global expansion and workforce management needs. See our coverage here.

How does payroll work under EOR?

Under EOR, Acvian manages the payroll process by:

  • Acting as the legal employer of your foreign workforce.
  • Handling salary calculations, deductions, and disbursements.
  • Ensuring compliance with local tax and labor laws.
  • Managing payroll taxes, social contributions, and benefits.
  • Providing timely and accurate payroll processing for your employees.

Explore the details here.

Can you provide support for expatriate EOR workers?

Yes, Acvian provides comprehensive support for expatriate EOR workers, including:

  • Visa and work permit assistance.
  • Relocation and housing support.
  • Local registration and compliance.
  • Payroll and tax management.
  • Coordination of benefits and insurance coverage.

Explore in details here.

What are the details of expats support?

Expats support from Acvian encompasses a range of services designed to facilitate a smooth transition for employees working abroad. Key aspects include:

  • Assistance with visa and work permit applications, renewals, and compliance.
  • Support for relocation, including housing, schooling, and local registration.
  • Guidance on local tax regulations and filings.
  • Coordination of locally compliant benefits and insurance coverage.
  • Ongoing support for any changes or issues that may arise during the expatriate assignment.

What happens after onboarding?

After onboarding, Acvian maintains an ongoing relationship with your business and employees, ensuring smooth payroll processing, managing tax and regulatory compliance, handling benefits administration, and providing support for any changes or issues that may arise in the employment lifecycle. This allows you to focus on your core business operations while Acvian manages your international workforce.

How many days will it take for our personnel to be onboarded?

The onboarding process typically takes between 2 to 4 weeks, depending on the country and complexity of the employee’s situation. However, Acvian strives to expedite this process, ensuring a smooth and efficient transition for your personnel. See our story of the urgent employment project.

Does Acvian provide in-country support for employee inquiries or assistance requests?

Yes, Acvian provides in-country or regional support for employee inquiries and assistance requests. We have dedicated managers in the countries where we support your employees, ensuring prompt and knowledgeable assistance tailored to local regulations and practices.

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