As your 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.
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Your candidate is hired by a PEO in the Czech Republic provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.
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.
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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.
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.
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.
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.
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.
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.
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.
Employers in the Czech Republic must pay social security contributions, which cover health insurance, sickness insurance, pension insurance, and unemployment insurance. The employer contribution rates vary depending on the employee’s income and the type of insurance covered. For example, the rate for health insurance is currently 9%.
Employees in the Czech Republic are subject to income tax, which is calculated based on their income. The tax rates vary depending on the income level, with the top rate currently at 31%.
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.
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.
