Types of employment in the Czech Republic

Thinking about working in the Czech Republic, but feeling a bit lost in what types of employment contract, agreement or terms exist? Here’s an overview of the Czech labour code to get you up to speed.

The labour code regulates legal relations arising in connection with the performance of dependent work between employees and their employers; such relations are referred to as:

– Employment Relationship

– Work Agreements

Both relationships are regulated by Act No. 262/2006 Coll. (Labour Code). All employment contracts should be concluded in writing, it is advisable to read them thoroughly before signing so that you – as the employee – know exactly what your rights and obligations are, in relation to the contract. Work contracts must include statutory requirements, including: the place of work, type of work and commencement of employment.

Employment Relationship

An ‘Employment Relationship’ refers to regular work usually carried out on working days (the working week in the Czech Republic is Monday to Friday). The probationary period,  the initial timeframe used to gauge an employee’s suitability for the role, and whether both employee and employer are the ‘right fit’, is usually three month.

The working week is 40 hours (5 x 8 hours per day), with the exception of public holidays, when work is not carried out – Employers can call upon their employees only in rare cases.

The employment relationship may be for a fixed or indefinite period.

Payroll in the Czech Republic is usually paid monthly. Compulsory deductions consist of 15% income tax, health and social insurance. Social insurance is currently 6.5% of gross wage, while health insurance is 4.5% of gross wage.

Salaries listed in job advertisements, in most cases, represent a gross monthly wage. The net wage is calculated by including the above deductions.

Employees are entitled to annual leave amounting to minimum of 20 days per year (excluding public holidays).

Part-time work

Part-time work is mainly used by pregnant employees and people caring for close relatives, etc. In practice, this means that the employee works. for example, 4 hours a day, 5 days a week. They are entitled to a pro-rated proportion of annual leave and are subject to the same rules as other employees.

Flexible employment

Flexible work is not an obligation for employers. Employees do, of course, appreciat flexibility, but its provision is dependent on the type of work performed and the agreement made between both parties.

Do you require a more flexible job because of family commitments?

Flexible working hours

Thanks to flexible working hours, employees have more freedom to organise their time. The employer usually determines a fixed period of time when employees have to be present at the workplace, and the rest of the time they may work with less restrictions, when they find it appropriate. Flexible working hours are suitable, for example, for parents with young children.

Working from home (home office)

There is an increasing demand for the ability to work from home, where the employee works outside of the employer’s premises. This also depends, of course, on the type of work performed and its suitability for the home office. The benefits of which can be: increased performance, time saved commuting or travelling to meetings, and happier employees.

AGREEMENTS ON WORK PERFORMED OUTSIDE AN EMPLOYMENT RELATIONSHIP

The Labor Code distinguishes between two agreements, both of which must be concluded in writing:

Agreement to complete a job (DPP)

The scope of work for which an agreement to complete a job is concluded may not exceed 300 hours in one calendar year.

The minimum age of the employee is 15 years.

If monthly earnings for one employer:

• do not exceed CZK 10,000 – the employer does not provide health or social insurance (you have to pay it to the relevant institution). Only a 15% income tax is deducted, which may be either final (withholding – paid to the Tax Office) or advance (cleared after the end of the calendar year).
• exceed CZK 10,000 – health, social insurance and income tax are deducted.

Agreement to perform work (DPC)

The number of hours worked must not exceed half-time, ie 20 hours a week.

If monthly earnings for one employer:

• do not exceed CZK 2,500 – only 15% income tax is deducted.
• exceed CZK 2,500 – health, social insurance and income tax are deducted.

The minimum age of the employee is again limited to 15 years.

The different types of employment agreement have positives and negatives dependent on the employee’s circumstances. Carefully consider where it is more beneficial for you to work, for example, on a part-time basis or on an employment contract. However, it should be noted that a full time employee has the most rights under the terms of the Labour Code.
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Author: Míša Benešovská

I’m a freelance journalist and copywriter, mainly covering IT industry. I’ve been fascinated by it for nearly a quarter of a century (or since I dismantled my first computer). I worked for Seznam.cz, Unicorn Systems or Mafra publisher. In my spare time, I love game consoles and keep perfecting a recipe for the best pumpkin risotto in the world.