Social Charges for a Czech Trade License

Monthy Social Charges for a Trade License are to be paid by everybody, no difference in nationality

The height of the social charges depends on your revenue (it is about 5.8% of revenue up to 2 M CZK, using the 60/40 rule), with a monthly minimum.
  • Every year the minimum social charges go up by about 100 CZK. For 2020 they will be just a bit under 2500 CZK / month
Everybody will start in the first year of his trade license with the minium social charges, independent of the (expected) revenue.

If you have a job as employee / receive salary as director of an sro and using the trade license as secondary income, then the monthly social contribution is 0 CZK / month for the first year.

Premiums, Maternity Benefits

Additional, so-called Premiums are not included in the standard social charges. The Premiums pay out (a rather modest sum) in case of long-term illness / inability to work. Also they entitle you to state support in the first phase of maternity leave, although any payout during the first part of maternity leave will require to not invoice through the trade license. Inform yourself whether it is beneficial to pay the Premiums at all. In most cases the state support is so small, that it makes more sense to keep your trade license active, and send a few more invoices. When registering your trade licenses, we do not register you for the Premiums automatically - because it is not a requirement for the proper functioning of the trade license.

Maternity and Parental benefits are indeed a very complex matter in Czech Republic. One needs to comply to a number of conditions (paying the Premiums well in advance (270 days) and the exact amount, for example) and file applications exactly in time at the Social Security and Unemployment Office. It is so complex that it is impossible to give any reasonable advice in a few words.

Calculating annual Social Charges

When filing the Income Tax Return, we will calculate if those minimum social charges were enough to cover the revenue that you made in the previous year, or that you must pay extra (this can be 100.000s of CZK if you earn millions!). Also, based on the income of the previous year, we will calculate the new monthly social charges for the next year, or that you continue to pay the (annually adjusted) minimum contribution.

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