Social Charges for a Czech Trade License
Monthy Social Charges for a Trade License - all nationalitiesEverybody will start in the first year of his Trade License with the minium Social Charges, independent of the (expected) Revenue, but if that is not enough, you need to pay the difference once you file the Tax Return.
- The minimum Social Charges for 2023 will be 2944 CZK / month. Each year they go up by about 100 CZK.
- The total sum of the Social Charges depends on your annual Revenue (it is about 5.8% of Revenue up to 2 M CZK, using the 60/40 rule)
Premiums, Maternity BenefitsAdditional, 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. Best is to find out your individual case directly at Social Security.
NOTE: In order to get maternity benefits, Premiums must be paid on top of the Social Security contributions !!! Confusingly, this is called 'health insurance' - but it is paid to the Social Security. See Nemocenské pojištění OSVČ (external link)
Calculating annual Social ChargesWhen 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 10.000s of CZK!). Also, based on the income of the previous year, we will calculate the new monthly Social Charges for the next year.
Continue to: Public Health Care or Commercial Health Insurance