With a trade license you pay three things: social security, health insurance and income tax. Here is the short version; each part links to the full guide.
Every month: social and health advances
- Social security: at least 5,005 CZK a month, within the month it is for. New to self-employment? Then advances are not required until your first overview, and a lower minimum of 3,575 CZK applies in your starting year and the two years after.
- Health insurance: at least 3,306 CZK a month, by the 8th of the following month. Not in Czech public health insurance? Then you need commercial health insurance instead.
- Trade license next to a job or studies? Then it is a secondary activity: lower or no minimums. See social security and health insurance.
Pay to the right account with the variable symbol you were given, and keep using that symbol. All accounts: bank accounts for tax, social and health.
Once a year: tax return and overviews
- Income tax return for the previous year: by 1 April, by 1 May when filed electronically, or by 1 July when a tax advisor files it.
- Income tax: 15% of your profit (23% on the part above 1,762,812 CZK), minus the basic tax credit of 30,840 CZK. With the 60/40 method, 60% of your revenue counts as expenses, without receipts.
- Overviews (přehledy) for social security and your health insurer, within a month after the tax return. They set what you still owe for last year and your new monthly advances.
Full guides: income tax for a trade license and the income tax return.
Or: the flat-tax method
With the flat-tax method (paušální daň) you pay one fixed amount a month for tax, social and health together, for example 9,162 CZK in the first band, for revenue up to 1,500,000 CZK. No tax return and no overviews. You register by 10 January, or together with a new trade license. In theory you can use it from the start, if all your registrations go through in time. We usually advise starting with the 60/40 method, and the flat-tax method is not possible for everyone, nor always cheaper: see 60/40, real expenses or flat tax.
VAT, if you need it
Invoicing businesses in other EU countries? Then you need at least a VAT-light registration. Revenue from Czech sources above 2,000,000 CZK a year? Then full VAT. See VAT registration types.
What this means in total, in four typical cases: what does a trade license cost you? For your own revenue: the tax, social, health calculator.
