Trade License vs Salary vs Dividends
An often-hear questions is: so...what is 'better'? Salary? a Trade License? and SRO?
Of course 'better' means usually: how do I get to keep most of my money.
With Dividends, you can not escape paying 19% Corporate Income Tax, and then 15-23% Withholding Tax before the money is 'yours' and out of the company.Oh, and if the SRO is at a loss - you can't pay out Dividends.
As an employee, your boss pays 34% on top of your Gross Salary, and the difference between the Gross (in your contract) and Net (in your hand) is 11-27% (Ok, this is between bare-bone and high roller salaries, but it is safe to say for most salaries: about 22%).
If you are your own boss: multipy the Net salary by 1.8 to get to the total costs. Sub-optimal.
On a Dohoda o provedene prace (it is not Employment, it is more for one-off or low-hour jobs), only 15% Income Tax is withheld.
You can earn only 10.000 CZK / month per job - but... you can have multiple dohodas at multiple jobs.
Obviously all of the above have one or more drawbacks.
But the Trade License, for Revenue between 600K and 2M offers Tax + Social + Health combined is about 13% - and about 10% for people who are not in Public Health Care.
Sure, over 2M Revenue the percentage rises to 30% at 5M Revenue, but compared to the other options - that's still the best deal.
Here a picture to make it easier to understand:
