Foreign mandatory insurance paid by employer and super-gross salary

If you have employees who are not subject to mandatory social security and health insurance in the Czech Republic but are subject to foreign insurance in a member state of the European Union or the European Economic Area or Switzerland, then determination of their super-gross salaries for the purposes of calculating tax from dependent activities changes from this January.

Such employees' super-gross salary will now include the amount of insurance which the employer actually pays as a mandatory contribution into foreign insurance instead of the originally included fictitious Czech insurance amounting to 34%. This means there will be a certain administrative burden because the amount must be determined in the respective country and demonstrated. The impact on the amount of taxation of employees can vary depending on whether and in what amount the respective foreign social security system requires contributions from employers.

Employees who are subject to an insurance system in a country outside the EU will still have their super-gross salary increased by a fictitious Czech insurance.