Contracts for work – news in 2025

The original changes to the recovery package in the area of taxation of contracts for work ("CfW") could not be implemented because it contained a number of errors and inaccuracies, which is why further changes were made.

The employer may now report one so-called notified CfW per each employee to the Social Security Authority (the "SSA"), for which the limit for participation in the social security contributions and health insurance will be applied at 25% of the average wage (CZK 10,500 for 2024). For other contracts, the obligation to pay contributions will start from the limit of CZK 4,000. This new system will eventually be introduced only from 2025. However, the obligation to report contracts to the authorities from July this year has been retained under the original recovery package and also applies to contracts up to the limit of CZK 4,000. The employer will submit the notification to the SSA electronically.

The new system of two limits, which was originally introduced by the recovery package, has been abolished and it will be the case that, as a matter of principle, CfWs will be treated in the same way as regular employment in terms of the Sickness Insurance Act. CfWs will be considered to constitute small-scale employment without the obligation to pay social insurance under the conditions set out in the Sickness Insurance Act (that is, only up to the limit of CZK 4,000 per calendar month for 2024). However, if the CfW has an income of CZK 4,000 per month or more, this CfW will give rise to insurance participation upon the commencement of employment.