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Hire and manage employees in the Czech Republic
Quick facts
The Czech Republic is a landlocked country in central Europe, with a population of around 10.7 million people with its capital city is Prague. It has a rich history and culture, with a diverse economy that includes manufacturing, automotive and services. The official language is Czech, the currency is the Czech koruna. As we wrote previously, it is a magnetic place for immigration.
Employment Contracts
In the Czech Republic, employment contracts can be either fixed-term or indefinite. Fixed-term contracts are limited to a maximum of three years, with the possibility of extension for up to two more years. Indefinite contracts have no set end date.
It's feasible to electronically sign the comprehensive list of documents using the email address specified in the employment agreement.
Probation Period
Employers in the Czech Republic can set a probation period for new employees. The maximum length of this period is three months for non-managerial positions and six months for managerial positions.
Working hours
When it comes to working hours, the standard workweek is 40 hours, but it can be spread over 5 or 6 days, depending on the company’s policy. Overtime should be at most 8 hours per week or 150 hours per year and it must be compensated with additional pay or time off.
Vacation Days
Employees get a minimum of four weeks (20 days) of paid vacation per year. This amount can increase with years of service or based on the employee’s specific collective bargaining agreement.
Sick Leave
Employees take up to 14 days of annual sick leave with full pay. After that – the employer can reduce the payment to 60% of the employee’s average earnings for up to 380 days.
Wages and Salary Payment
In terms of salary payment, employers or Czech Republic EOR must pay their employees at least once a month and provide a payslip that includes all deductions and contributions.
The minimum wage was raised in 2025 to CZK 20,800 (€832 per month), and the old eight-tier guaranteed wage system is no longer active.
Public Holidays
In the Czech Republic, employees have day off to 13 public holidays annually. Main holidays include New Year’s Day, Easter Monday, Labor Day, Victory Day, and Christmas Day.
Employer Taxes
Employer contributions are now 24.8% for social security (pensions, unemployment, sickness) and 9% for health insurance.
Employee Taxes
The progressive tax rate threshold changed in 2025. Previously, employees paid 23% tax if their income exceeded 4x the average salary. Now, the threshold is 3x the average salary (CZK 139,671).
The maximum annual cap for social security contributions is now set at 48x the average monthly wage (CZK 2,234,736 for 2025).
Notice Period
The notice period for terminating an employment contract in the Czech Republic depends on the length of the employee’s work. For example, an employee hired for less than 2 years is entitled to a notice of at least 2 months, while an employee who has been employed for more than 2 years is authorized to at least 3 months.
Termination and Severance Pay
In the Czech Republic, an employer can terminate an employment contract for various reasons, such as redundancy or breach of contract. Terminated employees are subject to severance, calculated based on their length of service and salary. The minimum pay is 1 month’s salary for each year of service.
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