Social Charges for a Czech Trade License
Monthy Social Charges for a Trade License are to be paid by everybody, no difference in nationalityThe height of the social charges depends on your revenue (it is about 5.8% of revenue up to 2 M CZK), with a monthly minimum of:
- 2017 minimum social charges 2061 CZK / month
If you have a job as employee / receive salary as director of an sro and using the trade license as secondary income, then the monthly social contribution is 0 CZK / month for the first year.
Additional, so-called Premiums are not included in the standard social charges. The Premiums pay out (a rather modest sum) in case of long-term illness / inability to work. Also they entitle you to state support in the first phase of maternity leave, although any payout during the first part of maternity leave will require to pause / stop the trade license. Inform yourself whether it is beneficial to pay the Premiums at all. In most cases the state support is so small, that it makes more sense to keep your trade license active, and send a few more invoices. When registering your trade licenses, we do not register you for the Premiums - because it is not a requirement for the proper functioning of the trade license.
Calculating annual Social ChargesWhen filing the Income Tax Return for 2017, we will calculate if those minimum social charges were enough to cover the revenue that you made in 2017, or that you must pay extra (this can be 100.000s of CZK!). Also, based on the income of 2017, we will calculate the new monthly social charges for 2018, or that you continue to pay the (annually adjusted) minimum contribution.
IMPORTANT: Social Charges for a Trade License with a revenue over 2 M CZKStarting 2015, for revenue over 2 M CZK, Social Charges have gone up significanty.
Up to 2 M CZK, Social Charges will still be 5.8%, but over 2 M CZK, they will be up to 14.6%, which is 2.5 times more.
This is because the 60/40 rule (see next page, Income Tax) can not be used for revenue over 2 M CZK.
- We highly recommend to book an EXPERT consultation with our senior consultant if you have a revenue over 2 M CZK, since Tax / Social / Health contributions may amount to up to 30% of your revenue (!)