Social Charges for a Czech Trade License

Monthy Social Charges for a Trade License are to be paid by everybody, no difference in nationality

The 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:
  • 2018 minimum social charges 2189 CZK / month
Everybody will start in the first year of his trade license with the minium social charges of 2189 CZK /month, independent of the (expected) revenue.

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 Charges

When filing the Income Tax Return, we will calculate if those minimum social charges were enough to cover the revenue that you made in the previous year, or that you must pay extra (this can be 100.000s of CZK!). Also, based on the income of the previous year, we will calculate the new monthly social charges for the next year, or that you continue to pay the (annually adjusted) minimum contribution.

IMPORTANT: The big difference between 2017 and 2018 for Revenue over 1 M CZK

Starting 2018, the 60/40 limit has lowered from 2M CZK to 1 M CZK. THIS IS ONE OF THE BIGGEST CHANGES IN RECENT TIMES, which affects all Revenues over 1M CZK, but Revenues between 1M CZK and 2M CZK the most. The higher Revenues (3M, 4M and up) will only see a change of a few %. Everybody will pay more Income Tax, Social Charges and Health Insurance.

  • We highly recommend to book an EXPERT consultation with our senior consultant if you have a Revenue over 1 M CZK, since Tax / Social / Health contributions may amount to up to 30% of your Revenue and in some case increase as much as 50% compared to what you were paying in 2017 (!)