Following the adoption of the latest amendment to the Labour Code, employees working on an agreement to perform work (known in Czech as a “Dohoda o provedení práce” and commonly abbreviated as DPP) will be entitled to premiums for work on Saturdays, Sundays, public holidays, at night and in difficult working environments from 1 October 2023. However, this increase in income may not always be an advantage for those working on a DPP.

Premiums and limit for insurance contributions

In accordance with the wording of the Sickness Insurance Act in force until the end of 2023, employees working under a DPP participate in the insurance if “countable” income higher than CZK 10,000 was accounted to them. In simple terms, if an employee working on a DPP earns income, including premiums, of more than CZK 10,000 in a given month, this income will be subject to social security and health insurance contributions (the amount of the limit is set by the Sickness Insurance Act, but the other parts of obligatory insurance are linked to this Act). It is therefore obvious that if the employee’s income without premiums is just below the CZK 10,000 threshold and the premiums cause this threshold to be exceeded, the employee may end up with a lower net income than had they not been entitled to the premiums.

Under the legislation in force until the end of 2023, the CZK 10,000 limit is calculated separately for each employer (i.e. an employee may have, for example, income from a DPP with three different employers up to CZK 10,000 each, and none of this income will therefore be subject to insurance contributions).

New limits for insurance contributions under the consolidation package

In connection with the adoption of the consolidation package, which should be effective as of 1 January 2024, the above limit will be changed (or two limits will be introduced). The limit (decisive amount) will no longer be a fixed amount but will be linked to the average wage set for the calendar year.

For the income from the DPPs with one employer, the applicable amount for insurance contributions is set at 25% of the average wage, rounded down to the nearest five hundred crowns. Taking the average wage for 2023 of CZK 40,324, the limit would be CZK 10,000 based on the above calculation. For income from DPPs with more employers, the applicable amount is set at 40% of the average wage, rounded down to the nearest five hundred crowns. Based on the average wage for 2023, this limit would therefore be CZK 16,000. Unlike the current wording of the law (where income above the limit is subject to insurance), income at least equal to the applicable amount will now be subject to insurance. Therefore, if the employee has countable income of exactly the decisive amount, the insurance contributions will already have to be paid from this income.

Income tax: withholding tax vs. advance tax

Personal income tax applicable to this income is linked to the limit set by the Sickness Insurance Act. According to the current wording of the Income Taxes Act, income from a DPP not exceeding CZK 10,000 at one payer per calendar month (provided the employee has not signed a tax declaration with this employer) represents a separate tax base for the application of withholding tax.

Following the adoption of the consolidation package, the CZK 10,000 limit will be replaced by reference to the new limits in the Sickness Insurance Act (i.e. 25% and 40% of average wages), but the wording “not exceeding” will remain. If an employee earns income of exactly the decisive amount, that income will become subject to insurance contributions (as mentioned above) but may still be subject to withholding tax because it has not exceeded the threshold amount.


If you have any questions about this topic, please contact the authors of this article – Dana Provázková a Michal Zahradník.

This document is a general communication and should not be regarded as legal advice on any specific matter.