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UPDATED JUL 6, 2026💡 Everything you need to know to hire and manage employees in the Czech Republic through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.
At a Glance
| Item | Detail |
|---|---|
| Currency | Czech Koruna (CZK) |
| Payroll cycle | Monthly. Toku runs one payroll per month in the Czech Republic. |
| Estimated employer costs on top of salary | Approx. 34-35% |
| Onboarding lead time | 5-7 business days |
| Standard working week | 40 hours |
| Probation period | 3 months standard, up to 6 for managerial roles (set in the employment agreement) |
| Annual leave | 4 weeks statutory minimum (5 weeks is the market standard) |
| 13th month salary | Not required |
| Minimum notice on termination | 1-2 months depending on the grounds |
Onboarding a New Hire
Plan for 5-7 business days between submitting a new hire and their start date. Toku registers the employee with social security and their health insurer before the start date, and the employment contract must be signed before day one. Your new hire just needs to provide proof of their health insurance and sign promptly.
Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.
Employer Costs
On top of gross salary, employers in the Czech Republic pay:
| Cost | Rate | Notes |
|---|---|---|
| Pension insurance | 21.5% | On salary up to CZK 2,350,416 per year (2026) |
| Health insurance | 9.0% | No ceiling |
| Sickness insurance | 2.1% | Same annual ceiling as pension |
| Unemployment insurance | 1.2% | Same annual ceiling as pension |
| Accident insurance | 0.28-5.04% | Based on industry risk classification; low for office roles |
As a rule of thumb, total cost of employment is roughly 134-135% of gross salary for typical office-based roles. There is no mandatory 13th month salary.
Employees pay their own social and health insurance (11.6% in total) plus income tax of 15% (23% on income above roughly CZK 1.76 million per year). These are withheld from gross salary, not paid on top. Toku calculates and remits all of the above.
Compensation & Payroll
Toku runs one payroll per month in the Czech Republic, and employees receive a written payslip each cycle showing gross pay, deductions, and net pay. Salaries are paid in CZK by bank transfer.
The minimum wage for 2026 is CZK 22,400 per month (CZK 134.40 per hour). There is no statutory 13th month salary or mandatory bonus, though annual bonuses are common in the market.
Employment Contracts & Probation
- Toku issues a compliant local employment agreement for every hire, signed before the first day of work; bilingual contracts are standard for international teams.
- Indefinite-term contracts are the default. Fixed-term contracts may run up to three years and be renewed at most twice.
- Probation is set in the employment agreement: typically 3 months, or up to 6 months for managerial roles. The statutory maximum is 4 months for non-managerial employees and 8 months for managers. During probation, either party may end the employment without stating a reason.
Working Hours
The standard week is 40 hours, with a maximum shift length of 12 hours. Overtime may only be ordered in exceptional cases, is capped at 150 hours per year without the employee's consent (416 hours total with it), and averages no more than 8 extra hours per week.
Premiums on top of average earnings: 25% for overtime, 100% for public holiday work (or compensatory time off), 10% for weekend work, and 10% for night work. Employees get a 30-minute break after six hours, at least 11 hours of rest between shifts, and 35 hours of weekly rest.
Leave Entitlements
| Leave | Entitlement | Who pays |
|---|---|---|
| Annual leave | 4 weeks (20 working days) minimum; 5 weeks is the prevailing market standard | Employer |
| Sick leave (days 1-14) | 60% of reduced average earnings | Employer |
| Sick leave (day 15 onward) | 60-72% of the daily assessment base, rising with duration | Social security |
| Maternity leave | 28 weeks (37 for multiple births) at 70% of the daily assessment base | Social security |
| Paternity leave | 2 weeks within 6 weeks of birth at 70% of the daily assessment base | Social security |
| Parental leave | Until the child turns 3; state benefit up to CZK 350,000 total (CZK 700,000 for multiples) | State |
| Care leave | Up to 9 days (16 for single parents) at 60% | Social security |
| Bereavement leave | Up to 3 days at full pay | Employer |
At least one leave block of two continuous weeks should be taken each year, and unused leave carries over but must be used by the end of the following year. Maternity, paternity, and parental benefits are paid by the state, not by you.
Public Holidays (2026)
The Czech Republic observes 13 public holidays. In 2026 only two fall on weekends (July 5 and December 26), and there are no substitute days off for weekend holidays.
| Date | Holiday |
|---|---|
| January 1 | Restoration of the Independent Czech State / New Year's Day |
| April 3 | Good Friday |
| April 6 | Easter Monday |
| May 1 | Labour Day |
| May 8 | Victory Day |
| July 5 | Saints Cyril and Methodius Day |
| July 6 | Jan Hus Day |
| September 28 | Czech Statehood Day |
| October 28 | Establishment of Czechoslovak Republic Day |
| November 17 | Day of the Fight for Freedom and Democracy |
| December 24 | Christmas Eve |
| December 25 | Christmas Day |
| December 26 | St. Stephen's Day |
Benefits: Required vs. Common Extras
Statutory (included in employer costs above): public health insurance, pension insurance, sickness insurance, unemployment insurance, and workplace accident insurance.
Toku offers fully sponsored premium healthcare for Czech employees through Canadian Medical. See the Czech Republic Employee Benefits Overview for details.
Common extras in the Czech market include meal vouchers or meal contributions (the most widespread benefit, tax-advantaged up to statutory limits), employer contributions to third-pillar pensions (tax-exempt for the employee up to CZK 50,000 per year), a fifth week of annual leave, and flexible working arrangements. Toku can advise on the cost impact of any of these.
Ending Employment
The Czech Republic does not recognize at-will employment: termination requires one of the grounds listed in the Labour Code, and employees cannot be given notice during protected periods such as sick leave, pregnancy, or parental leave. Involve Toku early so we can establish the right grounds and paperwork. For the process, see How to Terminate an Employee or Contractor.
| Grounds | Notice |
|---|---|
| During probation | None required |
| Organizational changes (redundancy, closure, relocation) | 2 months |
| Health reasons | 2 months |
| Breach of duties, poor performance, or loss of qualifications | 1 month |
Severance applies to terminations for organizational reasons: one month's average salary for under a year of service, two months for 1-2 years, and three months beyond that (12 months where the reason is occupational injury or disease). Statutory severance is exempt from social and health contributions. Employees can challenge a termination in court, so documentation matters; Toku will calculate the full exit cost for you before anything is signed.
Hiring Someone from Overseas?
EU, EEA, and Swiss nationals can work in the Czech Republic without a permit. Third-country nationals typically need an Employee Card (a combined work and residence permit) or an EU Blue Card for highly qualified roles, with processing times of roughly 60-120 days and a labor market test usually required; from 2026, applications must be filed through Czech embassies in the candidate's home country. Talk to Toku before extending an offer to a candidate who needs sponsorship.
Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.