The Czech government has finally agreed to allow companies to defer payments for social security and health insurance for the months of May, June and July. It’s a move designed to allow companies to concentrate their available cash on covering their wage bill that many managers said would be more useful than the complicated process of applying for low interest loans from the state. Companies that make late payments usually pay a penalty of 18 percent interest. In this case, those that manage to make up the missed payments by September 20 will pay just 4 percent annualized interest. Social payments will continue to be withheld from employee payslips, however. Industry associations had lobbied for companies that suffered clear losses because of the government’s restrictive measures could be forgiven part or all of the social payments, but the Ministry of Finance argued this would harm the state’s social security system.
