Abolition of the super-gross salary:
Taxation on the so-called super-gross salary. From 1 January 2021, only the gross salary of the employee will be used for the calculation of the tax, without taking into consideration the insurance premium paid by the employer. This change would therefore be reflected only on the amount of income tax.
Higher discount per taxpayer:
The Senate further adjusted the increase in the taxpayer allowance to CZK 27,840 in 2021 and to CZK 30,840 in 2022.
Change in the solidarity amount of tax:
The tax rate of 23 percent was newly approved. This should be applied to the part of the tax base exceeding 48 times the average wage (CZK 141,764 per month). The current wording of the Act provides for a joint and several tax increase only for persons who have income from employment (income pursuant to Section 6 of the Income Tax Act) or self-employed activities (income pursuant to Section 7 of the Income Tax Act). However, the new tax rate of 23 percent will also affect taxpayers who have rental income or capital income.
Abolition of the tax bonus maximum:
The tax bonus arises when applying a tax benefit (discount) to children in an amount exceeding the calculated tax. Until now, families with more children have been able to claim a tax bonus of up to CZK 60,330 per year. This limit has been abolished as part of the approved tax package.
Meal package:
From January, this will offer employers a tax-reduced meal allowance package as a simple and cheap alternative to meal vouchers. Employers will now be able to provide a meal allowance in cash. According to the new wording of the law, the cash contribution provided by the employer to employees for meals is considered as exempt income up to 70 percent of the upper limit of the meal allowance in value of CZK 75.60 per shift, which can be provided to employees remunerated for a 5 to 12 hour business trip.
Minimum wage:
The minimum wage for working hours of 40 hours per week is set at CZK 15,200 per month and CZK 90.50 per hour for 2021.
New rules for holidays calculation:
The amendment to the Labor Code brought about a fundamental change in the legal regulation of leave, specifically the method of determining it. The calculation and the actual use of leave will thus, with effect from 1 January 2021, be based on the hourly regime of weekly working hours. The amendment cancels the holiday for days worked. The purpose is to set a fairer determination of the length of leave.
Leave for a calendar year, its proportional part and additional leave remain part of the ZP. The above-mentioned types of leave that will be maintained will therefore be expressed in hours corresponding to the employee’s weekly working hours.
The amendment to the Labor Code will not affect the conditions for the creation of the right to leave. These remain almost unchanged.
Cancelled:
Holidays for days worked
Reducing leave for obstacles at work
The need for the employment relationship to last the entire calendar month for the occurrence of 1/12 of the claim
New:
Simple and fair calculation of leave
Transfer of leave
Scheduled weekly working hours and agreed shorter weekly working hours
The conditions for entitlement to a proportional part of leave belong to an employee who has been working for employer in the relevant calendar year for at least 4 weeks, of a continuous duration of employment with the same employer.
The amendment to the Labor Code no longer provides for the subsequent reduction of leave in the event that the employee has not performed work due to obstacles at work, which are not considered work, for a period of 100 or more shifts. On the other hand, it is newly stipulated that obstacles at work are recognized as work performance, but only up to twenty times the set or agreed shorter weekly working hours in a calendar year, provided that the employee has worked at least twelve times the set or agreed shorter weekly working hours. All obstacles at work are thus either counted or not included in the number of hours worked by the employee, which corrects the resulting length of leave.
Source: ASB Group
