Article updated on July 2, 2026
This page provides an overview of the main current tax rates and mandatory payments in the Czech Republic for sole traders (OSVČ), entrepreneurs in the flat-rate tax regime (paušální režim), employers, and VAT payers (DPH).
The data is current as of July 1, 2026. This information is for reference only. In a specific situation, the amount payable may depend on income, type of business activity, tax regime, and any advance payments already calculated.
Sole Traders (OSVČ)
A sole trader in the Czech Republic (OSVČ) may operate under the standard tax regime or under the flat-rate tax regime (paušální režim). Under the standard regime, personal income tax, social insurance, and health insurance are paid separately. Under the flat-rate regime, these payments are included in one monthly payment.
- Sole Traders (OSVČ) under the Standard Regime
Under the standard regime, a sole trader pays three main types of mandatory payments. The minimum advance payments listed below apply primarily to entrepreneurs for whom business activity is their main activity (hlavní činnost). If the business activity is a secondary activity (vedlejší činnost), or if advance payments have been calculated individually, the amounts may differ. If you have any questions, it is advisable to consult an accountant or tax adviser.
| Payment | Current rate or amount |
| Social insurance (sociální pojištění) | minimum advance payment of 5,005 Kč per month |
| Health insurance (zdravotní pojištění) | minimum advance payment of 3,306 Kč per month |
| Personal income tax (daň z příjmů fyzických osob) | 15% and 23% |
Personal income tax (daň z příjmů fyzických osob) is not calculated on turnover, but on the tax base (základ daně). The tax base is determined after expenses have been taken into account. Expenses may be actual expenses or flat-rate expenses, if the entrepreneur is entitled to apply the flat-rate expense deduction (výdajový paušál).
In 2026, the 15% rate applies to the part of the tax base up to 1,762,812 Kč per year. The 23% rate applies only to the part of the tax base that exceeds this limit. This means that the higher rate does not apply to the entrepreneur’s entire profit, but only to the amount above the statutory threshold.
Social insurance (sociální pojištění) is also subject to a maximum assessment base for calculating insurance contributions (maximální vyměřovací základ). In 2026, this limit is 2,350,416 Kč. Social insurance is no longer charged on the part of the assessment base above this amount.
It is important not to confuse the tax base for personal income tax with the assessment base for social insurance (vyměřovací základ). These amounts are calculated according to different rules, so in the case of higher income or individually calculated advance payments, it is advisable to check the payments with an accountant or tax adviser.
- Sole Traders (OSVČ) under the Flat-Rate Tax Regime (paušální režim)
The flat-rate tax regime (paušální režim) allows an entrepreneur to make one monthly payment instead of separate payments for income tax, social insurance, and health insurance.
In 2026, there are three bands of the flat-rate tax regime (pásmo).
| Band | Total monthly payment | Payment breakdown |
| 1st band (1. pásmo) | 9,162 Kč | income tax — 100 Kč, social insurance — 5,756 Kč, health insurance — 3,306 Kč |
| 2nd band (2. pásmo) | 16,745 Kč | income tax — 4,963 Kč, social insurance — 8,191 Kč, health insurance — 3,591 Kč |
| 3rd band (3. pásmo) | 27,139 Kč | income tax — 9,320 Kč, social insurance — 12,527 Kč, health insurance — 5,292 Kč |
The choice of band depends on the entrepreneur’s income, type of business activity, and applicable expense percentage. The flat-rate tax regime itself is not always more advantageous than the standard regime, so it is important to compare both options before making a decision.
Employer Contributions in the Czech Republic
An employer in the Czech Republic pays mandatory contributions for an employee on top of the employee’s gross salary. These contributions include social insurance (sociální pojištění) and health insurance (zdravotní pojištění).
| Employer contribution | Rate |
| Social insurance (sociální pojištění) | 24.8% |
| Health insurance (zdravotní pojištění) | 9% |
| Standard total employer burden (odvody zaměstnavatele) | 33.8% |
These payments are an employer expense and are calculated on top of the employee’s gross salary. They are not the same as deductions withheld from the employee’s salary.
In certain cases, special rules may apply, for example for some categories of employment relationships or high-risk professions.
VAT Rates (DPH) in the Czech Republic
In 2026, two main value added tax rates (DPH) apply in the Czech Republic.
| Type of VAT rate | Rate |
| Standard VAT rate (základní sazba DPH) | 21% |
| Reduced VAT rate (snížená sazba DPH) | 12% |
The standard rate applies to most goods and services. The reduced rate applies only to specific goods and services where this is expressly provided for by law.
For services subject to the reduced VAT rate, Annex No. 2 to Act No. 235/2004 Coll., on Value Added Tax (příloha č. 2 k zákonu o dani z přidané hodnoty), applies. For goods subject to the reduced VAT rate, Annex No. 3 to the same Act (příloha č. 3 k zákonu o dani z přidané hodnoty) applies.
The current list of goods and services subject to the reduced VAT rate can be checked in the Czech version of the Act: https://www.zakonyprolidi.cz/cs/2004-235#f2551483
Dividend Tax
Dividends in the Czech Republic are subject to withholding tax at a rate of 15%. This rate applies, for example, when dividends are paid to individuals who are Czech tax residents.
For legal entities, an exemption may apply if the statutory conditions are met, for example in parent-subsidiary relationships. When dividends are paid to non-residents, the rate is also generally 15%, but it may be reduced under an applicable double taxation treaty. In certain cases, for example when payments are made to non-cooperative jurisdictions, an increased rate of 35% may apply.
If you are not sure which rates and payments apply to your specific situation, consult an tax adviser or accountant. The specialists at DoMyTax can help review your obligations, set up payments correctly, and avoid mistakes in taxes, social insurance, and health insurance contributions.
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