Employer of Record in the Czech Republic
Skuad’s Czech Republic Employer of Record (EOR) solution helps your business expand without the need for an entity setup. Our unified and automated global human resource (HR) platform enables you to expedite the onboarding of your remote team, manage their payroll, benefits, taxation, probation, and termination in compliance with the local laws. In addition, we help you streamline the global expansion process with the able assistance of our international network of experts from over 150 countries. Book a demo with Skuad to kick-start your expansion into Czech Republic.
The Czech Republic at a Glance
Population: 10,671,870 people (2019)
Currency: Czech koruna (CZK)
Gross Domestic Product (GDP): USD 250.686 billion (2019)
Learn more about expanding your business into the Czech Republic by partnering with Skuad.
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Employment in the Czech Republic
What You Should Know Before Employing in the Czech Republic
The International Labor Organization (ILO) governs employment laws in the Czech Republic. The Czech Republic’s labor laws state the process of establishing employment relations in the country.
Let us explore the Czech Republic employment laws to understand the entitlements such as employee benefits, working hours, paid time-offs, and national holidays.
|Employment Contract Law
||It is a legal obligation in the Czech Republic to present your employees with a written employment contract that includes all essential terms of the employment agreement, such as parental leave allowances, salary/wage, sick pay, and working hours. Also, it should be written in Czech and use CZK as the currency.
Additionally, an employment contract should include three key details.
- The type of work
- The place of work
- The starting date
||In the Czech Republic, the standard workweek is 40 hours. Czechs have a penchant for starting work earlier than other cultures, with a typical start time of 7 am. This is not required by law, and many foreign-owned organizations disregard it.|
||Any work beyond the standard working hours is considered overtime. It cannot exceed eight hours a week (or 150 hours a year).
Employees working overtime must be compensated with at least 125% of their average pay.
|The Czech Republic Official Holidays
The Czech Republic has 12 official holidays, each of which is followed by a day off for employees, including,
- New Year’s Day
- Good Friday
- Easter Monday
- May Day
- Liberation Day
- Cyril and St. Methodius
- Jan Hus Day
- Statehood Day
- Independence Day
- Freedom and Democracy Day
- Christmas Eve
- Christmas Day
- Second Day of Christmas/St. Stephen’s Day
|Benefits Management in the Czech Republic
||As an employer in the Czech Republic, you may be responsible for administering benefits packages such as pensions, health insurance, parental leave allowances.
As a foreign company, establishing and administering a benefits system for your Czech employees may be challenging, and you will need to be acquainted with local traditions and employment regulations. Because the procedure may be lengthy, it is recommended to seek expert counsel if you are uncertain.
|Bonus in the Czech Republic
||The 13th-month bonus is considered a free charge and is not mandatory under local legislation in the Czech Republic. Bonuses based on performance are increasingly prevalent.
|Vacation Leave in the Czech Republic
||In the Czech Republic, employers must offer at least four weeks of vacation time each year to their employees.
Numerous companies provide additional perks in their benefits packages, and employees may want to renegotiate additional compensation during the recruiting process.
||In the Czech Republic, employers are not obliged to compensate employees for the first three days of sick leave. Employers must pay 60% of the regular wage after the third day (up to 21 days). Payments to employees are state-funded after this (and up to 380 days of absence).
||Pregnant employees are eligible for 28 weeks of maternity leave, or in the case of multiple births, for 37 weeks.
Leave may begin six to eight weeks before the estimated due date. During this period, the Social Security Administration pays the employee maternity benefits equal to 70% of the employee’s assessed wage.
Other benefits include:
- Parental Leave: Until the child reaches the age of three, one of the parents is also entitled to parental leave.
- Care Leave: Employees may take care of children under ten years of age and are entitled to up to nine days of care leave if a sick family member cares for them.
- Parental Allowance: The Labor Office pays a parental allowance of CZK 300,000 per child up to the age of four years, irrespective of income.
|Health Insurance in the Czech Republic
||Employers are required to pay 9% of each employees’ income to the state’s health insurance funds. There is no upper limit on the wage base for health insurance purposes.
|Employee Protection and Anti-discrimination Rights
||The Anti-discrimination Act of 2008 provides that no employee should be denied the right to, access to, services of, and benefits of employment, based on,
- Sexual orientation
- Union membership
|Data Protection and Confidentiality of Personal Information
||This law stipulates that third-party organizations cannot use the employees’ personal information unless they have free, specific, informed, and unambiguous consent.
The only exceptions to this are,
- In a vital emergency such as a life-or-death situation
- Due to a legal obligation
- For a matter of crucial public interest
- For conducting a contract to which the employee is party
To ensure your expansion endeavors are in compliance with the Czech Republic employment laws, Contact Skuad today.
Contractors Vs. Full-time Employees
Employment contracts in the Czech Republic are duration-based. The two types of employment contracts are,
- Indefinite duration contracts
- Temporary duration contracts
When the workers continue to work after the expiry of the temporary duration, the contract becomes permanent. If a fixed-term contract is renewed for longer than three years with the same employer, it is considered permanent automatically.
However, a fixed-time contract is only permitted for objective or material reasons when a limited duration task must be performed.
All contracts should be in writing. They should contain the following three details.
- Starting date
- Type of work
- Place of work
There are several advantages to hiring contractors and full-time employees.
- Flexibility: Since contractors are hired on a short-term basis, you are free to determine the scope of their work temporarily. If new needs arise, further contracts can be drafted in the short term.
- Independence: Short-term contractors usually work independently. They do not require close supervision and your resources can be transferred elsewhere, as needed.
- Cost: Hiring contractors may be cheaper in the long run, although their individual rates are higher than those of full-time employees. This is because such employees are not entitled to employment benefits such as bonuses and tax compensations.
- Loyalty and organizational commitment: Full-time employees are likely to be more loyal as they exclusively work for your company. As their individual success depends on the performance of your firm, they are likely to invest more effort into their work.
- Knowledge: All employees undergo training when they join a firm. The skills and knowledge gained by a full-time employee, however, stay within the organization.
- Legal freedom: Since full-time employees are defined as such in their contracts from the outset, misclassifications can be avoided completely. When hiring full-time employees, you determine the terms of the contract and entitlements, and these are not liable to change unless mutually decided by both parties.
Learn more from Skuad experts about the pros and cons of hiring contractors and full-time employees in the Czech Republic.
Hiring in the Czech Republic
Hiring employees in the Czech Republic is a tedious process, as it requires you to scout for the right talent, vet the candidates, conduct screening and interview rounds, and recruit them. An EOR service such as Skuad can take care of all compliance-related matters for you while providing you with a pre-vetted pool of talent from which to hire.
Most employers in the Czech Republic advertise for job openings in newspapers such as Metro. However, the most popular platform for job postings is websites and online portals, including,
Additionally, the hiring policies strictly prohibit discrimination on the grounds of,
- Sexual orientation
- Union membership
The best way to onboard employees is by outsourcing the hiring process according to the Czech Republic employment compliance requirements. As expansion into a new country is not a simple matter, companies need to put significant effort into business operations, sales, and other HR-related factors. An EOR service such as Skuad can save you time, labor, and resources, allowing you to focus on the business side of expansion in the Czech Republic. Talk to Skuad experts to know more.
Probation & Termination in the Czech Republic
In the employment contract, the employer may include a probationary term of up to three months. The duration of the probationary period is determined by the nature of the job. Although it can be shortened, it cannot be extended past three months.
An employment contract may be ended by
- Instant termination
- Termination during the probationary period
If the contract is terminated by the employee, they must serve a notice period of two months.
The employer may also terminate the contract. However, the conditions for doing so must be specified.
If an employee is dismissed on “organizational grounds,” they are entitled to the following severance pay.
- One month’s pay if the employer-employee relationship lasted less than a year.
- Two months’ pay in cases when an employer and employee relationship lasted at least one year but less than two years.
- Three months’ pay in cases when an employer and employee relationship lasted at least two years.
To ensure your expansion endeavors adhere to the laws regarding probation and termination in the Czech Republic, talk to Skuad experts and book a demo today.
EOR Solution in the Czech Republic
Establishing a successful enterprise in a different country requires expert intervention, as it is nearly impossible to know the varied compliance policies of the country. With their team of experts, EOR services can simplify your task of conducting business globally. Their extensive research on the country’s laws and HR policies ensures business expansion at a faster pace. An effective EOR service manages the entire life cycle of the employees. They handle complex HR-related matters and let you focus on your core task. Employers of record companies in the Czech Republic facilitate hassle-free business expansion.
Payroll Outsourcing in the Czech Republic through an Employer of Record
Hire talent from all over the world and improve your business prospects with Skuad’s platform for managing globally distributed teams. Skuad has a high-tech, unified HR platform for businesses to manage and pay their remote teams. Some of Skuad’s primary functions are,
- Talent discovery: We discover exceptional talent and skill to onboard the employees for the companies.
- Updated EOR: The tech-enriched HR platform enables seamless and easy control over the hiring procedure, including onboarding, paying, and managing the hiring process.
- Local compliance: Not limited to the hiring process only, we release you from the hassle of complying with the local laws to create entities and manage tax.
- Conducting formalities: We help in creating a suitable employment contract, following all the legal provisions of the land, and ensuring an easy collection of documents for taxation.
We can offer tailor-made EOR solutions for all your expansion needs in Czechia. To avail yourself of our services, speak to Skuad experts today.
Types of Visas in the Czech Republic
Whether for relocating employees or hiring new employees, the employers and employees must make sure that they have a work visa that complies with the country’s labor laws. There are different visas that the Czech Republic offers for people willing to enter the country. These are as follows.
This is a short-term visa issued for,
- Medical treatment
- Visits by invitation
- Official or political reasons
- Scientific research
- Seasonal employment
A long-term visa is issued for,
- Medical treatment
- Visit by invitation
- Official or political reasons
- Studies, internship, or volunteering
- Working holiday
- Seasonal employment
These are issued for,
- Employment, in the form of an Employee Card, Blue Card, or Intra-Corporate Transfer Card
- Family unification
- Scientific research
|Documents Required for obtaining a work visa in the Czech Republic
||The following documents are required to obtain a work visa in the Czech Republic.
- Visa application form that is duly filled by the candidate
- Recent passport-size photo
- Passport having a validity of at least six months
- Copy of the applicant’s passport’s main page
- Offer letter from the company registered in the Czech Republic with signatures of the company’s legal representative and information about the job position.
- Payment slip of visa fee
|Procedure to get a work visa
||The steps for getting a work visa are as follows.
- The foreign national must begin by filling up the visa application form and collecting all the documents required for the processing of the work visa.
- When the paperwork is complete, the applicant should reach out to the consulate, the embassy, or the diplomatic representative of the
- Czech Republic to schedule an interview for further process.
- The applicant will then have to give the interview and can expect questions regarding the reason for entering the country.
- The processing of the applicant’s visa will start soon after the interview and can take 15 to 20 days.
- The employee can start working in the Czech Republic once they receive the visa.
As an EOR service for the Czech Republic, Skuad takes care of all the requirements and responsibilities related to employment, including applying for and obtaining visas. Get in touch with Skuad experts to learn more.
Work Permits in the Czech Republic
People with temporary or permanent visas can work in the Czech Republic. Anyone who completes the visa application process and provides all the documents mentioned in the above section can get work permits in the Czech Republic.
The Czech Republic work permits for foreigners can be obtained by presenting the documents required for work visa processing to the consulate. However, if the worker wants to stay for a long time, they must apply for a long-term residence visa.
Apart from the above documents, the worker might require documents specific to the job role or the activity they will engage in the country. As the employer, you have to submit the following documents on your employees’ behalf.
- Identity proof
- Permanent address proof
- Identification information of the company
- Details on the location, duration of work, and kind of work
- Declaration of employment (employment guarantee)
- Copies of academic and professional degrees and certificates, duly notarized
- Admission fee payment receipt
Securing work permits is an essential task of Skuad’s EOR services. Partner with us today to expedite your expansion in the Czech Republic. To learn more, book a demo.
Payroll & Taxes in the Czech Republic
Payroll in the Czech Republic
To recruit employees in the Czech Republic and manage their compensation and other benefits following the local labor legislation, foreign companies must set up a payroll. This can be done in one of the following four ways.
- Incorporating a separate legal entity and handling the payroll management internally with an in-house HR department.
- Setting up a remote payroll by adding your Czechian employees to your parent company’s payroll.
- Payroll outsourcing in the Czech Republic in collaboration with a local company that handles HR tasks but leaves you in charge of liabilities.
- Payroll outsourcing in the Czech Republic with a global EOR service such as Skuad, which can handle your payroll while ensuring total compliance with the local laws.
|Financial year-end date
|| April 1, each year
|Employer contribution toward Social Security
|Employer contribution toward Health Insurance
To understand how payroll and taxes are managed in the Czech Republic and expedite your expansion process, talk to Skuad experts and book a demo.
Bonuses are popular, with a 13th month bonus and performance-based remuneration being awarded.
Incorporation: How to Set Up a Subsidiary in the Czech Republic
If you wish to expand into the Czech Republic, the first step would be to set up a subsidiary, without which the company cannot make a legal presence in the country. There are several factors that you must consider to expand your business in the Czech Republic. The steps for setting up a subsidiary in the Czech Republic are as follows.
Know more about setting up a subsidiary in the Czech Republic with Skuad’s potent EOR solution.
Professional Employer Organization (PEO)
A professional employer organization (PEO) in the Czech Republic manages all HR-related functions, such as employee benefits, payroll management, taxes, and risk management. A PEO firm acts as a co-employer while an EOR firm acts as a legal employer.
Although an EOR service provides similar services to companies, there are certain differences between the two.
- EOR companies become the legal employers of employees instead of the co-employers. An EOR firm has all the liabilities and responsibilities of the employees. A PEO retains your organization as the legal employer.
- With EOR solutions, the employees are covered with the insurance plan of the EOR firm. With a PEO, you will have to opt for a plan by yourself.
- With an EOR firm, you need not register your company in the country or set up an entity. The same is not true for a PEO.
Skuad's EOR solution is a good way to expand your business in Czech Republic without setting up a separate entity. Our solutions help you to stay focused on your business and leave all business compliances, payroll processing and complete management work to us. Connect with Skuad to know more.
Conclusion: What Gives Skuad’s Czech Republic Solutions an Edge?
Expand your business into the Czech Republic while complying with all the labor laws of the country with Skuad’s effective EOR solution! We help you handle the complexities of business expansion with ease and create a profitable business enterprise by creating a global presence.
With a pool of pre-vetted, “ready to hire” talent, Skuad offers to set up a team for you without delay and expedite your expansion. We can take care of all HR tasks for you, including recruitment, hiring, onboarding, payroll, taxation, probation, termination, visa, work permits, and setting up a subsidiary. All our operations are conducted on our high-tech, unified HR platform, and we have a strong network in over 150 countries.
We offer consistent prices irrespective of the location and manage the payment of your team through a single invoice. We also ensure that your IP, invention rights, and sensitive employee details are fully protected wherever you operate.
Book a demo with Skuad experts today to know all about expansion to the Czech Republic.