Czech Republic Tax Calculator 2026

Czech income tax 15% on gross income up to CZK 1,762,812/year (roughly CZK 147k/month gross). Applies to most Czech workers. After basic credit CZK 30,840, effective rate even lower. Competitive rate attracts foreign investment and talent to Czech Republic.

Czech progressive rate 23% only on income ABOVE CZK 1,762,812. Not entire income! Example: CZK 2M income = CZK 1,762,812 @ 15% (CZK 264,422) + CZK 237,188 @ 23% (CZK 54,553) = CZK 318,975 tax. Then deduct basic credit CZK 30,840 = CZK 288,135 final tax (~14.4% effective rate). Czech tax rates very competitive EU.

Czech basic credit CZK 30,840 (2026) reduces final tax for all taxpayers. Not income deduction but direct tax credit. Ensures lower earners pay minimal tax. If calculated tax below CZK 30,840 → no tax. Czech tax credit system different from allowances - reduces tax after calculation.

Czech top rate 23% compared to: Germany 45%, Austria 55%, Poland 32%, Slovakia 25% (2024 was 19-25%). Czech Republic competitive tax destination Central/Eastern Europe. Lower than Western Europe but higher than Bulgaria 10% or Hungary 15% flat.

Czech 60/40: deduct 60% income as business expenses automatically. No need prove or document expenses. Remaining 40% = taxable income. Then apply 15% or 23% rate plus social/health contributions. Example: CZK 1M gross revenue → CZK 400k taxable → CZK 60k tax (15%) + CZK 116.8k social + CZK 54k health = CZK 230.8k total (23% effective).

Czech 60/40 best when: low real business expenses (consultants, developers, designers), want simple accounting, don't want track receipts. If actual expenses >60% income, better use actual expenses method. Can switch methods year to year. Most Czech freelancers use 60/40 for convenience.

Czech 60/40 applies to: trade license income (živnostenský list), certain self-employment. NOT for: rental income (30% limit), employment income, hobby income. Must have proper trade license (OSVČ registration) to use 60/40.

Czech actual expenses: deduct real documented business costs (office rent, equipment, travel, etc). Better if expenses >60% revenue. Requires receipts, accounting, more administration. Example: CZK 1M revenue, CZK 700k expenses → CZK 300k taxable vs CZK 400k with 60/40 → saves tax.

Czech paušální daň Band 1 for freelancers with annual turnover under CZK 500,000. Pay CZK 9,984 monthly (includes income tax + social + health). Total CZK 119,808/year. No receipts, no accounting. Profitable if actual income near upper band limit.

Czech lump-sum Band 2 for CZK 500,000-1,000,000 annual turnover. CZK 16,745 monthly (CZK 200,940/year total). Covers all taxes and insurance. Suitable medium-income freelancers.

Czech paušální daň Band 3 highest tier: CZK 1M-2M turnover. CZK 27,139 monthly (CZK 325,668/year). For higher-earning freelancers still want simplicity. Above CZK 2M must use standard taxation.

Czech paušální daň advantages: no bookkeeping, no tax return, predictable costs, time savings. Best for: stable income near band limit, hate accounting, value simplicity over optimization. Disadvantages: pay even if low income months, might pay more than standard 60/40, limited to CZK 2M turnover.

Czech lump-sum tax excluded: employees (must be only self-employed), partnerships, companies (s.r.o.), certain regulated professions, those with employees. Check eligibility before choosing.

Czech employees pay 11% gross salary: 7.1% social security (pension 6.5%, unemployment 0.6%), 4.5% health insurance. Deducted automatically by employer. Maximum CZK 2,350,416/year cap for social (no cap health). Above cap only health insurance continues.

Czech employer pays 33.8% gross salary additionally: 24.8% social security (pension 21.5%, unemployment 1.2%, sickness 2.1%), 9% health insurance. NO cap on health 9%. Employer cost example: CZK 50k salary + CZK 16,900 contributions = CZK 66,900 total.

Czech self-employed minimum: CZK 5,720/month social security (29.2% of min base), CZK 3,306/month health (13.5% of min base). Total CZK 9,026/month minimum regardless income. Actual contributions calculated from 50% taxable income (after 60/40 rule if used). Maximum CZK 2,350,416/year cap social.

Czech side-business (vedlejší činnost): lower minimum CZK 1,574 social if also employed elsewhere. Exemption if income below CZK 117,521/year (calculation base) - no social security paid at all. Health insurance still required.

Czech company dividends: 15% withholding tax (WHT) deducted at source. Final tax - no additional income tax. Simple for shareholders. Company pays net dividends after withholding. Czech dividend tax among lower EU rates.

Czech tax on foreign dividends (non-Czech source): taxpayer chooses: (1) Include in general tax base 15%/23% progressive - can use allowances/credits, OR (2) Separate 15% flat base - no allowances but lower rate if high income. Most choose separate 15% for simplicity.

Czech capital gains from shares, bonds, funds: included in general income tax base 15% or 23%. No separate capital gains tax. 2026 change: CZK 40M exemption for business shares CANCELLED. Must declare and pay income tax on gains.

Czech real estate gains exempt if: held 10+ years (investment property) OR 5+ years (main residence) OR 2+ years main residence AND immediately buy new main residence. Otherwise taxed 15/23% as income. Significant exemptions encourage homeownership.

Czech cryptocurrency: trading gains taxed 15/23% as income. Exemption if: held 3+ years AND not acquired by mining/business/trading. Casual sales <CZK 100k/year also exempt. Mining = business income 15/23%. Czech crypto rules relatively clear.