INCOME TAX Payroll hours worked tariff Average salary

INCOME TAX

Payroll hours worked tariff Average salary holiday food Tariff+bonus+holiday bonus Tax 15 % Net salary Social and health insurance

Employment • Contract • Form „Prohlášení poplatníka daně z příjmu fyzických osob ze závislé činnosti“ – statement about income tax (credit for a taxpayer)

Concepts I. • Gross wage – tariff + personal evaluation + (bonus) • Social insurance – it is paid monthly – employee 9, 5 % of gross wage – employer 25 % of gross wage • Health insurance – it is paid monthly – employee 4, 5 % of gross wage – employer 9 % of gross wage

Concepts II. • Tax – 15 % from gross wage + social and health insurance paid by employer • Example: CZK gross wage 1 000 social insurance employee 9, 5 %from 1 000 = 95 employer 25 % from 1 000 = 250 health insurance employee 4, 5 % from 1 000 = 45 employer 9 % from 1 000 = 90 amount for calculating the tax 1000 + 250 + 90 = 1 340 tax 15 % from 1 340 = 201 net wage 1000 -95 -45 -201=659

Rules • tax and insurance is paid monthly for employees by the employer • Every person, who has an income, can apply „tax rebate (discount)“ – it is 2 070 CZK per month and it is not divided • Other discounts: – Student – for every month of study 335 CZK – Wife/husband without incomes – 2 070 CZK per month – Children – 1 117 CZK per month first child, 1 417 CZK per month second child and 1 717 CZK per month third and other child

Tax rebate (discount) • A basic tax rebate, which can be applied by every taxpayer, is a taxpayer's discount. The tax will be reduced by CZK 24 840 per year, while we are entitled to apply the full discount, regardless of whether we have earned it any time. We will apply the discount in the tax return for income tax. • The benefit will be used whole, regardless of whether we have earned a whole year or only a part.

Resident 1. Issue ¹Resident of one Contracting State ª Denotes for each of these contracts any person who is subject to the legal provisions of this Statute in this statist of tax residence of your domicile, residence, management center or any other similar criteria. This statement does not, however, include a request a person who is subject to taxing in this database only on the basis of the income from the sources in this station or property there. 2. If a natural person is subject to the provisions of paragraph resident of both Contracting States shall be its determined in the following way: (A) it is assumed that person is a resident of that State in which there is a flat; If she has flat in both stations, it is assumed that he is a resident that State, to which the person and the Relationships; B) if it is not possible to determine which one zhis person has his or her lifelong livelihoods, or if there is no permanent apartment at the given stadium, it is anticipated he is a resident of that state in which usually delays.

Pension insurance • Persons participating in this insurance are provided in life situations such as old age and invalidity. At that time, the claimant is entitled to the payment of pension benefits.

Pension insurance

Income tax return I.

Income tax return II.

Income tax return III. Line 1 PZP Line 22 +23 Line 6 PZP Line 24 rounded down to whole hundreds 15 % from line 32 24 840 CZK Line 33 – line 36 (can´t be less than zero)

Income tax return IV. Line 9 PZP Line 33 – line 52

Example • • Employment May 1 to December 31 Gross wage 120 000 CZK Social and health insurance 40 800 CZK Tax 24 000 CZK

120 000 40 800 160 800 24 000

Income tax return – example I. 120 000 160 080 40 080 160 000 24 840 0

Income tax return – example II. 24 000 - 24 000

Important links • https: //adisepo. mfcr. cz/adistc/adis/idpr_epo/ epo 2/uvod/vstup_expert. faces • http: //www. mfcr. cz/cs/legislativa/dvojizdaneni/prehled-platnych-smluv = contract´s overview

When to submit tax return form • Compulsory for person, who has during the year more than one employer • Compulsory for person, who has incomes from other acitivities – business – lease