Employee Net / Gross Salary in Czech Republic
Social- and Health Charges on Salaries, Employer's part and Employee's partAn employee contract will normally show the gross salary and the employer (the company) is obligated to withhold a certain part of your gross salary (hrubá mzda):
- Employee's part social charges (6.5%),
- Employee's part health charges (4.5%),
- Employee's part income tax (15%, over 1.2 M 22%).
What you get on your bank account is the net salary (cistá mzda), which is about 3/4 of the gross salary for an average pay (see table below).
On top of your gross salary the employer is paying his part in social charges (25%) and health charges (9%).
All those sums together form the so-called 'super-gross' (superhrubá) salary, which is almost twice the net salary and 34% more than the gross salary.*
For this reason, many companier use the 'Schwarz-system', hiring people on živnostenský list instead of employing them. Invoicing the 'gross salary' results in a much higher 'net salary' and the employer does not pay the 'super hruba' part. In theory, the social office could issue a penalty if they decide the external worker is in fact a fulltime employee. However, we have yet to come across such a situation, so the risk is quite small and only in very specific cases
Examples of Net, Gross & Supergross amounts for Czech salaries - 2014