Trade License Tax Calculator 2024 / 2025

Eliminate the guesswork from your tax return with the Czech Trade License Tax Return Calculator! This online tool helps self-employed OSVC taxpayers calculate net income, Zivnost taxes, social security and health insurance. It works for any type of self-employed business and entrepreneurship activities on a Zivno trade license. That includes claiming main income, secondary income, student income, or maternity income when filing the Zivno tax return. Simply choose the income you are claiming on your trade license, fill in your information, and calculate your return.

This calculator precisely calculates annual net income, taxes, social security, and health insurance payments on a trade license. First, choose if you are calculating trade license main income, secondary income, student income, or maternity income. The calculator will automatically apply tax discounts to each category. 

Choose the category before completing your information, and toggle on / off advanced fields for different tax relief, discounts, and bonuses you are eligible to claim. 

Note: The calculator automatically deducts the standard taxpayer’s discount available for all tax returns from income tax calculations. In the 2024 tax year, this discount is CZK 30,840. This means that if your taxable net income is lower than this amount, the total income tax you owe is zero.

Choose “Main Income” (in Czech, “hlavní činnost”) on the calculator if your only source of taxable income is from your Zivno. This is for taxpayers who have no income other than income from their trade license to claim. If you are earning extra income on a trade license while also on an employee contract, choose “Secondary Income” (in Czech, “vedlejší činnost”).

Click “Student / Maternity” on the calculator to automatically change the calculation results to claim student or maternity income on an OSVC tax return. The calculator takes into account individual discounts which apply to students and maternity benefits. Find explanations of each deduction in the payment results after pressing calculate.

The 60/40 method provides an expense allowance for 60% of gross annual income to taxpayers. In this case, the taxpayer will not need to provide any invoices to prove real expenses. Instead, they simply deduct 60% from gross income, and the remaining 40% is taxable. Note that this method is only applicable to earning under CZK 2 million per year.

In 2024, the social tax income limit is CZK 105,520 for students as well as pensioners and parents on maternity leave. If your annual net income is lower than this amount, you will owe zero social tax. Note: Keep in mind that your annual taxable income is 40% of your gross annual income when using the 60/40 method. If you are still earning above the limit after using the 60/40 method, you must pay social tax in full, and start making monthly advance deposits.

To register for social tax, you will need to submit an official application at the Social Tax Office.

Freelancers (trade license holders) in the Czech Republic pay either 15% or 23% income tax depending on total annual net earnings. A tax rate of 15% applies to income under CZK 1 582 812, while 23% applies to earnings over this threshold. This amount is the tax base, which taxpayers further reduce by the standard taxpayer’s discount, or claiming additional tax credits and deductibles.

In the first year of a trade license, you pay only the minimum monthly social security and health insurance deposits. At the end of the year, you may then need to pay a balance depending on the amount of income earned. 

In 2024, social security will require 29.2% from half of annual clean income. Health insurance will be 13% from half of annual clean income. This means, if your earnings are higher than what the minimum deposits cover, it’s smart to pay higher deposits voluntarily. This will help to offset any final balance remaining at the end of the year.

Students earning less than CZK 105,520 net annually do not pay contributions to social tax.

Taxes for students working on a Zivno are the same as for all OSVC trade license holders. Students are eligible to use the 60/40 method, and have a tax rate of 15 or 23 percent. Student income is also filed as “secondary income” (in Czech, “vedlejší činnost”), with the minimum CZK 105,520 net income rule.

Also note: student freelancers in the Czech Republic are not eligible for tax forgiveness. However, it is possible to claim a deduction in some cases. From 2024, there will also no longer be a student trade license discount (previously CZK 4,200).

If you just started freelance work or opened for business, you need to register a trade license and officially start invoicing clients. The OSVC trade license (in Czech, Živnostenský list, or in the expat communities “Zivno” / “Zivnost”) is necessary to declare self-employed income. It registers the taxpayer for certain business activities, and provides tax and business identification to invoice goods and services. Ready to start invoicing? Make it easy on yourself with Pexpats’ completely free Online Invoice Generator!

Trade licenses (OSVC zivnostensky list) applications are submitted at the Zivnostensky Urad (Trade License Registration Office). Simply go to one of these offices and submit your completed registration form, and pay the administrative fee.

To open a trade license, applicants must provide a valid passport, application form, and supporting documents. Want to make it easy on yourself? Use Pexpats’ Official Document Generator to download the Czech Zivnostensky List Application Form.

No - EU citizens do not need any form of Czech residency to apply for the Zivno Trade License.

If you just opened a trade license, you must file a Zivnost income tax report at the end of every taxable calendar year. This involves declaring all taxable income from the previous year, and reporting advance deposits to social security and health insurance. After filing, you must then pay income tax as well as any remaining balance to social and health (if any).

It’s possible to deduct any business expenses from your income tax report, but only if you claim ‘real expenses’. In this case, you cannot use the 60/40 method, so it’s important to think about if your real expenses are higher than 60% of your gross income. And usually, this is not the case for most trade license holders such as teachers, consultancy, sales, and IT industries. These professions tend to have less business expenses, making the 60/40 method more affordable.

“Tax discounts” are any deductibles which reduce a taxpayer’s total income tax. Take for examples the standard taxpayers’ discount, life insurance payments, mortgage interest rates, and claiming a spouse with lower income. Each of these events reduces the total taxable net income on the tax return. A tax credit on the other hand is a refund amount from the financial office depending on your income. One of the most common tax credits is claiming a child under 21 years old. Taxpayers may also use tax credits in replace of tax discounts when filing.

Trade license holders are eligible to claim a maximum deductible of CZK 150,000 for mortgage interest rates relief. Note that this is only for the months in which you have an active trade license and are also paying into a mortgage.

Zivno taxpayers are also eligible to claim tax deductibles for any investments into private life insurance, or private pension and retirement funds. For life insurance, there is a maximum deductible of CZK 24,000. The same amount applies to claims for private pension and retirement savings (within the non-government sector).

The deadline to file a tax return for the previous fiscal year in the Czech Republic falls in March every year. March 31st is thus most often the last day to file, if not filing taxes with a certified tax accountant.

Meet John, an OSVC freelancer marketing consultant earning CZK 600 000 per year and using the 60/40 tax reporting method. In this case, John reports:

• 60% of CZK 600,000 = CZK 360 000 (expenses), and 

• 40% of CZK 600,000 = CZK 240,000 (tax base).

Additionally, John has a wife, Lucy. She is on parental leave, and she and John are raising two children together. Meanwhile, Lucy’s income does not surpass CZK 68 000, so John claims a wife with lower income on the tax return. On top of this, John is paying a mortgage interest rate of CZK 50,000 annually.

What discounts can John claim? Let’s look:

• Standard taxpayer’s discount = CZK 30,840 

• Spouse with income below 68 000 CZK annual = CZK 24,840 

• Tax discount for the first child = CZK 15,204 

• Tax discount for the second child = CZK 22,320 

But what about the payments in mortgage interest fees? These can also reduce the tax base! The final calculation then becomes:

• CZK 240,000 – 50,000 = CZK 190,000

Now, John is looking at:

• 15% tax rate on CZK 190,000 = CZK 28,500 income tax (before discounts)

• CZK 28,500 - 30,840 (the standard taxpayer’s discount) - CZK 24,840 (additional tax relief) = Zero income tax owed.

• Also, as John’s discounts total more than the income tax he should pay, he is entitled to a tax bonus of CZK 15,204 + 22,320 = CZK 37,524.

Not only has John reduced his income tax to zero in this case, he claims money back in his tax return.

Want help filing Zivnost taxes accurately, on-time, and to your advantage? Simplify the entire process with Pexpats’ professional tax accountants and services. Our agents can file taxes on the behalf of both trade license holders or full-time employees, no matter how complex the tax return. We investigate and suggest the best tax regime for each individual case, including claimable tax relief, discounts and deductibles. Just let us know how we can help, and we’ll start on your taxes immediately.