Czech Taxes 2026: Full Guide

2026 Czech Tax Updates

The Czech Republic introduced several tax changes in 2026 affecting freelancers (OSVČ), employees, and companies.

The biggest changes include lower social insurance deposits from July 2026, an adjustment to the first flat-tax band, and higher income tax thresholds.

Here’s what changed in 2026 and what to expect in 2027.

The minimum social insurance deposit decreased from 5,720 CZK to 5,005 CZK in July 2026. Flat-Tax Band 1 also decreased from 9,984 CZK to 9,162 CZK, with the reduction applying retroactively from January 2026.

The changes affect freelancers differently depending on their income.

Freelancers with lower incomes are usually affected most by changes to minimum insurance deposits.

Those with higher incomes generally pay insurance based on their actual income after expenses, so changing the minimum deposit may not affect their final annual payments.

For higher earners, the increased 23% income tax threshold is good news. A larger part of their income stays under the 15% tax rate.

However, the maximum social insurance base also increases, which can mean higher payments for people with the highest incomes.

Freelancers with a trade license as their main activity generally pay monthly social and health insurance deposits, even if they have no income.

These are advance payments. Your final insurance is calculated after the end of the year, based on your actual income after expenses.

If you paid too little, you pay the difference. If you paid too much, the overpayment can be refunded or used towards future deposits.

The table below shows the minimum payments for 2026 and 2027.

The standard minimum social insurance deposit was 5,720 CZK until June 2026 and decreased to 5,005 CZK from July 2026.

New freelancers

When you start a Czech trade license, you can benefit from two different social insurance rules.

Lower monthly deposits: If you haven’t been self-employed in the previous 20 calendar years, you can pay reduced minimum social insurance deposits.

No monthly deposits: If you start or restart your trade license after 31 December 2024 and haven’t been self-employed in the previous five calendar years, you don’t need to pay monthly social insurance deposits during your first two calendar years.

Freelancers with a side activity

If you have a trade license as a side activity while working, studying, or receiving a pension, different social and health insurance rules apply.

For social insurance, you only need to pay if your annual income after expenses reaches a certain amount. This threshold changes every year:

• 2026: 117,521 CZK

• 2027: 123,992 CZK

These amounts apply to a full year of side activity.

If you have a trade license (OSVČ) as a side activity, you don’t pay monthly health insurance deposits during your first year of business.

You pay a one-time balance based on your income after expenses when you submit your annual health insurance report.

Freelancers using the flat-tax (paušální daň) system pay one monthly amount covering income tax, social insurance, and health insurance.

Instead of calculating and paying each separately, you make one payment to the Czech Financial Administration.

Here are the monthly payments for 2026 and 2027.

Band 1 was originally 9,984 CZK in 2026 and decreased to 9,162 CZK in July, with the reduction also applying from January.

Freelancers registered in the flat-tax system do not submit annual income tax declarations or social and health insurance reports if they meet all the conditions.

The monthly payment is due by the 20th day of each month.

Important — Flat Tax Reduction in 2027

The original Band 1 payment for 2026 was 9,984 CZK per month.

From July 2026, it decreased to 9,162 CZK.

Because the reduction also applies from January, freelancers who paid the original amount from January to June have an overpayment of 4,932 CZK.

You can use this amount to reduce a later flat-tax payment in 2026.

If you do not use the overpayment by the end of the year, you can request a refund after the tax year.

The Czech Financial Administration confirmed the reduction and explained how freelancers can use their overpayments. 

For employees, the main changes concern the 23% income tax threshold and the maximum amount of income subject to social insurance.

How does the 23% income tax work?

The higher tax rate applies only to the amount above the threshold, not your entire income.

For example, if your annual tax base exceeds 1,762,812 CZK in 2026, the amount up to this limit is taxed at 15%, and only the remaining amount is taxed at 23%.

Social and health insurance

Employees pay:

• 7.1% social insurance, including 0.6% sickness insurance.

• 4.5% health insurance.

The maximum social insurance base is calculated annually.

Once an employee reaches the annual limit, additional employment income is generally no longer subject to social insurance payments for that year.

The basic taxpayer discount remains 30,840 CZK per year.

For more information, see our existing guide to 15% and 23% Czech income tax.

Spouse Tax Deduction – Conditions in 2026

You can claim a spouse tax discount of up to 24,840 CZK per year if you meet the conditions.

Your spouse must:

• Have annual income of no more than 68,000 CZK, calculated under Czech tax rules.

• Live with you in the same household.

• Live with you and your dependent child under three years old.

The condition involving a child under three was introduced in 2024 and continues to apply in 2026.

The discount depends on how many months you meet the conditions.

You can claim 2,070 CZK for each month when all conditions are met on t

he first day of that month.  

Not all payments received by your spouse count towards the 68,000 CZK limit.

• Parental allowance (rodičovský příspěvek): Does not count towards the income limit.

• Maternity benefits (peněžitá pomoc v mateřství): Count towards the income limit.

This difference is confirmed by the Czech Financial Administration.  

For more information, see our existing guide to Czech tax reliefs, deductions, and bonuses.

In 2026, you don’t pay income tax on cryptocurrency profits and capital gains if you meet the conditions for tax exemption.

For example, cryptocurrency sales are tax-free if you hold the cryptocurrency for more than three years or your total annual sales don’t exceed 100,000 CZK.

Similar tax exemptions apply to investments, including shares.

If your total cryptocurrency sales during the year do not exceed 100,000 CZK, you don’t pay income tax on those sales if they meet the exemption conditions.

The important point is that 100,000 CZK refers to total sales, not profits.

For example, if you bought cryptocurrency for 50,000 CZK and later sold it for 90,000 CZK, the sale is tax-free even if you held the cryptocurrency for less than three years, provided you meet the conditions.

However, if your total sales exceed 100,000 CZK, the exemption based on this limit no longer applies.

You should then check if another exemption applies.

If you hold cryptocurrency for more than three years before selling it, you don’t pay income tax on the sale if it meets the exemption conditions.

However, the exemption does not apply to every type of cryptoasset or transaction.

In 2026, the three-year holding-period exemption for cryptocurrency remains subject to an annual limit of 40 million CZK.

This means holding cryptocurrency for more than three years does not automatically make an entire sale exceeding 40 million CZK tax-free.

For shares and business interests that meet the conditions, the 40 million CZK holding-period exemption limit was removed from 1 January 2026.

This change does not apply to cryptocurrency.

If you do not meet the exemption conditions, your taxable gains must be included in your Czech income tax declaration.

Different rules apply to cryptocurrency used for business, mining, staking rewards, and certain types of cryptoassets.

The Czech Financial Administration explains these exemptions and their exceptions in its official guidance.

Retired Trade License Holders (OSVČ Pensioners)

Retired freelancers in the Czech Republic can have their trade license as a side activity and pay lower social insurance contributions.

Old-age pensioners receiving a full old-age pension can also benefit from a reduced social insurance rate if they meet the conditions.

The standard social insurance rate is 29.2%, but for eligible pensioners, it is reduced to 22.7%. That’s a discount of 6.5 percentage points.

The reduced rate is included in the annual social insurance report (Přehled o příjmech a výdajích) and can also reduce monthly deposits.

For pensioners with a trade license as a side activity, social insurance depends on annual income after expenses.

The income threshold is:

• 2026: 117,521 CZK

• 2027: 123,992 CZK

These amounts apply to a full year of side activity.

If your income after expenses stays below the threshold and you haven’t chosen to pay voluntary pension insurance, you don’t pay social insurance.

If your income reaches the threshold, your social insurance is calculated based on your income after expenses when you submit your annual report.

Czech Taxes for Non-Tax Residents

If you live outside the Czech Republic but earn income from a Czech trade license, you are not automatically a Czech tax resident.

Your tax residency depends on where you live, how long you stay in the Czech Republic, and if you have a permanent home here.

Even if you spend fewer than 183 days in the Czech Republic, you can still be considered a Czech tax resident if you have a permanent home here.

If both the Czech Republic and another country consider you a tax resident, the tax treaty between them explains which country you are a resident of for tax purposes.

Non-tax residents pay the same Czech income tax rates of 15% and 23% on taxable income in the Czech Republic.

However, having a Czech trade license does not automatically mean you must pay Czech income tax on all your worldwide income.

The basic taxpayer discount of 30,840 CZK per year is available to Czech tax non-residents.

Some additional tax benefits have stricter conditions.

For example, certain discounts and deductions are available to EU or EEA tax residents only if at least 90% of their income counted under Czech tax rules comes from Czech sources.

You also need documents confirming your foreign income when claiming these benefits.

Tax residency and insurance obligations are two separate things.

You can be a tax resident of another country and still have to pay Czech social or health insurance, depending on where and how you work.

At Pexpats, we specialize in Czech tax filings for:

• Freelancers (OSVČ)

• Employees and expats

• Business owners and startups

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Common Questions About Czech Taxes in 2026 and 2027