In 2025, the Czech Republic introduced significant updates to its tax laws, especially for freelancers (OSVČ), employees, and businesses. These changes affect income tax thresholds, flat tax bands, health and social insurance contributions, and eligibility for tax deductions. This complete guide breaks down all the updates, based on official information from the Czech Ministry of Finance.
Freelancer (OSVČ) Income Tax in 2025
Czech freelancer taxes remain in two brackets:
15% tax applies to income below CZK 1,676,052
23% applies if your taxable income exceeds CZK 1,676,052
This threshold is based on 36 times the average salary (CZK 46,557/month). It was previously based on 46×.
Spouse Tax Deduction – New Conditions
You can still deduct a spouse earning under CZK 68,000/year, but in 2025, there’s an added condition: The spouse must care for a child under 3 years old. This is a new rule and affects many families claiming this deduction.
Social Security Tax Changes
The calculation base for mandatory insurance contributions has increased. In 2025, it's now 55% of your tax base, not 50%
For example, using the 60/40 flat expense method: If your gross income is CZK 1,000,000 → tax base = CZK 400,000 You now pay social and health based on 400,000 × 55%, not 50%.
Minimum deposit payments in 2025:
Social insurance: CZK 4,759/month
Health insurance: CZK 3,399/month Even with zero income, these minimums must be paid.
Optional Sickness Insurance for Freelancers
Still not mandatory, but here’s what changes:
Rate: 2.7%
Minimum monthly payment: CZK 243. There’s still no yearly minimum as with social or health insurance.
Czech Flat Tax (Paušální Daň) in 2025
Flat tax allows freelancers to pay one combined monthly fee (income tax + social + health). New monthly rates are:
Band 1: CZK 8,716
Band 2: CZK 16,745
Band 3: CZK 27,139
These bands are based on your gross income and the type of business activity (different limits for trade, IT, etc.).
DPP Contract Rule Changes
DPP ("dohoda o provedení práce") contracts are common for part-time or seasonal jobs in the Czech Republic.
What's changed in 2025:
The 300-hour per year limit is gone
Now, employers must monitor monthly earnings
If an employee earns over CZK 11,639/month, the employer must switch the employee to a standard employment contract
Employee Tax and Contributions
The 15% / 23% income tax brackets still apply to Czech employees. However, the threshold for the 23% rate drops:
It now starts at CZK 139,671/month, which is 3× the average salary
Previously, it was 4× the average salary
New in 2025: Employees must now contribute 0.6% of their gross salary as sickness insurance. Until now, only employers paid this.. Until now, only employers paid this.
Corporate Tax for s.r.o. Companies
Corporate income tax in the Czech Republic remains at 21% in 2025.
No change to the s.r.o. structure or corporate tax rate.
Czech VAT System
2025 sees no changes to VAT rates, after a major restructuring in 2024:
Two rates: 12% (reduced) and 21% (standard)
Simplified system replaced previous 10%, 15%, and 21% rates
Some food and important goods have lower VAT
Some services and beverages now have higher VAT
Filing in Foreign Currency
Starting with the 2024 tax year (filed in 2025), Czech companies can:
do accounting and bookkeeping in EUR, USD, GBP, or other currencies
File tax returns and make payments in that currency
Need Help Filing Taxes in The Czech Republic?
At Pexpats, we specialize in Czech tax filings for:
Freelancers (OSVČ)
Employees and expats
Business owners and startups
Common Questions About Czech Taxes in 2025
What is the freelancer income tax rate in the Czech Republic for 2025?
Freelancers with a Czech trade license (OSVČ) pay 15% up to CZK 1,676,052, and 23% on income above that.
What are the 2025 Czech flat tax bands for freelancers?
Band 1: CZK 8,716/month Band 2: CZK 16,745/month Band 3: CZK 27,139/month Each includes Czech income tax, social security, and health insurance.
Do employees pay sickness insurance in the Czech Republic in 2025?
Yes. As of 2025, employees contribute 0.6% of their gross salary as sickness insurance.
What is the 2025 change to DPP contracts in the Czech Republic?
If a DPP worker earns more than CZK 11,639/month, the employer must offer a standard employment contract.
Can Czech companies file taxes in foreign currency in 2025?
Yes. Starting with the 2024 tax year (filed in 2025), Czech companies can use EUR, USD, or GBP for accounting and tax declarations.
