With a fixed flat tax regime, you pay roughly €250 per month to cover personal income tax, social security, and health insurance contributions.

Let’s apply some basic math for example:

Say you earn €60,000 per year.

Of that, your total tax, health and social contributions amount to €3,000.

That’s expenses at only 5% of gross income.

You also don’t need to file an annual return with the Finance Office when filing a fixed tax rate.

Simply invoice, and go about your business - with no additional reporting requirements.

However, note that the flat tax regime is limited to only registered freelancers in Czechia, and to taxpayers earning under 80,000 EUR annually.

But perhaps this isn’t the most advantageous tax reporting strategy for you..?

The most common tax reporting method entails a 60% expense allowance, hence the “60/40.”

Reporting taxes in this way is often advantageous (and convenient) for freelancers in marketing, sales, and IT who don’t have many expenses.

But why?

The “magic” behind the 60/40 method is that you don’t actually spend 60% of your business’ income on expenses.

Instead, you simply cut 60% from your gross salary, and pay taxes on the remaining 40%.

It’s that simple. And legal. Here’s the math for example:

You earn €80,000 over the year. 60% of 80,000 = €48,000 expense allowance.

We deduct expenses from our gross and pay 15% income tax on the remaining €32,000.

That brings your total income tax for the year to only €4,800. Talk about tax optimization, right?

Estimate your net income after tax liabilities and insurance contributions with our completely free, online freelance payment calculator.

Simply input your data, select your tax reporting method, and calculate your annual earnings.

Go ahead. Experiment below. Get an idea of your finances before checking out the rest of our 100% free tools for expats.