Employer of Record in Czech Republic

How an Employer of Record works in the Czech Republic

An Employer of Record (EOR) is a company that acts as an employer on behalf of another business.

Many overseas business owners who want to hire employees in the Czech Republic use an EOR, as this removes the hassle and expense of setting up their own local legal entity there.

An EOR acts as the legal employer in this case. It also handles key administrative aspects of hiring in the Czech Republic, such as onboarding, payroll, taxes, employee benefits, and contract terminations.

Rivermate’s EOR services are built on three pillars:

• Local HR experts who understand the market and employment laws.
• A network of partners that allows us to provide competitive benefits.
• The Rivermate platform that simplifies every aspect of the employment relationship.

Using Rivermate to hire employees in the Czech Republic ensures they’re supported by a reputable entity that understands local labor laws.

Czech Republic labor market: At a glance

The hiring market
Greatest hiring activity:	Prague, Brno, Ostrava.
Hiring timelines:	Very fast for local workers; a lot longer for expats, particularly those outside the EU.
In-demand sectors:	Engineering, Manufacturing, Tech, Construction, Healthcare, Logistics, Finance.1
Sectors with skills shortages:	Engineers, Logistics, Healthcare.

The salary market
Employer tax contributions:	Social security: 24.8% (capped at salaries of CZK 2,350,416). Health insurance: 9%.
Monthly minimum wage:	The monthly minimum wage is in 2026 is CZK 22,400, increasing to 24,900 in 2027.
Average gross annual salary:	CZK 623,592.
Personal income tax rates:	Gross annual income up to CZK 1,762,812 is taxed at 15%. Income exceeding this threshold is taxed at 23%.7 The threshold is set to increase to CZK 1,859,868 in 2027.

What will it cost to hire in the Czech Republic

Salary requirements

The statutory monthly minimum wage in the Czech Republic is CZK 22,400. This will increase to CZK 24,900 in 2027, based on a 40-hour workweek. The hourly minimum wage is CZK 134.40 in 2026, rising to CZK 148.30 in 2027.

The average monthly wage in Q2 2026 was CZK 51,966, according to the Czech Statistical Office.

Employer contributions

Every Czech Republic employer is obliged to make social security contributions worth 24.8% of each employee’s salary. However, this is capped at a salary base of CZK 2,350,416.

That’s 48 times the “average monthly wage” figure determined by Czech law for tax and insurance purposes. This figure is set to rise in 2027, from CZK 48,967 to CZK 51,663, meaning the cap for social security contributions will rise to CZK 2,479,824.

Czech employers must also make health insurance contributions for each employee, equal to 9% of their wages. There is no cap on these contributions.

Statutory benefits

Czech employees have a statutory right to paid annual leave. The statutory minimum is four weeks of paid leave for employees who have served their employer for 12 months. Those who have worked between four weeks and one year can claim annual leave on a pro-rata basis.

Employees are also entitled to paid sick leave. For the first 14 days of incapacity, the employer pays 60% of reduced average earnings, applying the statutory reduction thresholds. From day 15, social security covers sick pay. Employees can claim up to 380 days of paid sick leave. However, employers have the right to dismiss staff members if they’re declared long-term unfit to continue their job by a medical professional.

Female employees are entitled to 28 weeks of maternity leave, or 37 weeks if giving birth to two or more children at the same time. New fathers must receive at least 14 days of paternity leave. Unpaid parental leave must also be made available to parents until their child turns three years old.

Employment Cost Calculator

Use our Employment Cost Calculator to estimate the cost of hiring employees in the Czech Republic.

What it’s really like hiring in the Czech Republic

Market condition	What an employer needs to know
Talent availability	The unemployment rate is far lower than the EU average, suggesting a tight employment market.
Top-paying sectors	Managers in technical and professional roles.
Skills shortages	Engineering, Logistics, Healthcare.
Key employer challenge	Navigating the tough recruitment market.

The job market in the Czech Republic is often described as “tight” for employers, due to a low unemployment rate making it harder to tempt talented workers into vacant roles.

A 2025 European Commission report found that Czechia’s unemployment rate was just over 3%, making it the lowest in the EU.

The hiring process is reportedly taking longer in the Czech Republic, which is another sign of a “tight” job market. From advertising a role to filling it, it generally takes 12 weeks when hiring a Czech national or 15 weeks to hire an EU national. Meanwhile, hiring non-EU nationals takes around 23 weeks.

Hiring non-EU nationals in the Czech Republic

The Czech Republic is dealing with skills shortages in key sectors such as engineering, logistics and healthcare.

Czech employers can easily hire workers from other EU countries, plus Iceland, Liechtenstein, Norway, and Switzerland to fill key vacancies. Citizens of these nations have the same rights as Czech citizens to work there.

However, hiring non-EU nationals can be trickier. They’ll need to apply for a residence permit and a work permit, or a similar document like an Employee Card or an EU Blue Card.

If an employer intends to hire a worker who needs an Employee Card or Blue Card, they must first notify the Czech Labor Office and advertise the vacancy in the relevant central register for Employee Card or Blue Card holders. This gives domestic candidates the opportunity to apply first.

Compliance risks that employers must know about in Czech Republic

Employment contracts must fit a certain format

Unlike in some jurisdictions where a verbal contract can be legally binding, all jobs in the Czech Republic must be backed by a written contract. Compliant employment contracts must describe specific elements of the job as outlined in Section 34(1) of the Czech Labor Code.

Foreign employers shouldn’t assume that a standard template from their home country will suffice.

Minimum wage and payroll rules need to be checked annually

The Czech government has already agreed increases to the national minimum wage for 2027 and 2028. The average monthly wage for tax and insurance purposes will also increase in 2027.

These shifts can affect wages and social security contributions, so payroll departments need to stay on top of them.

Overtime has strict limits

The standard workweek in the Czech Republic is 40 hours. Hours worked over this limit must either:

• be paid at an overtime rate of at least 125% of the worker’s normal wages;
• or be compensated with time off instead of the 25% premium.

An employee must agree to work overtime, unless there are serious operational circumstances, in which case the employer can enforce it. However, no more than eight hours of overtime per week or 150 hours per calendar year can be enforced.

In any case, agreed upon or not, an employee cannot work more than eight hours per week overtime, averaged over a period of 26 weeks, extendable to 52 weeks by collective agreement.

Neither pregnant nor adolescent workers can work overtime. Parents with children under a year old cannot be forced to work overtime, although they can agree to do so.

Employers must give a valid reason for dismissing an employee

There is no “at will employment” in the Czech Republic. Employers must give a valid reason for firing an employee.

Employees must be given a written warning and a reasonable opportunity to amend their actions before they can be dismissed for poor performance.

A notice period will be required in certain situations.

• Redundancy or organizational changes: 2 months’ notice required;
• Long-term loss of medical fitness: 2 months’ notice required;
• Poor performance: 1 month’s notice required;
• Other breaches of employee duties: 1 month’s notice required;
• Gross misconduct: No notice required.

Severance pay will be owed to Czech Republic employees who are made redundant. The amount due will be a multiple of their average monthly wage based on their tenure at the company.

Tenure at company	Severance pay due
Less than one year	1x average monthly wage
Between 1-2 years	2x average monthly wage
2 years or more	3x average monthly wage

No severance pay is due when an employee resigns or is dismissed for poor performance.

Probation periods are shorter than some foreigners may expect

During probation, an employer can fire a staff member for any reason, or no reason, with no notice period required. That dismissal must be delivered in writing. The employer still cannot terminate contracts during the first 14 calendar days of temporary incapacity or quarantine.

The maximum probation period in the Czech Republic is shorter than in many other EU countries: four months for regular employees or eight months for managerial positions.

The details of probation periods must be outlined in an employment contract to be legally valid.

Benefits of hiring employees through an EOR in the Czech Republic

Using an EOR to hire in the Czech Republic saves a lot of time and money compared with setting up your own local entity there.

You’ll also receive ongoing HR support from experts with a deep knowledge of Czech labor laws, reducing the administrative burden of hiring in a new country.

At Rivermate, we help employers by:

• providing a local legal entity in the Czech Republic.
• handling all administrative aspects of running a Czech business, including onboarding, employment contracts, payroll processing, tax withholding, benefits administration, and all contract termination processes.
• ensuring full compliance with Czech employment law.

This way, you don’t need to worry about understanding social security contributions, employee terminations, or other complicated aspects of the Czech labor code. Instead, you can focus on what you do best: managing your staff and growing your business.

Ready to hire in the Czech Republic?

Hiring in the Czech Republic involves more than discovering the best person for the job. From payroll management, tax compliance and benefits management to ensuring full compliance with local employment laws, Rivermate handles all the administration so you can hire with confidence.

Talk to a Czech Republic Hiring Expert

Sources:

1. https://www.atozserwisplus.com/jobs-europe/20-jobs-in-high-demand-in-czech-republic-2026
2. https://www.expats.cz/czech-news/article/salary-leaders-czechia-s-best-paying-industries-and-locations
3. https://economy-finance.ec.europa.eu/economic-surveillance-eu-member-states/country-pages-including-country-reports/country-report-czechia_en
4. https://www.accace.com/minimum-average-and-guaranteed-wage-czech-republic/
5. https://knowledge.dlapiper.com/dlapiperknowledge/globalemploymentlatestdevelopments/2026/czech-republic-approves-minimum-wage-increase-for-2027
6. https://csu.gov.cz/rychle-informace/average-wages-2-quarter-of-2026
7. https://taxsummaries.pwc.com/czech-republic/individual/taxes-on-personal-income
8. https://taxsummaries.pwc.com/czech-republic/individual/other-taxes
9. https://portal.gov.cz/en/informace/INF-14
10. https://aroundprague.cz/en/guides/sick-leave-and-sick-pay-in-czechia-2026
11. https://ppropo.mpsv.cz/zakon_262_2006
12. https://www.cssz.gov.cz/web/lang/davky
13. https://absl.cz/wp-content/uploads/2026/03/ABSL_Report_2026_e-version_final.pdf
14. https://up.gov.cz/en/employer-s-procedure
15. https://portal.gov.cz/en/informace/pracovni-smlouva-a-jeji-nalezitosti-INF-13
16. https://www.ef.com/wwen/epi/
17. https://www.officeholidays.com/countries/czech-republic/2027