Minimum wage Czech Republic 2025

The minimum wage is the lower limit set by the state for the remuneration of an employee for fully worked working hours. This category has a complex meaning both from the point of view of labour and social law and in the context of taxation, calculation of insurance contributions and determination of a number of social obligations. As of 1 January 2025, the updated values of the minimum wage came into force in the Czech Republic as a result of the reform of the mechanism for its determination and indexation. In accordance with the provisions of the Czech Labour Code, the minimum wage is determined by the Government and reviewed annually. From 2025, an automatic valorisation mechanism came into force, according to which the basic level of the minimum wage is set as a percentage of the average wage in the national economy. The purpose of the innovation is to ensure predictability, transparency and compliance of the level of minimum income with socio-economic realities.

Established values for 2025

According to the current decree, as of 1 January 2025:

• The minimum monthly wage for full-time employment (40 hours per week) is CZK 20,800 gross.
• The minimum hourly rate is equal to CZK 124.40.

The increase compared to 2024 is CZK 1,900 per month, reflecting both inflationary pressures and the general trend of wage growth in the economy.

Legal and practical aspects of application

The minimum wage is mandatory for all employers, including the private and public sectors. It applies to all types of employment relationships, regardless of the form of the contract (employment contract, work contract, labour contract) and the nationality of the employee. For part-time workers, the minimum payment is proportional to the time actually worked. The employer is not entitled to set the basic wage below the minimum wage. At the same time, the minimum wage does not include compensation for overtime, night hours, work on weekends and public holidays, which must be taken into account in the calculations.

Guaranteed wages and occupational classifications

The system of guaranteed wages distributed by qualification groups is still applied for public sector employees, as well as for positions financed from public sources. Depending on the complexity, responsibility and educational level, workers fall into one of four categories:

• Group I (low-skilled labour): CZK 20,800,
• Group II (secondary education without matriculation examination): CZK 24,960,
• Group III (secondary education with matriculation examination): CZK 29,120,
• Group IV (higher education): 33,280 CZK.

This system applies exclusively in the public sphere and does not apply to private employers, who, as of 2025, are governed exclusively by the minimum wage.

Impact on the calculation of taxes and insurance contributions

The minimum wage is used as a base value for the calculation of minimum social and health insurance contributions:

• Self-employed persons (e.g. unemployed persons, freelancers, students over 26 years of age, etc.) are obliged to calculate their contributions on the basis of the minimum wage.
• The mandatory health insurance contribution in the absence of income will be approximately CZK 2,808 per month.
• The minimum wage affects the determination of the tax base as well as the eligibility criteria for various tax benefits, including for parents, disabled persons and pensioners.

In addition, the established minimum wage limits affect the limits of non-taxable employer-provided benefits (e.g. food, sports, health care), as some of them are determined as a percentage or fraction of the national average wage.

Implications for employers and employees

Increasing the minimum wage has the following consequences:

• Revision of staffing tables and employment contracts, especially in segments where pay is close to the minimum wage;
• Increasing the payroll, especially in small and medium-sized businesses;
• Adjustments to internal payroll procedures, including for tax and insurance reporting;
• For foreign workers, the need to comply with migration requirements, as the minimum wage is often used as a condition for issuing work permits and residence permits.

Prospects for further changes

According to the Ministry of Labour’s long-term goal, the minimum wage should reach a level of at least 50% of the average wage in the economy in the perspective until 2029. This means that in the coming years it can be expected to increase annually between 8-10% per year, provided that economic growth is stable. It is important for employers to keep track of regulatory changes and adapt internal documents in time to avoid potential offences and penalties related to non-compliance with minimum wage legislation.

Changes in the minimum wage in the Czech Republic for 2015-2025

The minimum wage in the Czech Republic has undergone a steady evolution over the last ten years, reflecting economic transformation, growth in labour productivity and the state’s desire to provide social guarantees to the working population. As a mandatory element of labour law, the minimum wage is set by government decree and applies to all employees, regardless of the form of employment relationship, qualifications or citizenship. Between 2015 and 2025, the minimum wage more than doubled from CZK 9,200 to CZK 20,800 per month. The hourly rate increased from CZK 55 to CZK 124.40 over the same period. This increase is due not only to inflationary pressure, but also to the state’s intention to bring the minimum wage closer to the level of the average wage, gradually reaching the target value of 50 per cent of the average wage in the economy. In the first years (2015-2017), the increase in the minimum wage occurred at an accelerated pace. For example, in 2017, the increase amounted to 1,100 kroner at once – an increase of more than 11 %. This was possible due to a stable macroeconomic situation and a decrease in unemployment. From 2018 to 2020, the positive trend continued, with annual increases of between 1,150 and 1,250 kronor. However, there was a slowdown in 2021, with an increase of only 600 kronor, due to the effects of the COVID-19 pandemic and the need to maintain a balance between the interests of employees and the capabilities of employers. From 2022 onwards, the rate of increase in the minimum wage increased again. In 2024, an automatic indexation mechanism linked to the average wage was implemented. As a result, the minimum monthly wage reached 20,800 kronor in 2025, the largest nominal increase in a decade.

Table of changes in the minimum wage in the Czech Republic 2015 – 2025 (make a table)

The minimum wage affects not only the level of income of employees, but also the amount of insurance and tax obligations. It serves as a basis for calculating minimum health and social insurance contributions for persons not employed in labour relations, as well as for determining the limits of non-taxable benefits and allowances. For example, when determining the minimum insurance contribution for self-payers or persons with no other income, it is the minimum wage that is used as the base. In addition, the minimum income level is used as a threshold when considering applications for the issuance or extension of residence and work permits for foreign nationals. In particular, in order to obtain a labour card or employee card, a foreign candidate must have a labour contract providing for a salary not lower than the established minimum wage.

The new indexation system, which comes into force from 2024, eliminates politically motivated negotiations and moves to an automatic, formulaic approach. This increases transparency, reduces the administrative burden on employers and makes long-term financial planning more stable. If current growth rates and favourable economic conditions continue, it is expected that the minimum wage in the Czech Republic will reach the level of 28,000-29,000 CZK per month by 2029. Thus, the minimum wage in the Czech Republic has shown a steady upward trend over the past ten years. Its increase has not only social but also fiscal significance, affecting all key elements of labour and tax regulation. It is especially important for employers to take into account changes in the minimum wage in time when drafting labour contracts, forming the payroll, as well as within the framework of HR and migration compliance.

What influences the minimum and average wage in the Czech Republic?

The minimum and average wage affects not only labour remuneration but also a number of other aspects.

Health and social insurance

The minimum monthly contribution to pension insurance for self-employed persons is 29.2 per cent of 35 per cent of the average wage, which amounts to CZK 4759 for the year 2025. The minimum health insurance contribution for self-employed persons is 13.5% of half of the average salary, i.e. CZK 3,143. The maximum base for social insurance contributions will increase to CZK 2,234,736 (48 times the average salary). The increase in the minimum wage will also increase the minimum base for health insurance contributions for persons with no taxable income. In this case, the amount of contributions to health insurance will be 13.5 per cent of the minimum wage, which will be CZK 2,808 per month in 2025. The limit for participation in sickness insurance is also increased: for employees of the employment service at an income of CZK 11,500 (25 per cent of the average wage) and for other employees at CZK 4,500 (one tenth of the average wage).

Personal income tax

The monthly limit for applying the increased personal income tax rate of 23% is 3 average salaries and the annual limit is 36 average salaries. In 2025, this will amount to CZK 139,671 per month or CZK 1,676,052 per year. The exemption threshold for regularly paid pensions is 36 minimum wages, i.e. CZK 748,800 per year. The minimum wage also affects the income threshold for the tax bonus. This threshold is six minimum wages. In 2025, the minimum annual income eligible for the tax bonus will be CZK 124,800.

Employee benefits

The exemption threshold for non-monetary benefits provided by the employer is half of the average salary, i.e. CZK 23,278 per year, and in the case of health benefits, CZK 46,557 per year (above the average salary). Possibility of higher additional earnings for those registered with the Labour Exchange If you are registered with the Labour Exchange, you can work part-time, but there is a limit – a maximum of half the minimum wage. In 2025, this will be CZK 10,400 per month.

Minimum wage per hour in Czech Republic

• The exemption threshold for regularly paid pensions will be increased to CZK 748,800 per year (36 minimum wages), i.e. CZK 62,400 per month.
• Health insurance, which must be deducted from the minimum wage, e.g. for persons without taxable income, will increase to CZK 2,808 per month (13.5 per cent of the minimum wage).
• The income threshold for eligibility for the tax bonus will be increased to CZK 124,800 per year (6 minimum wages), i.e. CZK 10,400 per month.

Basic salary in Czech Republic 2025

• It increases the threshold for application of the second tax rate to a monthly limit of CZK 139,671 (3 times the average wage), then the annual limit is CZK 1,676,052 (36 times the average wage).
• The maximum assessment base for social security contributions will be increased to CZK 2,234,736 (48 times the average salary).
• The exemption threshold for non-monetary benefits provided by the employer will be increased to CZK 23,278 per year (1/2 of the average salary). If the amendment to the Employment Act is adopted, the new limit will only apply to medical benefits up to the average salary, i.e. CZK 46,557 per year.
• Increases the health insurance participation limit for DPPs when income reaches CZK 11,500 (25 per cent of average salary).
• The minimum advance payment for pension insurance for self-employed persons will be increased to CZK 3,399 (29.2% of ¼ of average salary) for start-ups and CZK 4,759 for other entrepreneurs (29.2% of 35% of average salary).
• The minimum advance payment for health insurance for self-employed persons will be increased to CZK 3,143 (13.5 per cent of half of the average salary).
• The lump-sum tax rate for self-employed persons in the first group will increase to CZK 8,716.