Are you looking for flexible short-term work and wondering what legal form is suitable? An easy way to arrange such short-term work is to enter into one of two types of employment agreements. For example, a work performance agreement. What to look out for when concluding one and what rules apply to a TCA from 1 January 2025?
A performance of work agreement (abbreviated as a DPP) falls under the so-called agreements on work performed outside the employment relationship. Since its hourly subsidy is legally limited, it is used, for example, for service work, but also for consultancy work, or seasonal work, such as holiday jobs for students, where units, at most low tens of hours per month, or a larger volume of work is expected on a sudden (one-off) basis.
In general, a number of provisions of the Labour Code also apply to work on a PPA, but the Labour Code (as with an employment contract) specifically excludes certain things typical of an employment relationship, such as:
Sometimes, paradoxically, concluding a performance agreement can be more complicated than signing an employment contract. As this type of employment relationship is not protected by law in the same way as a traditional employment relationship, there are many more things to look out for in the contract. If you are not sure about the wording of the contract, do not hesitate to consult a lawyer who can prepare comments on the contract or prepare everything “from scratch”.
You must not work more than 300 hours per employer per calendar year on a FTE. This agreement is therefore particularly suitable for short-term or one-off jobs that do not exceed the hours limit.
If the hours worked exceed this limit, you must choose another type of employment relationship, such as a contract of employment (CBA) or a traditional employment contract.
If the monthly remuneration from a PPA is less than CZK 11,500 with one employer, no social security or health insurance is payable. However, this also applies if an employee has several agreements with one employer and the total income from these agreements does not exceed CZK 11,500.
However, if you do not pay health insurance for any other reason (for example, as an employee), you become a person without taxable income from the point of view of the insurance company, in which case you must pay health insurance separately. The amount of this insurance is CZK 2,808 per month for OBZP 2025 and it is payable by the eighth day of the following month, for example for March by the eighth day of April. It is calculated as 13.5% of the assessment base, which is the current minimum wage. You do not have to pay social security, but you should bear in mind that the time you do not pay it does not count towards your pension.
However, if you exceed the amount of the DPP limit, i.e. if you earn more than CZK 11,500 per month, you already have to pay insurance, the health insurance rate is 4.5 per cent and the social insurance rate is 6.5 per cent.
Mr. Jiří performs work for the Learning Center under a work agreement for 100 hours in calendar year 2025. The work consists of installing, setting up, modifying and updating educational programs and personal accounts for teachers. The agreed hourly rate is 700 CZK. Mr Jiří will thus earn CZK 70 000 per year on the basis of the performance agreement. As this is a regular activity, he receives approximately CZK 5,800 each month. He does not pay social security or health insurance on this remuneration.
However, Mr Jiří also works for other employers on the basis of a performance agreement – in addition to the education centre, his clients include a university and a state office. He works for the university on the basis of a work performance agreement with a monthly remuneration of CZK 9,000, and for the state office he works on the same agreement with a monthly remuneration of CZK 8,500. In the aforementioned education centre, he receives approximately CZK 5 800 each month. The total monthly income is therefore CZK 23 300. On the basis of the previous arrangement, the income would be aggregated and Mr Jiří would have to pay insurance premiums. However, this rule has been changed and it is now the case that insurance is only payable if you have two (or more) FTEs with the same employer and you earn more than CZK 11,500 in total. Income from DPPs with different employers is therefore not added together. As neither employer’s DPP exceeds CZK 11,500, Mr Jiří does not have to pay social security or health insurance on these.
The fact that in total Mr Jiří works about 600 hours a year on performance agreements does not matter at all, because he has not exceeded the legal limit of 300 hours for one employer.
The decisive threshold for taxation is whether you have signed an income tax declaration (pink declaration) with the employer in question and also the income threshold of CZK 11,500.
If you have not signed a tax declaration and have income up to CZK 11,500, the agreement is subject to a withholding tax of 15%. In this case, you no longer have to file a tax return. However, if you do file, it is possible to recover the tax withheld by claiming tax credits for the tax year in question. Depending on your income for the year, you may be entitled to a tax refund.
If you earn more than 11,500 a month and you don’t have a signed tax return, you are taxed at 15% advance tax. However, you cannot claim any rebate from your employer, but you can claim tax credits as part of your tax return.
However, if you have signed a tax declaration (you can only have one employer sign it), you are liable to pay 15% advance tax on earnings above CZK 11,500. You can claim any discounts that apply to you from that employer. Thanks to the taxpayer’s discount (CZK 2,570 per month), you will often not pay tax at all. You must file a tax return if you work for more than one employer at the same time during the year.
Wondering how to pay insurance and taxes on a work arrangement? More detailed information can be found in the next article.
Calculating your salary on a DPP depends on several important factors: gross pay, the amount of tax, national insurance contributions and whether you have signed a tax declaration with your employer.
The pay for working on a DPP is usually set on an hourly basis. In 2025, it cannot be less than £124.40 per hour (based on a normal 40-hour week). Gross pay is therefore calculated as the product of the hourly rate and the hours worked.
Any income from a FTE is subject to taxation. Whether you pay withholding tax or advance tax depends on whether you have signed a tax declaration (the pink form) with your employer:
Another important factor is whether you exceed the so-called qualifying income, i.e. the threshold at which the insurance premium is deducted from the DPP. For 2025, this threshold is set at CZK 11,500 gross salary per month.
Tomáš is a university student who works in a shop over the summer, helping to replenish goods. He has a work contract but has not signed a tax declaration with his employer because he has already signed one elsewhere. In July he worked 60 hours and received an hourly wage of CZK 160.
Calculation:
Jana has a part-time job in an accounting firm. She worked 80 hours for CZK 150 per hour on a fixed-term contract, so she earned CZK 12 000. She signed a tax declaration for this employer because it is her only income.
Calculation:
Mr Karel is a pensioner and occasionally helps his former employer with minor repairs in the workshop. He has a work contract and has not signed a tax declaration. He earned CZK 15 000 in March 2025.
Calculation:
You can also use one of the DPP’s online wage calculators to calculate your net pay.
Since last year, you have been entitled to holiday entitlement with the FTE. The terms and conditions are the same as for a permanent job. In order to qualify, you must work at least four times your weekly working time, which is 20 hours per week for agreements. The second condition is that the agreement must last at least 4 weeks. This also applies to agreements that are directly linked to each other.
Even if you only work a few hours a week, the law uses a notional weekly working time of 20 hours to calculate your holiday entitlement under the FTC. The amount of entitlement is then based on how many hours you actually work and how many weeks of holiday your employer gives you (usually 4 or 5 weeks a year). The more hours you work in a year, the more holiday you accrue.
For example, if you work 300 hours a year on a FTE and the company gives 4 weeks holiday a year, you will be entitled to less than 24 hours paid holiday. This is equivalent to about 3 days off if you normally work 8 hours a day. You can use one of the DPP’s online holiday calculators to calculate this yourself.
Some self-employed workers are also entitled to paid leave. Find out if this applies to you.
If social insurance is deducted from your gross pay (i.e. for monthly income of more than CZK 11,500 for one employer), then you are also entitled to sickness benefits. If, on the other hand, your income is lower and there is no levy, you will not be entitled to sick pay.
Working as a salaried employee only counts towards your retirement pension if you have earned a certain amount in a given month and have also paid pension contributions on that amount. In 2025, this threshold is set at £11,500 per month for a single employer.
If you earn less than CZK 11,500 on a FTE, no pension contributions will be deducted from your pay – and that month will not count towards your pension. On the other hand, if your earnings exceed the threshold, your employer is obliged to register you for insurance and the month counts as pensionable service, i.e. as a month worked for your pension.
Crucially, the threshold of CZK 11,500 is always assessed separately for each employer. If you have several agreements with different employers but do not earn more than this amount with any of them, no insurance is deducted from any of the agreements and none of them counts towards your pension.
If you earn only a little extra money over the long term and don’t want these months to be missing from your pension calculation, you can consider a voluntary pension as a self-funded pensioner.
Our article explains in detail what exactly is counted as pensionable service.
The TPA may specify the period of time for which the agreement is valid and the automatic termination of the TPA upon its expiry. The same applies if 300 hours are worked. However, it is also possible to terminate the agreement earlier, including for an indefinite period. However, there is a mandatory 15-day notice period. This starts as soon as you give your employer written notice. The same applies to the employer. The employer can dismiss you without cause, but only if you have worked for them for less than 3 months.
Of course, it is also possible to end the employment relationship immediately, by agreeing to terminate the FTC. Such an agreement must not lack the identification of the employee and the employer, the identification of the employment relationship and the date of termination.
For example, you can use this simple template to terminate a contract of employment:
I, the undersigned
Name and surname: Jan Novák
Date of birth: 1 January 1990
Address: Ulice 123, 100 00 Prague
i hereby give notice of termination of the agreement to perform work concluded on 1 April 2025
between me and my employer:
Employer’s name: Firma s.r.o.
Registered office: Pracovní 456, 110 00 Praha
ID NO.: 12345678
I hereby give my notice in accordance with the provisions of Section 77(5) of the Labour Code, the notice period being 15 days and commencing on the day following the delivery of this notice to the employer.
In Prague, 31 May 2025
Signature:
………………………………………….
Jan Novák
Did you get fired from your job? We’ll make sure you get everything you’re entitled to. We can help you defend yourself against your employer. We will offer a solution in as little as two days, nationwide.
In the last two years, there have been significant changes in the field of contract work. In addition to the change in the threshold for contributions and holiday entitlement, there are further changes with the amendment to the Labour Code:
Employers are now required to report all concluded agreements to the Czech Social Security Administration. This is to prevent fraud by employees. This is because they could simply earn over the limit with several employers and thus not pay social security, health insurance and tax.
All this means for you as an employee is that when you sign the agreement, your employer will also ask you to fill in and sign a document stating whether you are working for someone else. At this point, it really doesn’t pay to hide other agreements to save a bit on insurance premiums.
You will simply be caught out for registering and will then have to pay the insurance premiums not only for yourself but for your employer. In addition to the usual 7.1% of your income, you will also have to pay 24.8% for your employer. And if you don’t pay, you will incur a debt for health and social security. This will incur a penalty of 0.0329% of the amount owed for each day it is outstanding.
We have discussed what to do if you incur health and social security debts in our article.
An employer must not discriminate against its contractors. This means that they must be paid the same wage as full-time employees who do the same work or work of equal value. This rule also applies to the provision of employment benefits in the form of meal vouchers, multisports, etc. Consequently, contract workers should be legally entitled to the same benefits as full-time employees.
The minimum wage rules also apply to agreements. An employee working on an agreement must therefore receive a minimum of CZK 124.40 per hour. However, what does not apply to agreements is the guaranteed wage.
What does the guaranteed wage guarantee? Find out in our article.
Contract workers are also newly entitled to certain additional payments for their work. Specifically, these include:
The allowances are determined in accordance with the rules on remuneration by wages, even if the conciliator is employed in the public sector and receives a salary.
We have covered all private sector bonuses in more detail in our article.
Thehome office for agreement work must now be set out in writing. At the same time, the employer can only impose it on the conciliator on an exceptional basis and must reimburse the conciliator for the costs associated with it (utilities, etc.). This amount is set at a flat rate of CZK 4.80 per hour for working from home.
Under what conditions can an employee use the home office and what does it mean for the employee and the employer? Read our article.
The employer must inform the contract worker of the work schedule or changes to it at least three days before the start of the shift. The employer must then cancel the shift at least 24 hours before the start of the shift, otherwise the contract worker must be reimbursed.
As a contract worker, you now have the option of asking your employer to transfer you to a main employment contract. However, you must meet several conditions:
If you request a transfer to a permanent contract, your employer has a maximum of one month to respond. If they refuse your request, they must have a reason.
Even self-employed(self-employed) people may have a slow period in their business, perhaps to help out with a part-time job in another industry. In such a case, there may be a concurrence of a trade and a work performance agreement.
As far as taxation is concerned, the above principles will apply to you. As a self-employed person, you will in any case file a tax return for the previous year. In this, you may reduce your tax base after applying all tax deductions and allowances and you may incur an overpayment of tax which will be refunded by the state. You will need taxable income certificates from all your employers to complete this.
If your business doesn’t pay much, it may be worth finding a job on a FTE where your monthly income exceeds CZK 11,500. In this case, your health and social insurance will be deducted, your business will be treated as a secondary activity and you will pay less in compulsory contributions.
Sometimes, paradoxically, concluding a performance agreement can be more complicated than signing an employment contract. As this type of employment relationship is not protected by law in the same way as a traditional employment relationship, there are many more things to look out for in the contract. If you are not sure about the wording of the contract, do not hesitate to consult a lawyer who can prepare comments on the contract or prepare everything “from scratch”.
The concurrence of a main employment relationship (HPP) and a performance contract (DPP) is possible, but there are some important rules.
It is only possible to work on a principal employment relationship (PEP) and a work performance agreement (WPA) with the same employer if they are different types of work. Simply changing the job title is not enough – the activities must be different in kind. For example, if you work as an accountant on an HPP, you can help organise company events on a DPP. The Labour Code explicitly prohibits one employee from performing the same type of work under two different employment relationships with the same employer.
If you have both an HPP and a DPP with the same employer, the employer processes the taxes on both of these incomes together. The income from both the HPP and the DPP is then added together for the purposes of calculating the advance income tax. However, for social security and health insurance contributions, income from HPP and DPP is treated separately. This means that if the income from a work performance agreement does not exceed the statutory limit (CZK 11,500 per month), it does not give rise to an obligation to pay social security or health insurance.
If you work on a principal employment contract (HPP) with one employer and at the same time earn extra income on a work performance agreement (WPA) with another employer, the law allows this combination. However, there are some important rules.
If your work activity on a FTE is identical or partly identical to that of your main employer, you will need to get written consent from your employer on the HPP. This restriction does not apply to scientific, teaching, journalistic, literary or artistic activities.
As far as taxes are concerned, your employer with whom you have an HPP will process your income tax on the basis of a signed Taxpayer’s Declaration (pink form). However, you are only allowed to have this form active with one employer in any given period. Therefore, if you have not signed it with the employer where you have a DPP, 15% tax will automatically be deducted from your pay.
In terms of social security and health insurance, the DPP has its own rules. If the monthly remuneration from a DPP does not exceed CZK 11,500, you are not obliged to pay insurance on it. Once you exceed this threshold, your employer is obliged to pay the insurance premium, even if you already have insurance paid for by your HPP. For the purposes of insurance premiums, HPP and FTE are treated separately for different employers.
We have discussed in detail in our article what rules apply to two jobs at the same time, whether they are two main jobs or an agreement.
If you are registered with the Job Centre and are considering taking on extra work, it is important to know that you must not work on a work contract. This form of employment is not allowed on the register, regardless of whether you are receiving unemployment benefit or not.
The possibility of earning money in other ways depends on whether you are receiving unemployment benefits at the time of registration. If you are, you cannot earn extra money at all. Any earnings, however small, are considered a breach of the conditions of registration. This can lead not only to being removed from the labour office’s register, but also to having to repay the benefits you have been paid.
The situation is different if you are registered with the Job Centre but no longer receive benefits. In this case, you can earn extra money, but only under strict conditions. You can work on a contract or a part-time contract and your earnings must not exceed 50% of the minimum wage. In 2025, this means a maximum of CZK 10 400 per month. If you have more than one employment contract, their earnings are added together. So it is not possible to have, for example, CZK 6,000 from one agreement and CZK 5,000 from another – the total amount must not exceed this limit.
Violations of these rules can be assessed by the authorities as illegal work. Individuals can be fined up to CZK 100,000 for such actions. Employers who allow such work can be fined up to CZK 10 million.
For students, pensioners and people on parental leave, the same rules apply to the DPP as for everyone else, but there are also certain specifics and benefits relating to health and social insurance and tax credits:
The main difference lies in the number of hours worked and the threshold for taxation and social and health insurance:
| DPP | FTE | |
|---|---|---|
| Maximum number of hours worked | 300 hours per year | 20 hours per week |
| Levies | When exceeding the threshold of 11 500 crowns | If the limit exceeds 4 500 crowns |
Such a question cannot be answered unequivocally. It depends primarily on the circumstances under which you want to enter into a DPP – for example, if you are an employee, student or pensioner and the state or your employer pays your health and social security contributions, you may find it worthwhile to work on a DPP with earnings of up to CZK 11,500 per month. However, if you are not in such a position and you do not pay social security and health insurance, then working on a DPP is unlikely to be worthwhile.
If you exceed this limit, you pay health insurance at the rate of 4.5% of your gross wages. The minimum premium for PWD is CZK 3,143 per month in 2025, but on a DPP you pay the premium on the wages earned when you exceed the limit, not the fixed minimum.
We have discussedthe employment agreement in our separate article.
The work performance agreement must state:
You can also agree other details with your employer. The condition is that the agreement is in writing.
It can look something like this:
MODEL AGREEMENT ON THE PERFORMANCE OF WORK
Concluded pursuant to Section 75 et seq. of Act No. 262/2006 Coll., the Labour Code, as amended.
Contracting parties
Employer:
[Company name]
Registered office: [Address of registered office]
COMPANY REGISTRATION NUMBER: [COMPANY REGISTRATION NUMBER]
TAX IDENTIFICATION NUMBER: [TAX IDENTIFICATION NUMBER]
Represented by: [Name and position of person authorised to act for the company]Employee:
Name and surname: [Name and surname of employee]
Birth number: [Birth number]
Residence: [Home address]
ID number: [ID card number]
Subject of the agreement
The employee agrees to perform the following work for the employer:
[Description of work or task]Place of work
The place of work is the employer’s registered office at [Address].
The location of the employer’s headquarters is the employer’s place of business
The Agreement is concluded for a fixed period from [Start Date] to [End Date].
The maximum amount of work is set at 300 hours per calendar year.
Remuneration for the work
For the work performed, the employee is entitled to remuneration of [Remuneration amount] CZK per hour.
The remuneration shall be paid no later than [Date of payment] to the employee’s bank account No. [Account number] or by other agreed means.
Employee’s rights and obligations
The employee undertakes to perform the work personally, conscientiously and in accordance with the employer’s instructions.
The employee has the right to reasonable working conditions and to health and safety at work.
Employer’s rights and obligations
The employer is obliged to pay the employee the agreed remuneration for the work performed within the period specified in this agreement.
The employer is obliged to ensure safe working conditions for the employee and to comply with the regulations on occupational safety and health.
The employer has the right to control and supervise the progress and quality of the work performed by the employee.
Final provisions
This Agreement shall enter into force on the date of signature by both parties.
The Agreement may be amended or cancelled only in writing by agreement of both parties.
This Agreement shall be drawn up in two copies, each of which shall have the force of an original. Each Party shall receive one copy.
At [Place], on [Date]
Signatures of the Parties.
A performance work agreement (PWA) is a flexible form of employment outside the traditional employment relationship, suitable for short-term or one-off activities. In 2025, an employee is allowed to work a maximum of 300 hours per year for one employer. The remuneration must be at least the minimum wage (124.40 CZK/hour), but otherwise there is no limit. The FTC must be agreed in writing and the notice period is 15 days.
Social security and health insurance is only payable on the DPP if the monthly remuneration exceeds CZK 11,500 for one employer. For lower remuneration, no insurance is payable, but at the same time such work does not count towards pension or entitlement to sick pay. Income from FTEs with different employers is not aggregated for insurance purposes.
Taxation depends on whether a tax declaration is signed. Without it, income up to CZK 11,500 is subject to a 15% withholding tax. With the declaration, it is possible to take advantage of taxpayer rebates and possibly receive a tax refund. Above CZK 11,500, advance tax and insurance premiums are always payable.
From 2024, the holiday entitlement also arises if the conditions are met. Employers are now required to report all DPPs to the Czech Social Security Administration. Contract workers are entitled to the same wages and benefits as other employees, including additional payments for weekend, night and holiday work. Home office is only possible in writing, the employer must cover the fixed costs.
Compared to a contract of employment (FTE), a FTE has a lower limit of hours (300 per year) but more favourable conditions if it stays below CZK 11,500 per month. The advantage of a DPP depends on the specific situation – it may be advantageous for students, pensioners and employees, but less so for others.
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