Does your employer offer you a contract of employment (FTE)? What is the difference between a FTE and a VPA? Is it a profitable contract mainly for the employer or can it bring benefits to you as well? In our article, we will also look at the possible alternatives and summarise the tax treatment of this type of contract. The legal regulation of the agreement has seen some recent changes. We will focus on these as well.
An employment contract is one of the three types of contracts most used in employment law. It is popular with employers for a variety of small auxiliary activities, cleaning or manual work, or long-term temporary jobs.
We have discussed the different types of employment relationship in detail in our article.
In general, many provisions of the Labour Code also apply to work on a fixed-term contract, but the Labour Code specifically excludes certain things that are typical of an employment relationship, such as:
Of course, you can agree with your employer on any of the above, but you should take into account that these are not automatic entitlements and may need to be specifically stated in the contract.
Concluding an employment agreement can sometimes be paradoxically 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”.
There is a limit to the number of hours that can be worked on the FTE. This limit is determined by half of the weekly working time, which is assessed over the duration of the working time, up to a maximum of 52 weeks. In other words, it is not possible to work more than 20 hours per week on average during the period (for example, if 30 hours are worked one week and 10 hours another, then the condition is met).
Example: The employment agreement for maintenance and gardening work in the grounds of the monastery was concluded with Mr Richter from 1 May 2025 to 30 June 2025. The total number of hours worked is set at 160. Mr Richter worked 60 hours in the first two weeks (30 hours and 30 hours), but in the following weeks the work was less and he worked approximately sixteen to seventeen hours each week, therefore on average he met the limits set by law for FTEs.
The obligation to pay social security, health insurance and taxes arises if the gross monthly income exceeds the so-calledthreshold amount of CZK 4,500 (valid in 2025), which is set at one tenth of the average wage for the year.
If a FTE employee reaches or exceeds the monthly remuneration of CZK 4,500, he or she is obliged to pay social security and health insurance. A total of 11.6% of his gross salary is paid – of which 6.5% for social insurance and 4.5% for health insurance. At the same time, the employer pays a further 33.8% – namely 24.8% for social security and 9% for health insurance.
It is also important whether the employee is insured under another title – for example, as a student, as an employee of another employer or as a person for whom the state pays health insurance. If not, he or she becomes a person without taxable income (PIP) and is obliged to pay for his or her own health insurance. In 2025, this amount is CZK 2 808 per month. It is always due by the eighth day of the following month (e.g. for June by 8 July). The amount is calculated as 13.5% of the minimum wage for the year.
Mrs Alena works as an accountant for a small company in retirement. She works under a contract of employment (FTE). She works about 30 hours a month and is paid CZK 200 per hour, so her monthly income is CZK 6 000.
As her monthly remuneration exceeds the decisive amount of CZK 4 500 (applicable in 2025), she becomes liable for health and social security contributions.
A deduction is made from her gross salary of CZK 6 000:
The company that employs her also pays more:
Whether you will pay taxes on your FTE depends on whether you sign a tax declaration (pink paper) with your employer and also on the amount of your earnings.
If you don’t sign a tax declaration with your employer and you earn less than CZK 4,500, your employer will deduct a 15% withholding tax from your income straight away, which solves the tax issue for you.
For remuneration above CZK 4,500, your employer will pay a 15% advance tax just like in a normal employment relationship (this applies whether you have signed the declaration or not). However, if your income is low or you claim back allowances, you can claim the overpayment on your tax return.
Our article will tell you how to fill in the taxpayer declaration.
If you sign the tax declaration, only the advance tax will be deducted and you will then claim all the tax credits you are entitled to on your tax return – the classic taxpayer’s rebate (currently CZK 2,570 per month) and the child tax credit. In practice, you can therefore receive a tax bonus if the tax credit for children is higher than the calculated income tax.
The tax bonus is the difference between the income tax calculated and the child tax credit. In other words, if your tax liability is negative because the child tax credit has been claimed, this is a tax bonus. This bonus is then paid to you by the tax office. The limit of the tax bonus is unlimited.
As far as the tax declaration is concerned, the rule is that you can only sign it for one employer in a given month. However, there may be more than one during the year, but it must be specified for which months.
If you sign the declaration for more than one employer at the same time, you will incur tax arrears which you will have to pay and you may also incur penalties from the tax office. In addition, your employer is obliged to report this and deduct the difference from your wages.
At the end of the year, your employer will give you an income certificate on request so you can file your tax return. If you had income from two employers in any month that was subject to advance tax, you must file a tax return. However, if you pay tax directly by withholding, like employees, then there is no obligation to file a tax return.
If you have not had income from two or more employers in any month that is subject to advance tax and you have no other reason to file a tax return, you can ask your last employer to do the tax for you.
Calculating your net pay for an employment contract (FTE) depends on several factors: your gross pay, income tax paid, insurance contributions (health and social security) and whether you have a signed tax declaration.
The remuneration for working on a FTE is usually agreed on an hourly basis. For 2025, the minimum hourly wage must not be less than CZK 124.40. You can then find your gross pay by multiplying the number of hours worked by the hourly rate.
Klára is a university student and works as a part-time assistant in a language school. She is paid CZK 150 per hour and works 25 hours in a given month. She does not have a signed tax declaration because she already has one with another employer.
Martina works on maternity leave as a freelance accountant. She worked 40 hours for CZK 150/hour. She has signed a declaration with her employer.
Oldřich is a pensioner and works as a warehouse manager. In April he worked 35 hours for CZK 200/hour. He did not sign a tax declaration.
From 2024 you are entitled to holiday pay even if you work on a FTE. The conditions for entitlement are the same as for regular employment. This means that you must work at least four times your weekly working time, which is set at a notional 20 hours per week for agreements. In practice, you need to work at least 80 hours.
The second condition is that the agreement must last at least 4 weeks, i.e. a minimum of 28 calendar days. This requirement applies even if you have several directly related agreements with the same employer. If you meet both conditions, you are entitled to a pro rata share of paid leave, which is calculated according to the actual hours worked.
Did you know that in some cases self-employed workers are also entitled to paid leave? When? The next article will tell you.
The calculation of leave on a FTE follows the same principles as for a regular employment relationship – only it is calculated in hours, not days. The amount of holiday depends on how many hours you actually work and how many weeks of holiday your employer gives you each year (at least 4, but often 5 weeks).
A simple rule applies: the more hours you work in a year, the more you are entitled to paid time off.
For example, if you work 400 hours in a year and your company offers 4 weeks of holiday a year, you will be entitled to around 30 hours of holiday. If you normally work 6 hours a day, that’s about 5 days off.
For a more accurate calculation, you can use one of the online holiday calculators available for FTEs.
If social security is deducted from your gross remuneration when you work on a FTE (i.e. if your monthly income exceeds CZK 4,500 for one employer), you are also entitled to sickness benefits. On the other hand, if your income is lower and no social security contributions are deducted from the agreement, you are not entitled to sick pay.
We’ve answeredthe most common questions about sick pay in our article.
If you work on a contract of employment (FTE), you may or may not be entitled to count this time towards your pension. It all depends on whether you pay social security on your wages, which includes pension contributions.
To count for pension purposes, your gross monthly remuneration must exceed the threshold amount, which is set at CZK 4,500 for 2025. If you exceed this threshold, you become a member of the pension insurance scheme – the relevant insurance contributions are deducted from your wages and the period of working on a FTE counts towards your entitlement to a retirement pension.
On the other hand, if you earn less than CZK 4,500 per month on a part-time job, social insurance is not deducted from your remuneration and the period is not counted towards your pension insurance, even if you actually worked. If you do not have other earnings or insurance paid for by the state (for example, as a student, pensioner or parent on parental leave), you may not have enough years of insurance to qualify for a pension in the future. That’s why it’s a good idea to consider a voluntary pension scheme in this case.
Our article explains in detail what exactly is counted as pensionable service.
Termination of an employment contract (FTE) follows simpler rules than termination of a regular employment contract.
Unless a special method of termination of the LTA has been agreed, the agreement may be terminated either by mutual agreement of the parties or by unilateral notice with a 15-day notice period starting from the date of delivery of the notice to the other party. The third option is immediate termination of the agreement, which is possible only in exceptional cases – in particular if there is a gross breach of one of the parties’ obligations.
If the employment relationship ends and the employee does not sign up for payment as a person with no taxable income, he or she may be required to pay health insurance separately.
For example, you can use this simple template to terminate your VPA:
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 employment agreement concluded on 1 April 2025 between me and my employer:
Name of employer: Firma s.r.o.
Registered office: Pracovní 456, 110 00 Praha
ID: 12345678
I hereby resign in accordance with the provisions of Section 77(5) of the Labour Code. The notice period is 15 calendar days and starts on the day following the delivery of this notice to the employer.
In Prague, 31 May 2025
Signature:
…………………………………………….
Jan Novák
The amendment to the Labour Code has brought significant changes for employees working on the basis of an employment agreement (FTE). The aim of these changes was to strengthen the rights of so-called “agreement workers” and to bring their working conditions closer to the standard employment relationship. The main changes include:
What extra pay are you entitled to? The next article will tell you.
Even if you are self-employed, you can still earn extra money by means of an employment contract (FTE). Such a combination of a trade and an FTE is perfectly legal and common, but you just need to take into account some specifics in terms of taxes and insurance.
From a tax point of view, as a self-employed person you will file a tax return for the whole year. In it, you will list both the income from the business and the income from the FTE. This allows you to reduce your tax base after tax credits (e.g. for the taxpayer, for children) have been applied. If there is an overpayment, the state will reimburse it to you when it is settled. To complete your return, you will need taxable income certificates from all the employers you have worked for on a FTE.
Concluding an employment agreement can sometimes be paradoxically 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”.
This overlap is possible both with the same employer and with another employer, but there are a few rules to follow:
If you work on a principal employment relationship (HPP) and a work arrangement (FTE) with the same employer, this is possible, but under certain conditions. It is essential that they are different types of work. Your employer cannot enter into two contracts with you for the same activity – this would be contrary to the Labour Code and would be considered circumvention of the law.
Practical example: an employee has an employment contract as an administrative worker, but at the same time he is providing social media management on a fixed-term contract. The important thing is that these are indeed different activities and that both contracts are properly and separately concluded.
Health and social security contributions are always payable on the income from the HPP. The FTE is treated separately and therefore insurance is only payable if your monthly income exceeds CZK 4,500.
As far as taxes are concerned, the amount of income tax depends on whether you have signed a tax declaration (the so-called pink form) with your employer. As you can only sign it with one employer in a given month, it is usually signed with the HPP. For a DPP, income tax is then withheld in advance at 15%, with no taxpayer’s credit available.
The combination of a main employment relationship (HPP) with one employer and a work arrangement (WPA) with another is generally possible, but has its limitations. If you want to work on a FTE in a similar field to your HPP, you must have the consent of your main employer.
Practical example: Ms Eva works on a full-time basis as an accountant in a small company. She is offered a part-time job as a FTE – doing bookkeeping for another company. As this is in the same field, and therefore potentially a competing activity, she must first obtain written consent from her main employer. For example, if she were to help with babysitting or tutoring on a FTE, no consent would be needed – this would be a different activity, unrelated to her employer’s business.
In this case, too, health and social insurance and income tax are automatically paid on the HPP, and the insurance is only paid on the FTE if the monthly income exceeds CZK 4,500. You may only sign a tax declaration (the pink paper) with one employer in a given month, usually the one where you have your HPP.
If you are registered with the Job Centre and are currently receiving unemployment benefit, you must not have any additional earnings. However, if you are not receiving benefits, you can continue to earn extra money on a work permit (FTE). However, you must comply with a few conditions or risk being removed from the register:
When you start work, you must report it to the relevant Job Centre no later than the day you start work. The notification must be made regardless of the amount of remuneration and applies to any gainful activity. If you work for more than one employer, their earnings are added together for the purposes of assessing the limit.
In addition, you must prove to the Job Centre how much you have earned each month. The most common form used for this is a Certificate of Activity (Non-Colluding Employment) form issued by your employer.
Your gross monthly earnings must not be more than half the minimum wage to stay on the jobseeker’s register. In 2025, this means a maximum of CZK 10,400 per month. If you exceed this limit, the authority will remove you from the register.
While you are registered with the Office, you are a state insured person – the state pays your health insurance for you. However, if you also work on a part-time basis, your employer pays health insurance at 4.5% of your actual earnings. However, you must provide your employer with a certificate of registration with the Social Insurance Office for this benefit to apply.
When is unemployment benefit cut? Find out in the next article.
These groups are subject to most of the same rules as other employees, but their status also gives them a number of advantages, particularly in terms of insurance and tax credits.
The main difference lies in the number of hours worked and the threshold for taxation and social security and health insurance:
| DPP | FTE | |
|---|---|---|
| Maximum number of hours worked | 300 hours per year | 20 hours per week |
| Levies | When exceeding the limit of 11 500 crowns | If the limit exceeds 4 500 crowns |
We have discussedthe performance of work agreement in our separate article.
The work activity 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:
EMPLOYMENT AGREEMENT
Concluded in accordance with Section 76 et seq. of Act No. 262/2006 Coll., the Labour Code, as amended.
Employer:
Company: [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 employer]
Employee:
Name and surname: [Name and surname]
Birth number: [Birth number]
Resident: [Residential address]
ID number: [ID card number]
The employee agrees to perform the following work for the employer:
[Description of activity – e.g. administrative assistance, stock handling, etc.]
The place of work is:
[Address of workplace]
This Agreement is for a fixed period from [Start Date] to [End Date].
The working hours shall not exceed on average half of the weekly working hours (i.e. 20 hours per week).
For work performed, the staff member shall be remunerated at the rate of [Amount in CZK] CZK per hour.
The remuneration shall be paid no later than [Date of payment] to the employee’s bank account No. [Account number].
The employee undertakes to perform the work personally, conscientiously and in accordance with the employer’s instructions, to comply with the employer’s internal regulations and safety rules and to inform the employer of any impediment to work.
The employer undertakes to assign the employee to the agreed work and to provide him with the necessary conditions, to ensure health and safety at work and to pay remuneration properly and on time.
The employer has the right to control the quality and manner of work and to provide binding instructions on the organisation of work.
This Agreement shall enter into force on the date of signature by both parties. The Agreement may be terminated by giving 15 days’ written notice, starting on the date of delivery of the notice to the other party. Amendments to this Agreement may only be made in writing by agreement of both parties.
This Agreement shall be drawn up in duplicate, each Party receiving one copy.
At [Place], on [Date]
Employee’s signature:……………………………………..
[Name and Surname]
Employer’s signature:……………………………………..
[Name and position]
What are the employer’s obligations in the case of FTEs and FTEs? Our article deals with this in detail.
Let’s start by saying that this type of agreement pays off primarily for companies, i.e. employers. In the case of really low earnings up to CZK 4,500 per month, they do not have to pay social security and health insurance and, unlike a traditional employment contract, they can basically part with the employee at any time.
In the light of the above, is this agreement at all advantageous for the employee? There are advantages for them too, especially for students (up to the age of 26) and seniors who want to earn extra money for their retirement. The state automatically pays health insurance for both of these groups. If they have earnings from employment, they must pay health insurance, but the minimum assessment base does not have to be met and health insurance is always calculated on the actual assessment base.
For some people, it may also be an advantage to be able to quickly terminate the employment relationship, for example, if they are looking for stable employment and are only temporarily “temping” somewhere.
An alternative to an employment agreement may be a contract of employment (CBA) or a classic employment contract with a part-time arrangement in certain circumstances. In the case of a DPP, you are allowed to work a maximum of 300 hours for one employer per year. In the case of an employment contract, you get a much higher level of security.
An employment contract (FTE) is a flexible working relationship that allows you to work a maximum of 20 hours per week on average for one employer. It is concluded in writing and must include the type of work, remuneration, duration and scope of work. In 2025, the minimum hourly wage is CZK 124.40. If the monthly income exceeds CZK 4,500, social security (6.5%) and health insurance (4.5%) are payable, with the employer paying an additional 33.8%. For lower incomes, no insurance is paid and tax is withheld at 15%. For higher incomes, advance tax is paid and tax credits can be claimed if a tax declaration is signed.
In the case of FTEs, holiday entitlement is granted if the agreement lasts at least 4 weeks and a minimum of 80 hours are worked. If social insurance is paid, you are also entitled to sickness benefits and pension credits. 15 days’ notice is possible. An amendment to the Labour Code brought entitlement to weekend allowances, shift scheduling 3 days in advance, equal treatment and the possibility to apply for admission to HPP after 180 days of work.
The DPP is also suitable for students, pensioners or parents on parental leave – they are covered by state health insurance and do not pay any premiums up to the limit of CZK 4,500 per month. Under certain conditions, working on a FTE can be combined with a business or a main job. Jobseekers can earn up to CZK 10,400 a month on a FTE, but they must report everything to the Labour Office.
Our team of experienced attorneys will help you solve any legal issue. Within 24 hours we’ll evaluate your situation and suggest a step-by-step solution, including all costs. The price for this proposal is only CZK 690, and this is refunded to you when you order service from us.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
In person and online. Just choose the appropriate service or opt for an independent consultation when you are unsure.
