Basic Tax Deduction per Taxpayer: How to Claim It as an Employee or Self-Employed Individual

Quick Overview

• The basic tax deduction per taxpayer in 2026 is 30,840 CZK per year, or 2,570 CZK per month.
• For employees, the taxpayer deduction is generally claimed each month through a signed tax return.
• For self-employed individuals, the taxpayer deduction is generally claimed as a one-time amount on the tax return.
• The annual deduction is not reduced based on how many months you worked or were self-employed.
• The tax credit directly reduces the calculated tax, not the tax base, and cannot, on its own, generate a tax bonus.

Are you unsure whether you’re claiming the taxpayer deduction correctly or whether you risk a tax assessment due to an error? As part of our tax legal advisory services, we’ll review your specific situation with you and propose a legally sound course of action.

What Is the Taxpayer Deduction?

The taxpayer deduction is a tax deduction (not a tax-deductible item!)—that is , an amount that is subtracted directly from the calculated tax. This represents a fundamental difference from non-taxable portions of the tax base (often referred to in layman’s terms as “deductible items”): these are subtracted from the tax base; the tax is calculated based on this reduced base, and only then do you apply any tax credits.

Who Is Eligible for the Taxpayer Discount

The basic rule is simple: any individual income tax payer who has taxable income (from employment or business) in a given year is eligible. The deduction is annual and is always claimed in full (it is not prorated by month), even if you worked only part of the year. During the year, employees typically claim it monthly through their employer, while self-employed individuals claim it as a lump sum on their tax return.

Note for non-residents (foreign nationals): if you are a non-resident for tax purposes in the Czech Republic, the law imposes additional restrictions—you can typically claim tax credits and tax benefits only if you are an EU/EEA resident and your income from the Czech Republic constitutes at least 90% of your total annual income.

How much is the taxpayer deduction in 2026?

In 2026, the basic taxpayer deduction is 30,840 CZK per year, or 2,570 CZK per month. This amount has not changed from 2025. If your calculated tax for the entire year is less than 30,840 CZK, the deduction will reduce it to zero at most. However, you will not receive the unused portion as a tax bonus.

A tax bonus can only arise from the tax credit for children. It applies if the credit exceeds your tax liability and you meet the income requirements (you must have income from employment or business activities amounting to at least six times the minimum wage).

How to Claim the Taxpayer Deduction as an Employee

For employees, the taxpayer deduction works such that the employer generally takes it into account when calculating monthly tax prepayments. To be able to use it on an ongoing basis, you must submita Taxpayer Declaration (the so-called “pink form”) to your employer. However, you may only have it signed by one employer in any given month—otherwise, the deduction would be applied twice, which is a problem (see the section below on unauthorized deductions). If you do not sign the pink declaration, your employer will withhold tax without the credit, and you will have to make up the difference during the annual tax settlement or on your tax return.

An employee who is not required to file a tax return may ask their employer for an annual settlement of advance payments and tax benefits. The annual settlement calculates the taxpayer’s full-year tax credit.

Example – full-year employment: Gross monthly salary of 30,000 CZK → 15% tax = 4,500 CZK. A monthly tax credit of 2,570 CZK reduces the tax to 1,930 CZK. Over the course of a year, the tax credit saves 30,840 CZK.

DPP, DPČ, and Withholding Tax

Without a signed “pink declaration,” income from DPP and DPČ contracts is subject to withholding tax up to a certain limit. Such income is not usually reflected in the annual tax settlement—but you can file your own tax return, include the DPP income in your taxable income, and claim a refund of part of the withheld tax through the taxpayer deduction.

How to Claim the Taxpayer Deduction as a Self-Employed Individual

The taxpayer deduction for self-employed individuals is typically claimed on the tax return. The self-employed individual first calculates their income tax and then subtracts the basic taxpayer deduction of 30,840 CZK from the resulting amount.

Self-Employed Individuals Under the Flat-Rate Tax Regime (“Flat-Rate Tax”): Please note—if you are under the flat-rate tax regime, you do not file a standard tax return and cannot claim standard tax credits ( including the taxpayer credit). The flat-rate tax is a single monthly payment (which includes both tax and insurance premiums), and in exchange for this simplicity, you forgo these deductions.

Example—a self-employed person with low income: Taxbase (after expenses) 200,000 CZK → tax 30,000 CZK. A 30,840 CZK deduction reduces the tax to 0 CZK —but it cannot go below zero.

Unclaimed taxpayer deduction

This happens often: you forget to sign the pink form, or you don’t sign it until halfway through the year. In that case, the deduction won’t be applied monthly, but you won’t lose any money:

• If you are not required to file a tax return, ask your employer for an annual tax settlement. The deadline for this request is usually mid-February. The annual tax settlement will calculate your full-year deduction and refund any overpayments.
• If you are required to file a tax return (e.g., you have multiple employers at the same time, income from self-employment, etc.), you’ll claim the tax credit on your return.
• If you did not claim the tax credit in the past, you can correct this by filing an amended return as long as the three-year statute of limitations for tax assessment is still in effect.

Example: Jana started working in January but didn’t sign the pink form until April. Her employer withheld more tax from her for January through March. In her annual tax settlement (or tax return), she will claim the full annual tax credit of 30,840 CZK and receive a refund of the overpaid amount.

From practice: A common mistake employees make is believing that if they did not have a signed tax declaration for part of the year, they have permanently lost the corresponding portion of the deduction. However, the basic taxpayer deduction is not prorated by the number of months during the annual settlement, so the full 30,840 Kč can be claimed if the conditions are met.

Unjustifiably Claimed Taxpayer Deduction

A common mistake: signing a taxpayer declaration with two employers at the same time. The deduction was claimed twice, and part of the tax is missing. How to fix this?

Identify the error → file an amended tax return (and pay the additional tax). If you file the amended return yourself and before the tax office requests it, you’ll avoid a 20% penalty on the additional tax assessed, which would otherwise apply if the tax administrator were to assess it.

Expect to pay late payment interest —for taxes, this is generally calculated as the CNB repo rate plus 8 percentage points, with the rate depending on the half-year in which the delay occurred. You pay interest from the fourth day after the due date until the date of payment.

You have time to correct the error as long as the tax assessment period is still open (generally 3 years from the original due date).

Have you discovered that you claimed a tax credit incorrectly, or is the tax authority assessing additional tax because of this? We’ll review your case, help you correct the error, and, if necessary, assist with communication or your defense against the tax authority.

Summary

The basic taxpayer deduction for 2026 is 30,840 CZK per year, or 2,570 CZK per month, and is deducted directly from the calculated tax. An employee may claim it on an ongoing basis through the Tax Declaration for a Single Employer, while self-employed individuals generally claim it on their tax return; an exception is a self-employed individual whose tax is equal to the flat-rate tax. The annual basic deduction is not prorated based on the number of months worked or in business, and tax non-residents of the Czech Republic may also claim it. If you did not claim it during the year, it can be included in your annual tax settlement or tax return provided the conditions are met; conversely, if you mistakenly claimed it twice, you must correct the situation and pay any resulting tax difference.