When you say taxpayer rebate, many of you think of “something in your paycheck” that reduces your tax each month. And you’re right – the basic taxpayer rebate is the most common and easiest way to directly reduce your calculated personal income tax.
When you say taxpayer rebate, many of you think of “something in your paycheck” that reduces your tax each month. And you’re right – the basic taxpayer rebate is the most common and easiest way to directly reduce your calculated personal income tax.
It’s not a complicated construction: you don’t consider how many months you worked or how much your income was. The important thing is to know who’s entitled, exactly how much the allowance is in 2025, how to claim it correctly (if you’re employed or self-employed), and what to do if you accidentally claim it twice or not at all.
A taxpayer’s allowance is a tax credit (not a deductible item!) – that is, an amount that is deducted directly from the tax calculated. This makes a crucial difference to the non-taxable parts of the tax base (often called deductible items in layman’s terms): these are deducted from the tax base, only on this reduced base is the tax calculated, and only then do you claim the rebate.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
The basic rule is simple: every personal income taxpayer who has taxable income (from employment or business) in a given year is eligible. The allowance is annual and always applies in full (not reduced by month), even if you only worked for part of the year. It is usually claimed monthly by the employee through their employer during the year, and in one lump sum on the self-employed person’s tax return.
Attention non-residents (foreigners): if you are a tax non-resident of the Czech Republic, the law adds a restriction – you can typically only claim the rebates and tax benefits if you are an EU/EEA resident and your income from the Czech Republic makes up at least 90% of your total income for the year.
In 2025, the basic taxpayer discount is CZK 30,840 per year, or CZK 2,570 per month. If your calculated tax for the year comes out lower than CZK 30,840, the discount will simply knock it down to zero, but you can’t go into the negative – because the taxpayer discount itself doesn’t attract a tax bonus.
Only the child tax credit can generate a tax bonus. This arises if the benefit is higher than your tax and you meet the income conditions (you must have income from employment or business of at least six times the minimum wage – for 2025 this works out at £124,800 a year).
How to claim the child tax credit correctly and when do you get the tax bonus? This is explained in the next article.
In order for your employer to take the allowance into account each month, you must sign a Taxpayer’s Declaration (known as a pink declaration) with your employer. However, you can only have this signed with one employer in any one month – otherwise the allowance will be claimed twice, which is a problem (see section on unjustified allowance below). If you don’t sign the pink slip, your employer will deduct tax without the rebate and you will only make up the difference in your annual statement or tax return.
An employee who does not have to file a return can ask the employer for an annual settlement of the advance payments and tax credit (for 2024, this was due by February 17, 2025). The annual settlement will calculate the full year’s credit for the taxpayer.
Example – year-round employment: gross salary CZK 30,000 per month → tax 15% = CZK 4,500. The monthly discount of CZK 2,570 reduces the tax to CZK 1,930. In a year, the discount saves CZK 30,840.
Without a signed pink slip, remuneration from FTE and DPP is subject to withholding tax up to a certain limit (for 2025 the limit is CZK 11,500 for FTE and CZK 4,500 for DPP). Such income is not usually included in the annual tax return – but you can file your own tax return, include the FTC in the taxable amount and get a refund of some of the tax withheld via the taxpayer rebate.
Self-employed people claim basic ratepayer relief on their tax return. The procedure is simple: you calculate the tax (15% and possibly 23% above the statutory annual limit) and then deduct the CZK 30,840. If the tax is less than the allowance, it comes to CZK 0.
Self-employed in the flat-rate scheme (“flat-rate tax”): A word of caution here – if you’re in flat tax, you don’t file a regular tax return and you don’t apply the regular tax allowances (including the taxpayer discount). The flat rate tax is one monthly payment (which includes the advance tax and insurance premiums) and you lose the discounts in exchange for simplicity.
Example – low-income self-employed: tax base (after expenses) CZK 200,000 → tax CZK 30,000. A discount of CZK 30,840 knocks the tax down to CZK 0 – but it can’t go beyond zero.
It happens a lot: you forget to sign the pink declaration, or you don’t sign it until halfway through the year. The monthly rebate then doesn’t go through, but you don’t lose any money:
Example :Jana started in January but did not sign the pink declaration until April. Her employer withheld more tax for January-March. She claims the full annual allowance of CZK 30,840 in her annual statement (or return) and gets the overpayment back.
Typical error: signing a taxpayer declaration for two employers at the same time. The discount is claimed twice and part of the tax is missing. How to get out of it?
I find the mistake → file an additional tax return (and pay the tax back). By filing the additional return yourself, and before the tax office asks you to do so, you can avoid the 20% penalty on the tax assessed, which would otherwise be incurred if the tax office makes an assessment.
Expect to pay interest on late payment – this is generally calculated as the CNB repo rate + 8 percentage points for taxes, with the rate based on the half-year in which the delay occurred (for the first half of 2025, it is about 12% p.a.). You pay interest from the fourth day after the due date until the date of payment.
You have time to correct it while the tax assessment period is running (generally 3 years from the due date).
Have you filed the wrong tax return? Find out how to correct this mistake so you don’t get into trouble unnecessarily.
The basic ratepayer credit is a tax credit (not a deductible item) that directly reduces the tax calculated. In 2025, it is CZK 30,840 per year (CZK 2,570 per month), it is not pro-rated and can be used by anyone with taxable income from employment or business in a given year; restrictions apply for non-residents (typically EU/EEA resident and at least 90% of income from the Czech Republic). It is claimed monthly by the employee via a “pink declaration” with a single employer, by the self-employed on their return; it is not applicable in the flat-rate regime.
If the discount is not applied during the year (e.g. unsigned declaration), it is calculated in the annual settlement of advances or in the tax return; it can be retroactively corrected within 3 years. Resolve an unjustified double claim (simultaneous signatures with two employers) by a supplementary return and additional payment; this avoids a 20% penalty on the tax assessed. However, expect interest on late payment at the CNB repo rate + 8 p.p. (for H1 2025, approx. 12% p.a.) from the 4th day after the due date until the date of payment.
You don’t have to. The basic discount is not reduced by month. It is always CZK 30,840 per year (CZK 2,570 per month for an employee).
No. You can only have one employer sign the pink slip per month. Otherwise you risk underpayment of tax and penalties.
Often, yes – file a tax return, include the FTC in the taxable amount and get the tax back through the taxpayer rebate.
Not in the flat-rate scheme – you don’t claim the normal discounts because you don’t file a return. Consider whether the flat-rate tax is still worthwhile after taking into account the loss of allowances.
It’s not. In practice, it is often confused, but the taxpayer discount is not a deductible item, but a tax credit.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
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.
