Do you want to start a business while studying, working or on parental leave? In our article you will find everything you need to know about the secondary activity of a self-employed person, from the conditions to the calculation of taxes to the transition to the main activity.
Most people think of a self-employed person as a classic sole trader who has a business as their main source of income. In practice, however, many people run a business as a sideline. Being self-employed as a secondary activity means that you have a business only as a supplement to your main source of income, such as employment, study, parental leave or retirement. Conversely, if you are on maternity leave, registered with the Job Centre or have no other main income, your business is considered your main business.
A typical example might be an employee who moonlights in the evenings creating websites or a student who sells their photographs online. Such a business is an ideal way to try out the life of an entrepreneur without much risk.
But beware, if you quit your job during the year, for example, your self-employed status changes to principal. Be sure to keep an eye on this change, as the main business carries higher tax liabilities.
Avoid fines and unnecessary worries. Our lawyers will advise you on how to set up your contracts, business and tax obligations correctly.
If you want to run a business as a self-employed self-employed person, the first thing you will need to do is get a trade licence (often called a trade certificate). Setting up a trade for a secondary activity is the same as for a main activity, the trade licensing office does not distinguish you in this case. Differences only arise when paying social security and health insurance and when taxing your income.
If you are a student, for example, you must provide proof of your studies, which will give you more favourable conditions for your business. This can make your side income much less taxing.
As a self-employed secondary activity you have a major advantage in that you do not pay minimum social security and health insurance contributions unless your income exceeds a certain limit.
The basic limit for the self-employed for social insurance changes every year according to the average wage. If your income does not exceed this limit, you do not have to pay social security at all. But if you exceed the limit, you must pay social security, the amount of which depends on your actual earnings.
Calculating social security for self-employed people working in a secondary activity can be easily done online using various calculators available on the internet. Simply enter your annual profit to find out how much you will pay.
Health insurance is always compulsory for the self-employed on the side, but again it depends on your actual income. If you are an employee, student or on parental leave and only run your business in your spare time, the premium is calculated according to your actual income.
Running a business while studying is becoming increasingly popular. As a self-employed student, there are significant concessions. A typical example is a student of the University of Economics who provides translation services. He earns up to CZK 80,000 a year through his business and yet pays no social contributions because he does not exceed the limit set for the secondary activity of a self-employed person. He pays health insurance in the minimum amount according to his actual income.
Students have an additional advantage: they can provide proof of studies up to the age of 26 and save on contributions. Students can obtain a trade certificate quickly and easily, they only need proof of identity and a certificate from the school.
As a self-employed person in a secondary activity, you are obliged to file a tax return if your business income (i.e. turnover before deducting expenses) exceeds CZK 20,000 for the year. The obligation also applies to those who also have income from employment, as their employer cannot make an annual tax assessment. If your income from a secondary activity is less than CZK 20,000 and you have no other grounds for filing a return, you do not have to file a return. However, it’s often worth doing this voluntarily – for example, if you had advance tax deducted at work. Claiming flat-rate or actual expenses can result in an overpayment which the tax office will refund to you.
For example, Tereza, who works full-time in a bank and also runs a small online shop selling home cosmetics, earned CZK 18,000 in a year from her side business. In theory, she would not have had to file a tax return because her income from the business did not exceed CZK 20,000. Nevertheless, she will voluntarily file it because the application of the flat-rate expenditure will result in an overpayment of tax, which the state will refund to her.
You may have wondered whether you can enter the flat-rate regime as a self-employed person for a secondary activity. The answer is: yes, you can if you meet the basic conditions. The flat-rate tax is available to all self-employed people, whether they are in a main or a secondary business. This also applies to employees who have a business as a side activity. On the other hand, flat-rate tax is not available if you have ancillary income from rent, capital or other income exceeding CZK 50,000 per year, or if you are a VAT payer. The advantage of flat-rate tax is simplicity. You don’t have to deal with tax returns or reports to the Social Security and Health Insurance Institutions, you just pay one fixed amount per month. Whether this option is worthwhile for you needs to be carefully calculated according to your situation.
Tip: Did you know that there are also activities that you can do and receive financial remuneration for without having to be a registered trade? Find out how to do business without a trade in our article.
Once your side business starts earning more, there may be times when it is more profitable to switch from your side business to your main business. Switching to a main business means increased responsibilities – for example, you have to start paying minimum social security and health insurance contributions.
A change is advisable, for example, if your business is steadily generating significantly more income than your current job, or if you leave your studies or parental leave and the business becomes your primary source of income.
Sometimes it happens that the business doesn’t take off the way you’d like it to, or you discontinue it during the year. If you have zero or even negative income, you are still obliged to file reports with the health insurance company and the Social Security Agency if the business was active during the year. The good news is that if you run a side business and your profits do not exceed the decisive threshold, you do not pay social security at all. Health insurance is often not payable if you are also employed, a student, a pensioner or if the state pays the insurance premiums for you for another reason. However, you must still file the reports so that the health insurance company and the Social Insurance Institution have the correct information about your income and that the business was indeed secondary. If you have officially discontinued the activity, no obligations are deducted or reported for the period of discontinuation.
If you are self-employed on a side business – i.e. while working, studying, parenting or retired – you have a number of advantages over your main business, especially in terms of tax. You don’t pay social security at all if your annual profits don’t exceed 25% of the average wage for 2025; health insurance is only paid on actual profits and no advance payments are made if you are also employed, a student, on parental leave or retired. You have to file a tax return if your business income exceeds £20,000 per year or if you have income from employment because your employer cannot make an annual return. You can also enter the flat-rate scheme when you are working on the side, if you meet the conditions, and pay one fixed monthly amount without having to file tax returns and statements. If you discontinue your business or have zero income, you have to file reports with the health insurance company and the Social Security Agency, but if you stay below the limit, you pay nothing. Switching to your main business makes sense if your business starts generating a steadily higher income than your job, or if you finish your studies or parental leave – expect to pay higher insurance premiums then.
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