Quick Overview:
A part-time self-employed person may engage in business activities, for example, while employed, while studying (up to age 26), while receiving an old-age or disability pension, while receiving maternity benefits from an employer, while caring for a child under 4 years of age, or while receiving parental benefits. For social insurance purposes, the threshold amount for 2026 is 117,521 CZK of the tax base; if the tax base for the entire year is lower than this amount, there is no obligation to participate in the pension insurance system. For health insurance, minimum advance payments are not usually required for a secondary activity, but the premium is calculated based on actual profit.
When Is a Business Considered a Secondary Activity?
A secondary self-employment activity means that you have a legally recognized reason why your business is considered secondary.
The Czech Social Security Administration (ČSSZ) states that self-employment is considered secondary, for example, when a self-employed person in a given year:
- held a job that qualified them for sickness insurance coverage,
- was entitled to a disability pension or was granted an old-age pension,
- was entitled to maternity benefits or sick pay due to pregnancy and childbirth under the employees’ sickness insurance,
- personally cared for a child under 4 years of age,
- cared for a dependent person under the conditions prescribed by law,
- was a dependent child, typically a student, but no older than 26 years of age.
Typical example: Jana works as an accountant under an employment contract and, in the evenings, keeps tax records for small clients as a self-employed person. Because her employment entitles her to sickness insurance, her business activity may be considered a secondary activity for social insurance purposes.
Another example: A college student under the age of 26 starts a sole proprietorship to create websites. If they meet the conditions for a dependent child and report the reason for the secondary activity, they can take advantage of the secondary self-employed status.
Be mindful of parental leave. A self-employed person is not on “parental leave” as defined by the Labor Code, since that benefit is intended for employees. For entrepreneurs, what matters is whether they personally care for a child under 4 years of age or whether, for the purposes of the Czech Social Security Administration (ČSSZ), their entitlement to the parental allowance is taken into account. The Czech Social Security Administration (ČSSZ) states that when claiming the parental allowance, it is not necessary to submit a sworn statement regarding personal care, as compliance with the conditions was already addressed when applying for the parental allowance.
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How to Get Started and What to Report to the Authorities
A side business is established in the same way as a primary business. When you register your business, the Trade Licensing Office does not distinguish between whether you will be operating as a self-employed person with a primary or secondary business. The difference becomes apparent only in terms of social security and health insurance, as well as tax obligations.
The most common procedure is:
- select the correct trade category,
- register your business with the Trade Licensing Office or via the unified registration form,
- notify the tax office, the Czech Social Security Administration (ČSSZ), and your health insurance provider of the start of your business activities,
- specify to the Czech Social Security Administration (ČSSZ) why this is a secondary activity,
- keep records of income and expenses from the very first day.
The reason for the secondary activity is important mainly for social insurance purposes. The Czech Social Security Administration (ČSSZ) states that self-employed individuals must report details regarding their secondary self-employment no later than in the income and expense statement for the calendar year in which they wish to be considered a self-employed person engaged in a secondary activity. Subsequent documentation of the reason for engaging in secondary self-employment will not be considered.
Employees should also keep one more thing in mind: competition with their employer. If you wish to run a business in the same field while employed, you may need your employer’s prior written consent. This typically applies to situations where you work as a graphic designer at an advertising agency and simultaneously wish to provide graphic design services to clients as a self-employed individual.
In practice, we recommend not only obtaining a business license but also drawing up contracts. Even a small side business should have clear rules: who the client is, what you’re delivering, at what price, by when, who is responsible for defects, and what happens in the event of a late payment.
Social Security and Health Insurance in 2026
The biggest advantage of a side business is in the contributions. Mandatory participation in social insurance does not arise automatically. As for health insurance, the minimum assessment base does not apply to many self-employed individuals with side businesses.
Social Insurance
For self-employed individuals engaged in a secondary activity, the decisive amount for 2026 is 117,521 CZK of the tax base. If you engage in a secondary activity for the entire year and your tax base does not reach this amount, you will not be required to participate in pension insurance. If you are self-employed for only part of the year, the decisive amount is reduced by 9,794 Kč for each calendar month in which the activity was not performed.
The tax base is not the same as gross revenue. Simply put, it is income after deducting expenses. So, if a graphic designer invoices 200,000 Kč but claims a 60% flat-rate expense deduction, their tax base is 80,000 Kč. With a year-round secondary activity, they would fall below the threshold amount in 2026.
If you exceed the threshold amount or voluntarily enroll in pension insurance, you become obligated to pay social insurance. The minimum advance payment for a side job in 2026 is 1,574 Kč per month.
Good news for self-employed individuals just starting out: The Czech Social Security Administration (ČSSZ) states that self-employed individuals who began or resumed their business after December 31, 2024, and who did not engage in self-employment during the previous 5 years, are exempt from the obligation to pay advance insurance contributions during the first two calendar years of self-employment. However, this does not mean that the insurance contributions themselves are waived; that is addressed only after the tax return is filed.
Health Insurance
Health insurance works differently. A self-employed person always has obligations to the health insurance company as long as they are engaged in self-employment, but for secondary activities, minimum advance payments are often not required. VZP states that the insurance premium is calculated as 13.5% of the assessment base, which is 50% of income from self-employment after deducting expenses.
If you are self-employed and the state is paying your insurance premiums on your behalf—for example, as a student, retiree, or parent receiving parental benefits—the minimum assessment base does not apply to you as it does for primary self-employed individuals, and you will pay the remaining premiums after submitting your tax return. VZP states that when self-employment and state-funded coverage overlap, there is no obligation to meet the minimum assessment base or to pay advance premiums; the insurance premiums are paid for the entire year after filing the tax return.
When self-employment is combined with employment, it depends on whether the self-employment is the primary source of income. If it is not the primary source of income and insurance premiums are paid in the employment at least based on the minimum for employees, there is no obligation to meet the minimum assessment base as a self-employed person or to pay advance payments; the insurance premiums are paid after the tax return is filed.
For comparison: the minimum monthly health insurance advance payment for a primary self-employed person in 2026 is 3,306 CZK. However, a secondary self-employed person may not be subject to this requirement if they meet the conditions for an exemption.
Taxes, Expense Allowances, and the Flat-Rate System
Running a business as a side activity constitutes taxable income from self-employment. Just because this income is earned alongside a job or while studying does not mean it is exempt from taxation.
Generally, anyone whose annual taxable income exceeds 50,000 CZK is required to file a tax return, unless the income is exempt or subject to withholding tax. A tax return must also be filed if the taxpayer reports a tax loss.
A special practical rule applies to employees. If an employee has income from employment and has filed a tax declaration, they are not required to file a tax return provided that, apart from their employment, they have no other income under Sections 7 through 10 of the Income Tax Act exceeding 20,000 Kč. For a side business while employed, the 20,000 Kč threshold is therefore very important.
Example: Petra is employed and runs a small side business. She earns 18,000 Kč from her business over the course of a year and has no other reasons to file a tax return. If she meets the conditions for annual tax settlement with her employer, she does not need to file a tax return. However, if she earns 35,000 Kč from her business, she will exceed the 20,000 Kč limit and will need to file a tax return.
Self-employed individuals can claim actual expenses or a flat-rate expense allowance depending on the type of activity. The flat-rate expense allowance is often practical for a side business because it reduces administrative work. However, it is not always suitable. If you have high actual costs, it may be more advantageous to keep records of actual expenses.
The flat-rate system isn’t for everyone
The flat-rate system can be convenient because you pay a single monthly flat-rate advance payment that covers income tax, pension insurance, and health insurance. In 2026, the monthly flat-rate advance payment is 9,984 CZK in the first bracket, 16,745 CZK in the second bracket, and 27,139 CZK in the third bracket.
However, caution is needed when it comes to side jobs.The flat-rate regime is not automatically suitable for every self-employed person with a side job, and an employee with a traditional salary taxed via advance tax payments generally cannot use it. One of the conditions of the flat-rate regime is that, as of the first day of the relevant tax period, the taxpayer must not be engaged in any activity that generates income from employment, with the exception of income taxed at source.
The flat-rate regime may therefore make sense, for example, for certain retirees, parents, or students running a business, but for an employee with a side business, it will often be ineligible or disadvantageous. Before opting into the flat-rate regime, it is worth calculating not only the tax but also social security and health insurance contributions.
Transition to Primary Employment, Zero Income, and Real-Life Scenarios
A side business can very easily become a primary business. This typically happens when you leave your job, finish your studies, stop receiving parental benefits, or the basis for your side business ceases to exist. Self-employment is considered a primary activity in those calendar months in which it is not considered a side business.
Practical example: Tomáš is employed and runs an e-shop on the side. In July, he terminates his employment and continues his business. Starting from the month in which he no longer has a reason for secondary self-employment, he must operate under the primary self-employment regime. This may entail an obligation to pay minimum advance payments.
Even if you don’t earn a single crown from your business, this does not automatically mean you have no obligations. If the business was active, you must file the required reports. VZP states that every self-employed person must submit a report to the health insurance company detailing the tax base for the previous year; starting January 1, 2026, self-employed individuals are required to submit the report for the year 2025 to VZP electronically.
A report on the self-employed person’s income and expenses is submitted to the Czech Social Security Administration (ČSSZ), and it is in this report that it is determined whether the activity was primary or secondary and whether participation in pension insurance arose. Therefore, do not put off declaring your activity as secondary indefinitely. If you suspend your business, the activity is not carried out during the suspension period. It is advisable to notify the relevant institutions of the suspension to avoid confusion regarding advance payments, reports, and the assessment of whether the activity is primary or secondary.
Practical scenarios:
Employee with a small business:If the employee’s job triggers participation in sickness insurance and the business is not the primary source of income, the business may be considered a secondary activity. Social insurance may not be required if the tax base is low, and health insurance premiums are usually paid based on actual profit.
Students under 26:A student may be classified as a self-employed person with a secondary business as a dependent child. However, they must take into account their age, type of study, and the documents required by the Czech Social Security Administration (ČSSZ).
Parent with a young child:Personal care for a child under 4 years of age or eligibility for parental allowance may be grounds for secondary self-employment. According to the Czech Social Security Administration (ČSSZ), this circumstance is taken into account for parental allowance without the need to submit a sworn statement, provided the conditions were addressed with the Labor Office.
Retiree with Additional Income:An old-age pension or entitlement to a disability pension may be grounds for engaging in a secondary activity. However, according to the Czech Social Security Administration (ČSSZ), early retirement is not a valid reason for engaging in a secondary self-employed activity.
Summary
Running a business as a side activity is an advantageous way to start a business with lower social security contributions and less risk. However, a side activity is not just a matter of income level. You must have a legally recognized reason, such as employment, study, retirement, child care, or parental allowance.
In 2026, the key threshold amount for social insurance for self-employed individuals engaged in a secondary activity is 117,521 Kč of the tax base. If your tax base for the entire year is lower than this threshold, you are not required to participate in the pension insurance system. If you exceed the threshold amount, the minimum advance payment for a secondary activity is 1,574 Kč per month.
For health insurance, premiums are calculated based on actual profit, but self-employed individuals engaged in secondary activities are often not required to meet the minimum assessment base or pay advance payments. Tax returns are filed based on income levels, and for employees, the limit of 20,000 Kč in other income is important. The flat-rate scheme can be useful, but a typical employee with a standard salary generally cannot enroll in it.
Frequently Asked Questions
When is self-employment considered a secondary activity?
Secondary employment may arise, for example, in the case of employment that qualifies for health insurance coverage, while studying until the age of 26, while receiving an old-age or disability pension, while caring for a child under the age of 4, or while receiving parental benefits.
How much can I earn as a part-time self-employed person without social security?
In 2026, the threshold amount is 117,521 Kč of the tax base for those engaged in a secondary occupation for the entire year. If the tax base does not reach this amount, there is no obligation to participate in the pension insurance system.
What if I'm in business only part of the year?
The base amount for social insurance is reduced on a pro rata basis. For 2026, 9,794 Kč is deducted for each calendar month in which self-employment was not carried out.
Do part-time self-employed individuals have to pay health insurance?
Yes, health insurance is always handled, but for secondary employment, the minimum advance payments are often not made. The insurance premium is usually calculated based on actual profits after the tax return is filed.
Does an employee with a side business have to file a tax return?
If an employee has other income in addition to their wages, as defined in Sections 7 through 10 of the Income Tax Act, that exceeds 20,000 Kč, they are generally required to file a tax return. For lower amounts of income and if certain other conditions are met, an annual tax settlement with the employer may suffice.
Can an employee with a side business enroll in the flat-rate tax scheme?
An ordinary employee with a standard salary generally does not. One of the conditions of the flat-rate system is that the taxpayer does not engage in any activity from which they derive income from employment, except for income subject to withholding tax.
