Confirmation of income: What is it for, who issues it and what must not be missing

Quick overview

• An income certificate shows how much you earn and whether you have a regular income.
• For employees, it is issued by the employer; for self-employed workers, it is usually supported by tax returns, statements for the Social Security and Health Insurance Institutions, or bank statements or invoices.
• You will most often need it for mortgage, benefit claims, rent, maintenance, insolvency or foreclosure.
• Always check in advance whether the institution requires its own form – typically a bank or the Job Centre.

Are you dealing with an income certificate for child support, foreclosure, bankruptcy or an employer dispute? In situations like this, it pays to have the other party or the office check not only the receipt itself, but also whether the correct documents are required by the other party or the office. We can help you with that too.

What is an income certificate and when do you need one?

An income certificate is an official document that proves your income for a certain period. It is issued at the request of an employee, business or welfare claimant and is used to prove financial creditworthiness. In other words, you will need it when you are asked to prove that you have money to pay. This document is to confirm that.

The most common situations where you will need proof of income:

• applying for a mortgage or consumer credit,
• renting an apartment or house (to verify the solvency of the tenant),
• applying for social benefits (for example, housing benefit),
• maintenance proceedings,
• insolvency, foreclosure or other litigation.

In common practice, you will encounter different variations of confirmation. They differ depending on who issues it and for what purpose. A certificate of income may be issued by an employer, by an accountant of a self-employed person, or a form issued by a specific institution (e.g. the MLSA or a bank) must be completed and submitted.

In practice, we see that the biggest problem is not the issuance of the certificate itself, but its applicability. Often the client brings a document which contains the amount of income but lacks the period, the signature of the responsible person or an indication of whether the employment relationship continues. The bank, the authorities or the court may then not recognise the certificate and the whole procedure is unnecessarily delayed.

What types of certificate are there according to the purpose

Under one name “income certificate” there are several documents with different elements. It depends on who issues it and to whom it is addressed. The most important differences are the content, the scope and the period for which the income is documented.

The most common types of income certificate are:

• Theemployment income certificate is issued by the employer and is used, for example, for banks or the tax office.
• Proof of monthly income is required by the Labour Office or the Ministry of Labour and Social Affairs and is used to apply for social benefits.
• The certificate of average earnings is used, for example, to calculate wage compensation or maintenance.
• The quarterly income certificate/quarterly income document is typically used for applications for recurrent benefits, where income is tracked over a longer period of time.
• A certificate of activity refers to self-employed or contract workers, it demonstrates the type and extent of activity, not directly income.

Each form has its own specifics. For example, banks often do not accept generic templates and require their own version of the form. Therefore, always find out what kind of confirmation a particular institution requires.

Who issues the certificate and how to apply for it?

It depends on what type of activity you are doing. If you are an employee, your employer will issue you with a certificate. It is usually issued by a payroll accountant or HR officer. They are obliged to issue such a certificate without delay if you need it, for example, for a bank or for the authorities. This obligation is based on the Labour Code.

If your employer refuses to issue the certificate, delays its issue or provides incomplete information, this is not just an administrative complication. It can complicate your application for benefits, mortgage or court proceedings. In this situation , we can help you prepare a notice to your employer and advise you on how to proceed so that the matter is not unnecessarily prolonged.

For self-employed persons, the situation is more complicated because they do not prove their income by a certificate, but by a combination of documents: a tax return, a summary of income and expenses for the health insurance company, a summary for the Czech Social Security Administration, or invoices or contracts.

If you work on an agreement, you must ask each employer for a separate certificate of activity or directly for a certificate of income if they keep it in their accounts.

You can usually request a certificate in person, by email or via an internal application. In some cases, you can also use a pre-populated form from the institution requesting it.

Confirmation for self-employed persons

As a self-employed person, it’s a little more complicated to get an income certificate than a regular employee. No one will automatically issue you with a “paper” stamped with the exact amount you earn each month. Instead, you have to prove your income with a combination of several different documents.

The most important is your tax return – this is the basic document that proves how much you actually earned in the past year. But for most banks and authorities, a return alone is not enough. They also need to see the so-called income and expenditure statements, which every entrepreneur submits to their health insurance company and the Czech Social Security Administration. These documents show what you have paid contributions on and thus your “legitimate” income.

Sometimes bank statements, invoices or contracts with clients are also added, especially if you have income from different sources. For some authorities, such as the Ministry of Labour and Social Affairs, you may also need a certificate of activity – proof that you are actually in business and to what extent. And if any of the above is missing, sometimes an affidavit of income can help. However, this does not apply to banks.

For a mortgage or loan, the bank will not assess you on how much you have earned “on invoices”, but on what you have left after tax – i.e. your net profit. So, if you reduce your tax base through various expenses and optimizations (which is common), this can paradoxically make you look like a low creditworthy client to the bank, even though you actually earn a lot. This is a common stumbling block – the entrepreneur makes money but “looks poor” to the bank.

For the self-employed, how to properly document income in a divorce, alimony or insolvency is also often an issue. It is not enough to just say what your turnover is, net profit, regularity of income and whether the court or the authorities can see the overall picture of your finances can be crucial. If you are concerned that the other party is misrepresenting or concealing income, we can help suggest what evidence to ask for.

In one of the typical situations we deal with in practice, a business had a high income on account but after expenses were claimed, its tax base came out significantly lower. For the bank and the court, the crucial issue was not how much money had passed through his account, but what income he could credibly prove. We therefore recommend that self-employed persons prepare their documents in advance and do not rely on one document.

What does the income certificate contain?

In order for the income certificate to carry weight, it must contain a number of mandatory details. Missing or inaccurate information can lead to a mortgage or benefit rejection.

The main elements are:

• the employee’s name, surname and social security number (or business ID number),
• the name and ID number of the employer,
• type of employment relationship (HPP, DPP, FTE),
• duration of the employment relationship,
• amount of gross and net monthly income for the last 3 or 12 months,
• average earnings data (for courts and executions),
• amount of contributions(health, social insurance),
• the signature of the responsible person and the employer’s stamp.

The certificate of employment income should also indicate whether the employment relationship is still ongoing, which is key information for mortgages. When filling in the form from the bank or office, remember that these institutions usually require the original, a copy or scanned document is not sufficient.

Income certificate or tax return?

While an income certificate is a document issued by a third party (e.g. an employer), a tax return is your own declaration of income – typically for self-employed people.

If someone is an employee, then they use an income certificate from their employer. Only file a tax return in specific cases (e.g. multiple jobs, side income).

For the self-employed , the standard is an income certificate in the form of a tax return and statements to insurance companies. It is not a certificate in the classical sense, but banks and authorities commonly accept it.

If someone is working on an agreement and has irregular income, the bank or other institution may require a certificate of activity, either on the basis of an agreement or an author’s contract.

The difference therefore lies in who issues the document, what information it contains and for whom it is intended.

Mortgage certificate – what the bank asks for

When approving a mortgage, the bank is mainly interested in whether you have a regular and sufficiently high income. Verbal assurances are not enough, the facts documented in the income certificate are decisive.

The standard requirements of the bank are a confirmation of income from the employer (usually on their own form), an employment contract (not necessarily, but sometimes banks require it), pay slips for the last 3 months, for self-employed people tax returns for the last 2 years + summaries and for agreements a certificate of activity + documented salaries.

Banks usually do not accept certificates older than 30 days and they also pay attention to whether the employment relationship is still ongoing. In case of probation or termination, the application may be automatically rejected.

Also beware of situations where the income certificate shows less income than you actually receive, for example due to irregular remuneration, agreements or business alongside employment. Before you apply, it is worth checking that you have all the supporting documents ready. For legal follow-ups, such as divorce, maintenance or insolvency, we can advise you on how to prove your income in a way that is easy for the authorities or the court to understand.

Income confirmation for the Ministry of Labour and Social Affairs, the Office of the Public Prosecutor and other institutions

The authorities (especially the MLSA and the Labour Office) require proof of monthly income to determine eligibility for benefits (e.g. benefits, housing benefit). Each benefit has slightly different rules and requires a different time period.

However, it is always the case that the certificate must be completed on the form of the relevant institution and most often refers to the last calendar quarter. Self-employed persons again have to support it with a certificate of activity or a tax return.

In these cases, a simple certificate of average earnings is not enough – the specific period and income structure are decisive.

In addition, the period and the type of income to be counted often differ for benefits. Sometimes clients incorrectly provide evidence of their current monthly income, even though the authority requires income for the previous calendar quarter. This may result in a request for completion, a delay in the application or a temporary disallowance of the benefit.

Summary

The income certificate is a key document that you cannot do without today when applying for a mortgage, welfare benefits, court proceedings or even when looking for housing. It is an official proof of your monthly income that confirms your financial creditworthiness – that is, your ability to pay your debts. If you are an employee, the income certificate is issued by your employer, usually a payroll accountant, and must include details such as type of employment, gross and net pay, contributions and length of employment. Self-employed workers (self-employed) have a more complicated situation – instead of one document, they have to provide a combination of tax returns, insurance statements, bank statements, invoices or business certificates. Banks and authorities mainly look at net profit after tax, not turnover. There are several types of certificate depending on the purpose: a certificate of earned income, a certificate of average earnings, a certificate of quarterly income, a certificate of quarterly income or a certificate of activity. It always depends on who requires the certificate – banks, authorities or courts have different forms and specific requirements.