Earning in retirement in 2026: what pays the most?

If you’re not sure whether working in retirement will jeopardise your pension, or if the CSSA has calculated your pension differently than you expected, we can help you with our pension legal advice service.

Earnings in early retirement

Let’s start with those who are already retired, although they don’t yet fit into this category in terms of age. People who receive an early retirement pension are the most closely monitored in terms of earnings. They must not engage in gainful activity that gives rise to insurance coverage until the date they reach retirement age. Otherwise, the Social Security Agency may stop their pension and, in addition, assess an overpayment of pension after the period of work.

It is, however, possible to engage in earnings that do not give rise to pension insurance. This may take the following form:

• a work contract with a maximum income of up to CZK 12 000 per month,
• small-scale employment with an income below the applicable income of CZK 4 500 per month,
• for sole traders (self-employed persons) , the income from this activity (after deduction of expenses) must not exceed the statutory limit, which in 2026 is CZK 9,794 for each month of self-employment.

If an early retiree were to consider resuming a conventional employment relationship with a contract of employment and earnings of, for example, CZK 25,000 gross, he or she would have to discontinue receiving a pension.

If you are unsure whether your agreement, employment contract or trade will jeopardise your early pension payment, we can advise you. As part of our pension legal advice service, we will check your situation, the decision of the Social Security Agency and whether you are at risk of overpaying your pension. We can also help you set the next course of action if the CSSA has stopped your pension or calculated it differently than you expected.

Work in ordinary retirement

However, a senior who is entitled to a regular pension (i.e. has reached the standard retirement age) does not have the above restrictions. All those who are already receiving a standard retirement pension can work as an employee or self-employed person (self-employed) without restriction. However, from 2025 onwards, the earlier increase of 0.4% of the calculation base for every 360 days worked is no longer granted for additional work while receiving an old-age pension.

This mechanism has been replaced by a social security rebate for working old-age pensioners. An employee who has reached retirement age and is in receipt of a full retirement pension can claim a 6.5% discount on the assessment base from his employer. For the self-employed, the discount is reflected in a lower social security contribution rate, namely 22.7% instead of 29.2%.

Social security contributions

However, being a retired senior employee does not mean that you are exempt from obligations such as paying social security or tax. Social security contributions are payable according to the amount of annual earnings. If the annual earnings exceed a certain amount – the so-called decisive amount – then participation in social insurance arises. This year the amount is CZK 117,521. In other words: if a pensioner earns more money than this amount in a year, he or she must pay social insurance contributions for secondary activities.

Tax return

Retirees who have more than one contract job and pay advance income tax must also file a tax return. If you work on a permanent placement and your income is up to CZK 12,000 a month, you will have tax withheld which you do not have to include in your tax return. It is possible and advisable to take into account other benefits and tax credits that the law allows in your tax return.

Work performance agreement (WPA)

A work performance agreement is flexible and allows employment for work not exceeding 300 hours per year with one employer. For pensioners, a DPP can be attractive as no health or social insurance is payable up to an income of CZK 12,000 per month, which means a higher net income. Income tax is withheld at 15%, but seniors can take advantage of the basic tax credit and other possible concessions, which can minimize or even eliminate the tax burden. DPP is therefore ideal for short-term and less regular jobs that allow flexible working hours to suit the needs of seniors.

If the earnings threshold of CZK 12,000 is exceeded in this option, social security (6.5%) and health insurance (4.5%) must be paid.

Employment contract (FTE)

Anemployment contract is suitable for longer and more regular employment that does not exceed half of the normal weekly working hours (i.e. a maximum of 20 hours per week). With an income of up to CZK 4,500 per month, no health or social insurance is paid, which is advantageous for seniors with lower incomes. At higher incomes, insurance premiums must be paid, which reduces net income, but on the other hand can ensure access to sickness benefits and other social benefits. The FTE is suitable for seniors who are looking for a more regular job with some flexibility.

If the limit of CZK 4 500 is exceeded, social security and health insurance must be paid. Therefore, the FTE becomes less advantageous compared to the DPP if you plan to earn higher amounts.

Example from our law practice

We were approached by a client in early retirement who was earning extra money on a DPP and at the same time had a small business for occasional consultations. He felt that as there was not a high income from each activity separately, there could not be a problem. However, he was asked by the CSSA to provide evidence of his earnings and was threatened with the suspension of his pension and the obligation to repay the overpayment.

We checked his agreements, tax returns, self-employment summaries and actual earnings after deducting expenses. We then prepared a statement for the CSSA and explained which income counted towards the limits and which did not. In cases like this, the biggest problem is that the client only tracks the total annual income, but overlooks a specific month or the concurrence of multiple activities.

Self-employment (self-employed)

In retirement, you can set up a business or continue your current one. As a self-employed person, you have the option to invoice for your services. The advantage is that your trade in retirement is considered a secondary trade, which brings various benefits. It applies to you that if your gross annual profit does not exceed the limit (117,521 CZK for 2026), you do not pay social security. Health insurance is compulsory, but you do not pay it at all in the first year and only on the basis of the previous year’s income from the minimum assessment base in the second year – so unlike regular self-employed workers, you do not have to pay the statutory advance payments.

You have to file your own tax returns and income and expenditure statements for health and social insurance.

Employment / part-time

A traditional employment relationship provides the greatest stability and protection for the employee. For retired seniors , this type of employment may be advantageous if they are looking for a long-term, stable work engagement. Stable employment can also have a positive effect on pension levels due to regular social security contributions. Even with part-time work, social security and health insurance is always payable, regardless of how much you earn.

Summary

Earning extra money in retirement can be beneficial in 2026, but it always depends on your particular situation. A regular pensioner has the freest regime: he or she can work on a contract, agreement or as a self-employed person without any limit on the amount of income. However, they must take into account the normal tax and levy rules.

For early retirement, the situation is much stricter. Until retirement age, only earnings that do not give rise to a pension are safe. This is where most mistakes are made, because even a seemingly small income can stop a pension if the contract is not set up correctly or the limit is exceeded.

For smaller, one-off earnings, a DPP tends to be practical. For more regular work, a FTE can be useful. If a senior wants to work for more than one client or invoice for their own services, a sole trader may be suitable, but tax returns and reports need to be taken into account. A traditional employment relationship makes sense where the goal is stability, regular income and employment protection.