Employment contract (FTE) and taxes in 2026

Quick summary

• The FTE is suitable for regular work of no more than half of the fixed weekly working hours, typically up to 20 hours per week.
• In 2026, the key threshold is CZK 4,500 per month.
• Up to CZK 4,499, no social security or health insurance is deducted from the FTE.
• From CZK 4,500 onwards, social security and health insurance is payable and the income is subject to advance tax.
• The pink declaration can only be signed with one employer in a month.

Do you need to check how you are doing with taxes or contributions ? Take advantage of our tax legal advice. We will help you to assess whether you are proceeding correctly and suggest a safe solution.

Working on a part-time basis

Working on a work agreement (FTE) is one of the two basic forms of so-called “agreement employment”. It is mainly used for longer-term but still short-term and less formal working relationships. For example, it is suitable for working a few days a week, regular shifts outside of the main employment relationship or as extra work.

Main features of working on a FTE:

• Scope of work: work on a FTE must not exceed on average half of the weekly working time, which is a maximum of 20 hours per week for a normal 40-hour working week (calculated as an average over the whole period for which the agreement is concluded, up to a maximum of 52 weeks).
• The agreementmust be in writing and contain in particular the type of work, the place of work and the agreed remuneration.
• Period of notice: The FTE may be terminated either by agreement or by giving 15 days’ notice, starting from the date of delivery of the notice.

Deductions from FTE

The amount of monthly remuneration plays a key role when you work on a work arrangement (FTE). This determines not only whether social security and health insurance contributions are payable, but also whether the income is taxed by way of withholding or advance tax. Earnings also determine whether the employee can ask the employer for an annual tax settlement or whether he or she must file his or her own tax return.

For 2026, the decisive threshold for participation in sickness and pension insurance for FTEs remains CZK 4,500 per month. If a FTE employee from one employer reaches at least CZK 4,500 per calendar month, participation in the insurance will be triggered. For multiple FTEs with different employers, the threshold is assessed separately for each employer. If an employee has multiple FTEs with the same employer, the income is added together for the purpose of assessing participation; for different employers, the limit is assessed separately.

If you have multiple agreements, combine a FTE with your main job or business, the correct set-up can be more complicated. As part of our tax legal advice, we will assess your specific situation, check your agreements and contributions and recommend a safe course of action to your employer, the tax office and the social security administration.

Income up to CZK 4 499 per month

If an employee has a monthly income of less than CZK 4,500 per month from a temporary employment contract with one employer, he/she does not participate in sickness and pension insurance. In this case:

• no social security or health insurance is paid,
• 15% income tax is payable.

Income of CZK 4 500 or more per month

Once an employee’s income from a FTE with one employer reaches or exceeds CZK 4,500, compulsory participation in sickness and pension insurance is triggered. In this case:

• social insurance is paid: 7.1% of the gross wage is paid by the employee, 24.8% by the employer;
• health insurance: 4,5 % is paid by the employee, 9 % by the employer;
• income tax is 15%.

Taxation of FTEs: how to calculate the tax on a work arrangement

The taxation of income from an employment contract (FTE ) is determined by the amount of the monthly remuneration and whether the employee has signed an Income Tax Declaration (pink paper). The key is the threshold of CZK 4,500 per month, which determines whether withholding tax or advance tax applies.

Taxation of FTEs with income up to CZK 4,500 per month

• Without a signed tax declaration: 15% withholding tax is deducted from the remuneration. The employee does not pay any further tax.
• With a signed tax declaration.

Taxation of FTEs on income over CZK 4,500 per month

As soon as the remuneration from the FTE exceeds CZK 4,500, advance tax is always applied, regardless of whether the employee has signed the declaration. In this regime, the tax is 15% and:

• if the employee has a signed declaration, he/she can claim tax credits (e.g. for the taxpayer, for children),
• if he has not signed the declaration, the 15% advance is deducted, but he can claim it back on his tax return.

Who can sign the pink declaration?

Any employee can sign the pink declaration, officially the personal income tax declaration, regardless of whether they are a student, pensioner or entrepreneur.

The declaration may only be signed for one employer in the same month. If the employee has several jobs at the same time (for example, two DPPs or one DPP and one main job), he/she must choose only one employer to sign the declaration with. Most often the one with the highest income is chosen.

If the employee signs the pink declaration with more than one employer at the same time, the tax credits will be incorrectly applied. This will result in an underpayment of tax that the employee will have to pay – and the risk of penalties from the tax office. In addition, the employer is obliged to report this and deduct the difference in tax from the employee’s wages.

Practical examples

Income up to CZK 4,500, without a signed tax declaration

Example: Lenka has a FTE with a monthly remuneration of CZK 4,000 and has not signed the pink slip.
Result: her employer withholds 15% withholding tax, i.e. CZK 600. She receives CZK 3 400 in her account. The tax is not dealt with any further.

Income up to CZK 4,500, with a signed declaration

Example: Tomas has a permanent job with a salary of CZK 4 000 and has signed a tax declaration.
Result. Tomas receives the full amount of CZK 4 000 in his account.

Income over CZK 4,500, without a signed declaration

Example.
Result: Because her remuneration exceeds CZK 4 500, social security and health insurance are payable on it, as well as advance tax. Lucie will have social insurance of CZK 426, health insurance of CZK 270 and advance tax of CZK 900 withheld. Lucie will therefore receive approximately CZK 4 404 net. If she files a tax return, she can claim a taxpayer’s rebate and get some or all of the withheld tax back.

Income over CZK 4 500, with a signed declaration

Example: David has a FTE earning CZK 10 000 per month and has signed a tax declaration.
Result. David will have social insurance of CZK 710 and health insurance of CZK 450 withheld. The advance tax payment before the rebate is CZK 1 500, but this is covered by the basic tax credit per taxpayer. David will therefore not pay tax, but he will pay insurance premiums. The net remuneration will be approximately CZK 8,840.

More FTEs with different employers

Example. She earns CZK 4,300 with employer Alfa and CZK 5,200 with employer Beta. She has signed a tax declaration only with employer Alfa.
Result. As Petra has a signed tax declaration with Alfa, the tax advance is covered by the taxpayer’s rebate and Petra receives CZK 4 300. Beth’s income is at least CZK 4 500, therefore social and health insurance is paid and the income is taxed by advance tax. The employee will receive an approximate deduction of social insurance of CZK 370, health insurance of CZK 234 and advance tax of CZK 780. The net remuneration from Beta will therefore be approximately CZK 3 816. Petra can settle the tax advance in her tax return.

Example from our law practice

Our assistance was sought by a client who had a main employment relationship and two employment agreements with different employers during the year. He had a signed taxpayer’s declaration with his main employer, but on taking up one of the LTOs he accidentally signed the pink declaration again. His employer therefore claimed taxpayer’s relief for several months in duplicate.

The client contacted us when his accountant told him that he would have to address the situation on his tax return. We first requested the employment contract, the two FTCs, payroll records and taxable income certificates from all employers. We checked where withholding tax was due, where advance tax was due and whether any of the agreements had incurred social security and health insurance liabilities.

As a result, we made recommendations on how to file the correct tax return and how to document the income to avoid further discrepancies. At the same time, the client was given a simple procedure for the following year: to keep the declaration only with the main employer, to observe the threshold of CZK 4,500 per month for agreements and to ask for a certificate of income from each employer after the end of the year.

When to file and when is it worthwhile?

For an employee working on a work arrangement (FTE), it is worth filing a tax return in certain cases , even if there is no legal obligation to do so. Typically, this is where tax has been deducted from their earnings during the year, but they have been unable or unsuccessful in claiming tax credits. By filing a return, he can then get some – and sometimes all – of this tax back.

The most common situation is that the employee does not have a signed tax return. In this case, the employer will automatically withhold 15% tax. However, if the employee includes this income in the tax return and claims the basic taxpayer’s allowance, he or she can reclaim the withheld tax. This is particularly worthwhile if the employee worked for only part of the year or had a low income and therefore did not take full advantage of the tax credit.

A similar situation arises if an employee has multiple employment agreements with different employers but has signed a tax declaration with only one of them. For the others, the tax is deducted without the possibility of claiming the discount. However, he can include this income in his tax return and claim the tax credits retrospectively, thereby obtaining a refund of part of the tax.

The student discount was abolished in 2024. So students can no longer claim it in 2026, but they can continue to use the basic ratepayer’s allowance when working under a work arrangement (FTE). So for many students, it’s still worth filing a tax return and claiming back tax on the DPT – especially if they didn’t use all their allowances during the year or had multiple employers.

FTE and annual tax settlement

The annual return is a simpler form of income tax settlement that your employer can do for you. At the end of the year, it will recalculate your actual tax liability, apply any available allowances and, if you have paid more tax than you should have during the year, give you a refund – usually in the form of an increased payment.

Your employer can give you an annual tax settlement if you meet the following conditions:

• You have a signed tax declaration (called a pink slip).
• You did not have another employer at the same time during the year from whom advance tax was withheld (income up to CZK 4,500 withholding tax does not matter).
• You had no other income that you should have declared yourself – for example, from business, renting or abroad.
• You will ask your employer for an annual statement in writing by 15 February of the following year and provide the necessary supporting documents.

Summary

An employment agreement is a practical tool for earning regular income, but for taxes and levies you need to keep an eye on the monthly remuneration in particular. The key is the threshold of CZK 4,500. If the income from a temporary employment contract with one employer does not reach this amount, no social security or health insurance is payable. Tax is dealt with according to whether the employee has signed a taxpayer’s declaration.

Income of CZK 4,500 or more already triggers participation in sickness and pension insurance. Social security and health insurance are paid on the remuneration and the income is subject to advance tax. With the signed declaration, the taxpayer’s discount is applied, without it the discounts are only applied in the tax return.

Be especially careful with multiple agreements at the same time. You can only have a pink declaration signed with one employer in any one month. If you work for more than one employer, it may be worth filing a tax return even if you don’t normally file one otherwise.

As well as levies and taxes, employers should keep an eye on the written form of the agreement, the scope of the work, time records, holiday entitlement and correct reporting to the authorities. Mistakes in agreements often only become apparent during an inspection, when it is more difficult to correct them.