Flat-Rate Tax Brackets: How Much Will Self-Employed Individuals Pay in Flat-Rate Tax in 2026?

Quick Overview

The flat-rate tax in 2026 consists of a single monthly payment that covers income tax, social security, and health insurance. Self-employed individuals in Bracket I pay 9,984 CZK per month, in Bracket II 16,745 CZK, and in Bracket III 27,139 CZK. Only non-VAT payers with income of up to 2 million CZK who meet additional legal requirements may enroll in the flat-rate regime. You must notify the tax office of your enrollment or a change in tax bracket for 2026 by January 12, 2026.

Not sure if the flat-rate tax regime will actually save you money in 2026? Have a lawyer assess your situation. At Dostupný advokát, we’ll help you determine whether you meet the conditions for the flat-rate tax, which bracket to choose, and whether filing a traditional tax return might be more advantageous for you.

Conditions for the Flat-Rate Tax for Self-Employed Individuals

The purpose of the flat-rate regime is to combine three payments into one —income tax, health insurance, and social security —which significantly reduces administrative burdens.

A taxpayer subject to personal income tax who is a self-employed individual may opt into the flat-rate regime provided they are not a VAT payer (with the exception of a VAT-registered person), are not a partner in a general partnership or a general partner in a limited partnership, are not in insolvency, is not currently receiving a traditional salary from employment (with the exception of income subject to withholding tax), and did not exceed the threshold income for the selected bracket in the tax period immediately preceding enrollment. The notice of enrollment is typically filed by January 10 of the given year (or by the date of commencement of business for newly established self-employed individuals). However, for the year 2026, the deadline is January 12, 2026, because January 10 falls on a Saturday.

What Is “Decisive Income” and Why Does the Type of Activity Matter for the Income Brackets?

Starting in 2023, the flat-rate regime will have three brackets based on income level and the nature of the activity. The key point is that when determining which bracket you fall into, the law does not consider the actual expenses you claim, but rather what percentage of your income could be claimed as expenses if you were not using the flat-rate regime. In other words, whether your activity would be subject to flat-rate expense deductions of 80%, 60%, 40%, or 30%. For the brackets, we then apply a test to determine whether at least 75% of your income falls under activities with an 80% or 60% flat-rate deduction.

QUOTE: A flat-rate expense deduction is a method used outside the flat-rate regime (under “traditional” taxation) to determine tax-deductible expenses as a percentage of income earned, rather than by documenting actual costs.

To be sure, let’s summarize which activities might be subject to which flat-rate expense deductions (if you were operating outside the flat-rate regime):

• 80% for agricultural production, forestry, and water management, as well as for craft trades.
• 60% for other business activities (other unregulated, regulated, and licensed trades that do not fall under the 80% expense category).
• 40% for other income from self-employment (e.g., liberal professions such as attorneys).
• 30% for the rental of property classified as business assets.

Three flat-rate tax brackets for self-employed individuals

Bracket I: the basic bracket with the lowest monthly payment

You can enter Band I in three situations:

1. if income in the previous year did not exceed 1 million CZK, regardless of the type of activity;
2. if at least 75% of income up to 1.5 mil. Kč came from activities eligible for an 80% or 60% flat-rate expense deduction;
3. if at least 75% of income up to 2 mil. Kč came from activities eligible for an 80% flat-rate expense deduction (typically skilled trades or agriculture).

Band II: for moderate income and mixed activities

Band II includes self-employed individuals whose income did not exceed 1.5 mil. Kč regardless of the type of activity, or whose income was up to 2 mil. Kč, provided that at least 75% consisted of activities eligible for an 80% or 60% flat-rate expense deduction.

Band III: Highest flat-rate payment, but broadest income coverage

Band III is open to anyone whose income did not exceed 2 mil. Kč, regardless of the type of activity. It is a safe haven for those who want to take advantage of the flat-rate regime even with higher income and do not want to keep track of whether 75% of their revenue comes from the more favorable 60% or 80% categories.

Flat-Rate Tax Amounts for 2026

The following monthly advance payments apply for 2026 (which include income tax, social security, and health insurance):

• Bracket I: 9,984 CZK, of which 100 CZK is income tax, 6,578 CZK is social security, and 3,306 CZK is health insurance.
• Bracket II: 16,745 Kč, of which 4,963 Kč is tax, 8,191 Kč is social security, and 3,591 Kč is health insurance.
• Bracket III: 27,139 Kč, of which 9,320 Kč is income tax, 12,527 Kč is social security, and 5,292 Kč is health insurance.

Advance payments are due by the 20th day of each month. If you enroll in the system when you start your business, the first advance payment is due by the 20th day of the following month, together with the advance payment for that month.

Self-Employed Individuals and the Flat-Rate Tax in Practice: How to Choose the Right Bracket

The first question to ask yourself: How much did you earn last year, and what were the sources of that income?

If you engage exclusively in skilled trades (80% flat-rate) and earned, for example , 1.9 mil. Kč, you can still be in Bracket I because you meet the condition that at least 75% of your income comes from activities subject to the 80% flat rate and you did not exceed 2 mil. Kč.

Conversely, if you are a doctor, lawyer, or tax advisor (typically a 40% flat rate) with income of 1.2 mil. Kč, you can no longer choose Bracket I because you have exceeded the CZK 1 million threshold and your activity does not fall into the groups with 60% or 80% expense rates. The solution is Bracket II (or Bracket III).

In practice, we often see that self-employed individuals focus only on the amount of their monthly payment but fail to consider which tax credits and deductions they will forfeit under the flat-rate regime. A common mistake occurs among entrepreneurs with children, a mortgage, or a combination of multiple business activities. At first glance, the flat-rate regime seems simpler to them, but after recalculating, the standard regime may be significantly more advantageous.

Second question: If you meet the conditions for a lower tax bracket, do you have to choose it?

No, you don’t have to. The bracket is optional, and you can even choose a higher bracket if it suits you better for some reason (e.g., you expect your income to grow and want to have a buffer). Switching between brackets is only possible by January 10 of the given tax year via a “Notice of Change in Selected Bracket”; it cannot be done during the year (for 2026, this means by January 12, 2026).

Exceeding the Flat-Rate Tax Bracket

A common concern: What if I earn more than expected during the year and exceed the limit for my chosen bracket? You do not change your bracket during the year. However, at the end of the year, you will assess your actual income. If your income exceeded the limit for your chosen bracket but did not exceed the limit for a higher bracket, you can file a “Notice of a Different Flat-Rate Tax Amount” and pay the flat-rate tax corresponding to the higher bracket for the entire period you were in the flat-rate tax regime.

Conversely, if your income exceeds the limit for the highest bracket or violates another condition of the flat-rate regime, you essentially cease to be a taxpayer under the flat-rate regime and are transferred to the standard regime, with the obligation to file a tax return.

Real-life example:

Imagine a freelancer who chooses Bracket I for 2026 because they earned 950,000 CZK the previous year. However, during the year, they acquire new clients, and their income rises significantly above the threshold they had originally anticipated. Legally, this does not mean they must change their tax bracket immediately during the year. At the end of the year, however, they must evaluate their income and, if necessary, report a different flat-rate tax amount. Furthermore, if they exceed the threshold for the flat-rate regime itself, they will have to revert to the standard tax regime, file a tax return, and submit the required statements.

Flat-Rate Tax for Self-Employed Individuals and VAT

VAT payers cannot opt into the flat-rate scheme. However, you can be a VAT-registered person, which is a special category where you are not a VAT payer but have certain obligations related to cross-border transactions. This distinction is crucial for self-employed individuals with business ties abroad.

Suspension, Resumption, and Final Calculation

If you suspend your business activities and resume them in the same year, you will automatically return to the same regime and bracket to avoid unnecessary shifts out of the regime. At the end of the year, it is always determined whether you remain in your chosen bracket or whether you need to file a notification of a different flat-rate amount (if you have exceeded the limit and moved to a higher bracket).

When the Flat-Rate Tax Is Worth It and When It Isn’t

The flat-rate tax regime isn’t the ideal solution for everyone. It’s most beneficial when simplicity is a priority and when the difference compared to traditional taxation (or expense-based flat-rate deductions) isn’t tied to significant tax credits and deductions. Below you’ll find quick indicators and sample scenarios.

When the flat-rate tax is worth it

Low Actual Expenses

If your work doesn’t involve significant expenses (materials, purchasing goods, costly transportation), the difference between the traditional tax system and the flat-rate tax will likely be small, and it’s worth it because of its simplicity.

You don’t want to deal with paperwork

Under the flat-rate system, you pay a single fixed amount each month (tax + social security + health insurance). This eliminates the need to calculate advance payments on an ongoing basis, track your profits, and make adjustments for fluctuations throughout the year. At the end of the year, you simply check whether you’ve exceeded the limit of your chosen bracket and, if necessary, report a different flat-rate amount (an additional payment for a higher bracket).

You do not claim significant tax credits or deductions

Under the flat-rate system, you cannot claim tax credits or deductions such as the spousal deduction, the higher tax credit for children, mortgage interest deductions, charitable donations, or pension or life insurance contributions. If you’re not eligible for these, then you have nothing to lose, and the flat-rate system often pays off.

You need certainty regarding advance payments throughout the year (cash flow)

A fixed monthly amount stabilizes your budget, even during peak seasons or busy periods. This way, you won’t face any unwanted surprises in the form of higher advance payments in the middle of the year.

When the flat-rate tax isn’t worth it

Low income (especially from a side job)

The flat-rate advance payment is fixed. For small revenues (typically self-employed individuals with a side job while employed or on parental leave), the standard method is usually cheaper because insurance premiums under the standard method are based on actual income (which is low for side jobs), whereas with the flat-rate method, you’d pay the full amount every month.

High actual costs / low margin

E-commerce, reselling, logistics, paid advertising, subcontracting… Under the standard method, you can claim actual costs or a flat-rate expense deduction of 30–80% (outside the flat-rate tax regime). With the flat-rate method, you don’t claim any costs at all—so the fixed payment can be very disadvantageous.

You need to claim deductions and credits

Do you have children, a mortgage, gifts, a pension plan, or life insurance? Under the standard tax regime, these items often reduce your tax liability by tens of thousands per year. Under the flat-rate regime, you’ll lose these benefits. If the tax credit for children alone under the standard regime saves you more than the annual tax portion of the flat-rate payment, then the standard regime is clearly the better option.

Expected VAT Registration

A VAT payer cannot use the flat-rate regime. If you’re approaching the turnover threshold for VAT registration, it makes sense to stay out of the flat-rate regime. (Being a registered VAT payer is not an issue.)

Fluctuating Income Close to the Thresholds

If your income frequently fluctuates near the thresholds (e.g., CZK 1.45–1.55 million or CZK 1.9–2.0 million), expect the likelihood that you’ll end up paying the higher bracket after a year. This isn’t a legal issue, but it’s something to take into account. So consider opting for the higher bracket right away or stay in the standard regime.

Sample Scenarios

• IT specialist, income up to 1 million CZK, minimum deductions: Theflat-rate regime makes sense. You’ll benefit from simplicity, fixed contributions, and a low tax component.
• Consultant/attorney (40% category), income ~1.2 million CZK, two children, and a mortgage: Thestandard regime is generally more advantageous due to tax credits, benefits, and deductions. Under the flat-rate regime, you would forfeit most of these benefits.
• Part-time self-employed individual, income ~CZK 250,000–400,000, low expenses: The standard regime will be cheaper (advance payments for social security and health insurance are significantly lower for part-time work); the flat-rate amount would be relatively high.
• Freelancer without children or deductions, income ~1.3 mil. Kč, low expenses: The flat-rate option (Band I/II depending on the nature of activities) often pays off in exchange for simplicity.

How to Quickly Compare the Options

• Take your expected annual income for 2026 and the breakdown of your activities (80/60/40/30%).
• Add in any tax credits and deductions you would claim under the standard tax system.
• Compare this with the annual total of flat-rate advance payments in the selected bracket (12× the monthly amount for 2026 listed above).
• If the difference in favor of the traditional method is in the tens of thousands, stay with the traditional method. If it’s about the same ± a few thousand and the paperwork is a burden, switch to the flat-rate system.

Don’t want to make a decision based solely on an estimate? Send us basic information about your income, type of business activity, and tax credits and deductions. We’ll help you compare the flat-rate system with the standard tax system and alert you to any risks that might come as an unpleasant surprise at the end of the year.

What to Consider Before Choosing a Tax Bracket: Three Questions to Ask Yourself

1. What was my income, and from what activities? If at least 75% of your income comes from activities with a 60% or 80% flat-rate expense deduction, you have a better chance of qualifying for Bracket I up to 1.5 million CZK, or up to 2 million CZK if 80% of your activities fall into this category.
2. What deductions and tax benefits would I claim under the standard tax regime? If they’re significant, recalculate to see if the flat-rate advance payment ends up costing you more.
3. Do I expect revenue growth in 2026? If so, consider choosing a higher bracket now to avoid finding yourself in a situation a year from now where you’ll have to pay a different flat-rate amount. It’s not possible to switch brackets during the year.

Summary

The flat-rate tax for self-employed individuals combines income tax, health insurance, and social security into a single monthly payment and is available to non-VAT payers (you may be a registered taxpayer) who are not in insolvency and are not partners in a v.o.s. or general partners in a k.s., and who meet the income limits. Starting in 2023, it will have three brackets based on annual income and the nature of the business activity (80/60/40/30%).

For 2026, the monthly advance payments are as follows: Band I CZK 9,984, Band II CZK 16,745, Band III CZK 27,139; payments are due by the 20th day of each month. You can only notify the authorities of your entry into or change of a bracket by January 12, 2026 (for new self-employed individuals, upon commencement of business).

You choose your bracket yourself. The bracket does not change during the year; at the end of the year, you assess your actual revenue: if you have exceeded the limit, you will pay the higher flat rate retroactively (provided you do not also exceed the ceiling for Bracket III or other conditions of the scheme). If you suspend your business activities and resume them in the same year, you automatically return to your original regime/bracket.

This regime is usually worthwhile if you have low actual costs and do not claim high tax credits or deductions; it is less suitable for low income (side business), high costs, or high tax credits.