The basic difference between gross and net wages is probably understood by most of us. But how do we calculate net pay accurately? Why can two employees with the same gross salary have different net income? And why do we sometimes talk about wages and sometimes about salaries? These questions are the focus of our article.
Gross wages (sometimes referred to as “gross wages”) refers to the remuneration for an employee’s work before taxes and other deductions. This is the amount agreed between the employer and employee during the initial interview and subsequently confirmed in the employment contract. It therefore includes the part that is paid for social security and health insurance.
The gross wage is the amount you agree with your employer and are charged for the work you do in a given month. It is the sum of the basic wage (monthly, hourly or piece rate) and any other components of pay to which you are entitled: statutory allowances, bonuses, bonuses, personal awards and wage compensation (for example, for holidays or holidays when you have not worked). Tax and insurance premiums are then calculated on this amount.
You can calculate it from your net pay, plus the advance income tax after allowances and the relevant employee contributions – social security and health insurance. In 2025, you will pay 7.1% of your gross pay in social security (including 0.6% for sickness and 6.5% for pension), with both the premium and the assessment base rounded up to the nearest whole crown. You pay 4.5% for health insurance (total health insurance is 13.5% of the assessment base, of which 9% is paid by the employer). When calculating backwards, also take into account tax credits (e.g. basic tax credit per taxpayer of CZK 2,570).
Super gross wages should be distinguished from gross wages. This is a concept that was introduced in 2008 and represented the cost per worker that an employer had to incur each month. However, in 2021, super gross wages were abolished and since then only gross wages have been used, from which income tax and social and health insurance contributions are now calculated. This means that employees now have more certainty about the amount that lands in their account each month.
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When negotiating a salary, many people wonder how to convert gross pay to net pay. Today, online calculators make it easy to convert gross pay to net pay by simply entering a few basic details. Converting gross to net pay can be affected not only by statutory discounts but also by other factors such as benefits or sickness absence.
We calculate the net pay by taking the gross pay, deducting the employee’s health and social insurance and the employee’s advance personal income tax on employment, and adding tax benefits or perhaps sick pay.
Income tax is therefore calculated directly on gross wages, not on super-gross wages. The income tax rates are 15% and 23%. The higher 23% tax rate applies to monthly income above three times the average wage. For 2025, the higher rate applies to monthly wages above CZK 139,671 (i.e. an annual tax base above CZK 1,676,052).
The social security and health insurance contributions are amounts paid each month by both you and your employer. In the case of an employee, the resulting total is 11.6%. Of this, 7.1% is social security (6.5% pension + 0.6% sick pay), which is paid to the CSSA. It is rounded up to whole crowns. Health insurance premiums are 4,5 % of the assessment base and are paid to the relevant health insurance company. In practice, however, the calculation of net pay may include other items such as sick pay or tax bonus.
We have discussed which benefits are beneficial for the employee and the employer and what the employer can deduct from the salary in our article
Calculating net pay is a process that includes deductions for health and social insurance and the addition of any benefits. To find out your exact income, you can use an online tool such as a salary calculator to help you determine how much you would take in gross pay if you know your net pay.
In addition to the gross wage, your employer also calculates other, slightly higher, contributions: employer-paid social security contributions, which are 24.8% of the assessment base, and employer-paid health insurance contributions , which are 9% of the assessment base.
Net pay can be positively affected by the addition of tax benefits (e.g. child benefit), which can also result in two employees with the same gross pay ending up with different net incomes if, for example, one of them claims the allowance for four dependent children and the other does not.
The calculation of net pay may also differ depending on whether the employee claims tax benefits or other allowances. The amount of pay is affected by the addition of sick pay or tax credits.
Conversely, various types of travel allowances are not considered part of the wage.
If you want to be sure how much you’ll be taking in, the net pay calculator can help. You can find various tools online that allow you to calculate your net pay, simply by entering your gross pay and any tax credits you may be claiming. Calculating net pay is important not only for employees but also for employers who want to offer a competitive salary.
Salary is paid to employees of the state, municipalities or contributory organisations; wages are paid to employees of private employers. However, these terms are often confused in common parlance, and it is common to see someone informing us of their “salary increase” even though they work in the private sector.
The specific salary level is determined by the employee’s classification in the salary scale, which is made up of a combination of:
The individual grades and steps are defined in more detail in the Government Regulation or its annexes.
The Labour Code stipulates that wages are paid according to the complexity, responsibility and exertion of the work, the difficulty of the working conditions, and the performance and results achieved. It also stipulates that all employees of the employer are entitled to the same remuneration for work of equal value.
Wages may be paid on completion of a task, after a certain period of time, or as a percentage of earnings. Thus, we distinguish between:
What pay settings are worthwhile and what types of pay are there? Find out in the next article.
Within a specific worker’s wage, we distinguish between:
As mentioned, a number of net pay calculators can be found on the internet. These give you an indication of your net pay, which is useful to know, for example, if you are negotiating with your employer about your salary or if you want to know how much of your salary you are losing each month. Of course, your net pay may change from month to month, e.g. due to illness etc.
If you are interested in what you are entitled to as an employee, what are the legal obligations regarding remuneration and which benefits are beneficial for employees and employers, read the related article.
The gross wage is the amount agreed between the employer and the employee, which includes health (4.5%) and social security (7.1%) contributions and the advance payment of income tax. The net wage is calculated by deducting these contributions and adding any tax benefits, such as child benefit. The income tax rates are 15% and 23%. Wages and salary are not the same thing – wages are paid in the private sector, while salaries are paid in the public sector according to pay scales. You can use online calculators to work out your net income as a guide.
For example, travel allowances paid under the Labour Code are not counted, but some cash benefits (or above the limits for non-monetary benefits) may be taxed and insured.
Employee costs include gross wages + employer contributions (24.8% social and 9% health).
If you have signed the Declaration with your employer, monthly allowances (e.g. basic ratepayer relief) and advance tax will apply, which will usually increase your net pay compared to unsigned status.
The student discount and the discount for the placement of a child (the so-called school fees) have been abolished. The spouse’s discount will now only apply if you are caring for a child under 3 in a joint household and the other spouse does not have an income of more than CZK 68,000 a year.
No. As of 1 January 2025, the lowest levels of guaranteed wages in the private sector have been abolished; only the minimum wage continues to apply. The guaranteed salary remained in the public sector (salary tables).
20 800 CZK per month (124,40 CZK/hour). It affects, for example, the minimum health insurance contribution and some entitlements.
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