You start a business, it’s doing well, you file your tax return – and suddenly the tax office adds another regular obligation: advance payments of income tax. For many people, this is an unpleasant surprise, because in practice it’s not a one-off payment after the end of the year, but a continuous sending of money throughout the year.
A self-employed income tax advance is simply a payment of tax in advance. This ensures that the tax is not paid in one lump sum after the end of the year, but is paid (for higher tax liabilities) on an ongoing basis.
The law builds on the concept of an advance period. This is the period that runs from the day after the last day of the filing period for the previous period until the last day of the filing period for the following period. In other words, once the deadline for filing the return has passed, the advance period for the next period starts.
At the same time, an important point applies: advances are not extra. The return for the whole year then just compares how much you should have paid according to the actual result, and how much you sent in advances. According to this, an additional payment or an overpayment will arise. For late advances, only those paid by the due date for filing the return will count towards the actual tax.
If you’re in the flat-rate scheme(flat-rate tax), you don’t pay regular income tax advances according to the rules for regular tax returns, because you pay the tax (and related payments) monthly in a flat-rate amount according to the flat-rate scheme.
Here comes a key concept – the last known tax liability. In layman’s terms: it’s the amount of tax you already know from your last (typically last filed) tax return, and it’s what determines whether you’ll pay any advance payments and how much.
The rule is that if your last known tax liability was less than £30,000, you don’t have to pay the advance. If it is over CZK 30,000 and also not more than CZK 150,000, you pay the advances semi-annually. If it is over CZK 150 000, you pay advances quarterly.
However, if you have a job alongside your business, you may not have to pay income tax advances, or you may pay only half of them – depending on the proportion of the partial tax base from employment (from which the employer withholds tax advances) of the total tax base. If it is 50% or more, no advance payments are made; if it is between 15% and 50%, half is paid.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
The basis is still the same – it is based on the last known tax liability:
Imagine that your last tax return showed a tax liability of CZK 80,000. You fall into the band of CZK 30 000 to CZK 150 000, so you pay half-yearly advances of 40% of this amount.
40% of CZK 80 000 = CZK 32 000.
So you pay two advances of CZK 32 000 each during the tax year. The deadlines are regulated by law: the first by the 15th day of the sixth month and the second by the 15th day of the twelfth month.
If your last known tax liability is CZK 240,000, you fall above CZK 150,000. You pay quarterly advances of one quarter.
1/4 of CZK 240 000 = CZK 60 000.
So you pay four advances of CZK 60 000 each – by the 15th day of the third, sixth, ninth and twelfth month.
It is important to remember that the resulting amount is rounded up to the nearest hundredth of a cent.
The law sets the due dates on the 15th day of the respective month (3rd/6th/9th/12th month or 6th/12th month).
But life brings weekends and holidays. And here’s a practically important rule of the tax code: if the last day of the deadline falls on a Saturday, Sunday or holiday, it is moved to the next working day. This rule will then come in handy not only for advances, but for all tax deadlines in general.
Sometimes a mistake can happen and a tax return needs to be amended by filing a supplemental return. But how does this affect advance payments? The law works on the basis that the last known tax liability may be the amount of the additional return. The change typically takes effect from the day after the filing deadline, or (if you file late) the day after the filing date.
At the same time, deposits that were already due are not retroactively changed – the change will not take effect until the next period.
If you send a payment late for advance payments of income tax to a self-employed person, you incur a tax arrears on your personal tax account. In the eyes of the tax authorities, the advance payment is treated like a normal tax liability – except that you pay it during the year. And once an arrear is incurred, interest can automatically be added to it.
The first piece of good news is that interest doesn’t start accruing on the first day it’s due. The tax code assumes that interest on late payments does not accrue for the first three days of delinquency and only starts to accrue from the fourth day after the due date. In practice, this means that if you are only a few days late, no interest will accrue. However, once you get over that threshold, interest starts to accrue for each day thereafter until you pay.
The basis for calculating interest is typically the unpaid portion of the advance. Interest is calculated on a daily basis and may be charged by the Revenue in aggregate over a period of time.
The amount of interest on arrears is based on the CNB’s repo rate plus a fixed mark-up. The rule of thumb for default interest is that the annual interest rate is the repo rate applicable on the first day of the relevant calendar half-year plus 8 percentage points. Simply put: when the CBR changes the repo rate over time, your cost of default changes – and therefore the interest may look different in the first and second half of the same year.
Practice has another brake that can help you with small slips: interest is not prescribed and no obligation to pay it arises if it does not exceed CZK 1,000 in total for one type of tax with one tax authority for a given period. In layman’s terms: although interest is theoretically calculated, the tax office does not charge it at all for small amounts.
If you do not resolve the arrears after a long period of time, the tax authority may proceed to recovery. The tax authority can use the statement of arrears as an enforcement order and choose the method of recovery in such a way that the costs are not clearly disproportionate to the amount of the arrears. In practice, this may mean a tax execution (e.g. deductions from the account) and the costs of recovery may be added to this.
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If you suspect in advance that you won’t be able to pay your advances on time (typically due to a shortfall in income, seasonality or a large one-off invoice overdue), it often makes more sense to respond proactively and ask for a grace period (deferment) or installment payments. The Inland Revenue specifically states that you can apply for a deferral or instalment payment in cases of, for example, social or economic hardship.
But there is a catch: when the tax authority grants you a delay, interest on the delayed amount (i.e. interest for paying late with the tax authority’s consent) is usually applied instead of interest on the delayed amount.
This is where people most often get confused. The concept of minimum advance payments for self-employed people does not include an advance payment for income tax, but for social security and health insurance.
For income tax, the law works with the last known tax liability and the thresholds of £30,000 / £150,000 – so it’ s not a minimum advance of a fixed amount for everyone, but a scheme based on the last tax you had.
In contrast, for insurance premiums, minimum amounts exist and are set as follows for 2026:
So, if you are looking for the minimum advance payments for self-employment, always clarify first whether you are dealing with income tax or insurance premiums. These are two different obligations, two different rules and often different due dates.
The new government plans to reduce the advances again and return the overpayments for this year. The future will therefore show how high the real advances for this year will be.
A special chapter is the flat-rate scheme. There, the self-employed person does not pay traditional income tax advances according to the last known tax liability, but sends a lump sum advance in a fixed amount according to the band. In 2026, for example, in Band I, the total lump sum payment is CZK 9,984, of which income tax is CZK 100 and the rest is insurance premiums.
Advances of income tax for self-employed persons are interim tax payments and are governed by the so-called last known tax liability from the last tax return. If it does not exceed CZK 30,000, no advance payments are made; between CZK 30,000-150,000, they are paid semi-annually (40% of the tax twice a year), above CZK 150,000 quarterly (always 1/4 of the tax). The due date is always the 15th of the relevant month.
When you file a supplementary return, it may change the last known tax liability for future advances, but advances already due are not backdated. Late payment will result in an underpayment and may incur interest. If you know you won’t pay on time, it makes sense to deal with postponements or installment payments.
You’ll see it as your last annual tax liability (typically the amount of tax calculated on your return after deductions and credits have been applied, but before taking into account how much has already been paid in advance).
For individuals, advances are derived from the so-called last known tax liability, but for this purpose other income is excluded under section 10.Advances are therefore typically based mainly on business, rent and other “ordinary” declared income, not on one-off other income.
Yes, you can send interim payments to your stock. Just make sure that the payments are correctly identified (account/prefix, variable symbol), otherwise they may be incorrectly assigned.
In the first year, you do not pay any advance payments, because the advance payment is set only according to the last known result from the return. In practice, however, keep an eye on your cash flow: the top-up after the first return can be significant and many self-employed people put money aside on an ongoing basis.
Not sure how to do your taxes correctly so you don’t get it wrong? We can help you navigate the law, whether it’s dealing with a specific tax situation, preparing for an audit by the tax authority or defending yourself in court.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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