As a self-employed person, you are in many ways worse off than employees. This may or may not apply to maternity pay. In some cases, self-employed workers do not get this at all or get a much lower amount. The conditions for parental allowance are then essentially the same as for employees. In this article, we will look at both types of benefits in more detail and tell you what rules apply to you if you decide to continue your business during maternity or parental leave.
Maternity and parentalbenefits are used to support families with young children. However, they differ in many respects, including in relation to self-employed persons:
You can read more about state social assistance benefits and when you are entitled to them in our next article.
Maternity leave is significantly different for self-employed and employed workers. The first condition is the need to be insured with sickness insurance or to be in the so-called protection period (180 days after the termination of insurance). Sickness insurance is paid for by the employee’s employer, but self-employed workers must pay it themselves voluntarily.
Self-employed workers must have paid sickness insurance for at least 180 days in total in the year before they take maternity leave and must also meet the minimum duration of sickness insurance, which is set at 270 days in the two years preceding maternity leave. For the latter period, it does not matter whether the sickness insurance was paid voluntarily while self-employed or by the employer while the self-employed person was employed.
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If a self-employed person does not meet the conditions for entitlement to maternity pay but pays her sickness insurance, she may still be entitled to sickness benefits. These are payable six weeks before the due date and six weeks after the birth. However, to get sick pay, you must have signed up for voluntary sickness insurance at least three months before the due date (when you are temporarily unable to work).
As a self-employed person, you must sign up for sickness insurance because it is voluntary. You must register with the district social security office under which you fall. The application can also be sent by post, e-mail, data box or processed online via the ePortal of the Social Security Agency. Your sickness insurance will start at the earliest on the day you submit your application.
Advances are calculated according to the assessment base you choose. The premium rate is currently 2.7% of the assessment base. The minimum assessment base is set at CZK 9 000 and the minimum payment for voluntary sickness insurance is CZK 243 per month.
The amount of maternity pay is determined from the daily assessment base. Specifically, it is 70% of the daily assessment base, which is further reduced by three thresholds:
For self-employed persons, the assessment base is determined on the basis of how much they have paid in sickness insurance. The more you have paid in sickness insurance, the more maternity pay you will receive.
To calculate maternity allowance, use the maternity allowance calculator, which can be found on the MLSA website.
As a self-employed person, you are entitled to parental allowance in the same way as an employee. However, what you won’t get, unlike an employee, is parental leave. However, your main gainful activity will automatically be converted into a secondary activity , which will reduce your compulsory insurance contributions significantly.
You become entitled to parental allowance after your maternity leave ends or, if you have not been receiving maternity leave, you can start receiving parental allowance immediately after the birth of your child. At the same time, you must meet the requirement of full-time care for the youngest child in the family (up to the age of 4).
What are the conditions for parental allowance this year and what changes are planned for the future? This is the focus of our article.
The parental allowance is set at a uniform amount of CZK 350,000 (CZK 525,000 in the case of multiple children). The parent is then able to schedule the payment of this allowance as he or she sees fit. He or she may receive a higher monthly allowance, but the total amount may be exhausted after two years, for example, or he or she may spread the allowance over a longer period of time, but no longer than until the child reaches the age of 4.
The maximum monthly amount of the parental allowance is based on the daily assessment base determined when calculating the maternity allowance. In general, the maximum amount that can be drawn is 70 % of 30 times the daily assessment base. If you have not received maternity allowance, the monthly amount of parental allowance is capped at CZK 13 000 per month. You can change the amount of the monthly parental allowance once every three months.
If you start receiving maternity allowance as a self-employed person, you must stop running your own business. However, it is possible for your employees to run the business for you. If you started your maternity leave as an employee, then you can start an active business during your maternity leave and nothing prevents you from doing so. The only restriction is if you decide to start a business in the same field as your employee. In this case, you will need your employer’s permission.
Once you move from maternity to parental leave and start receiving parental allowance, you can start your business again. The only change is that your business will switch from your main activity to a secondary activity. This is an advantageous change for you because it will significantly reduce the compulsory contributions to health and social security. The same applies to you if you are just starting out in business when you are a parent.
In this case, the health insurance contributions are calculated on your real income and nothing like the mandatory minimum contributions applies to you. You do not have to pay social security at all, but only if your annual profit does not exceed CZK 111,736. If you exceed this threshold, you will be obliged to pay a minimum advance of CZK 1,496 per month.
You can also find out about your options for earning extra money while on maternity leave.
Self-employed workers can receive both maternity and parental benefits, but the conditions differ. Maternity allowance is a sickness insurance benefit to which self-employed workers are entitled only if they voluntarily register for insurance. You need to have been insured for at least 180 days in the last year and 270 days in the two years prior to taking maternity leave. The amount of the benefit is based on the daily assessment base and is 70% of its reduced value. The benefit is normally paid for 28 weeks.
Parental allowance is a state benefit available to all parents regardless of insurance status. The total amount is CZK 350 000 (CZK 525 000 for multiples) and can be drawn up to the age of 4. The amount of the monthly allowance depends on the daily assessment base or is set at a maximum of CZK 13 000 if no maternity allowance has been received.
While on maternity leave, self-employed workers must not be actively engaged in business. After the start of parental allowance, the main activity changes to a secondary activity, which significantly reduces or completely eliminates the obligation to pay insurance contributions.
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