Payout: everything to know about it

What is the due date for wages

Employers sometimes try to delay paydays as far as possible, or they may want to arrange a longer interval between paydays with employees. However, this practice runs up against the law. The Labour Code provides that wages or salary are payable after the performance of work, no later than in the calendar month following the month in which the employee became entitled to the wages or any component thereof. The regular pay period must be determined within that period. Thus, for work performed in July, wages must be paid no later than the end of August.

This is an important distinction. The due date for payment of wages is the legal limit. The pay date is a specific day that the employer chooses within that period, typically perhaps the 10th or 15th of the following month. It is usually the pay date, not the due date itself, that is stated in employment contracts, pay slips or internal regulations.

A practical example: Mr Ales’ employer wanted to include in his employment contract that he would be paid every two months. However, this is not possible. The payment scheme must not circumvent the legal rule that wages for work performed must be paid no later than in the following calendar month.

What if the employer does not pay on time

Late payment of wages is not just an inconvenience. The Labour Code attaches very significant consequences to it. If the employer fails to pay the wages, salary, wage compensation or part thereof even within 15 days after the due date, the employee may immediately terminate the employment relationship. At the same time, he/she is entitled to compensation of wages or salary in the amount of average earnings for a period corresponding to the length of the notice period.

This is a common mistake: the 15 days do not start from the pay period, but only from the statutory due date. Therefore, if the wages for July were due by 31 August, the employee can terminate the employment relationship immediately if he or she is not paid by 15 September inclusive.

This applies even if the employer does not send the money until the 16th day after the due date. The mere fact that an additional payment is made does not automatically remove the employee’s right to terminate the employment relationship immediately if the legal conditions have already been met. This conclusion has long been consistent with the logic of the Labour Code.

It is fair to add, however, that if there is only a manifest error or mistake in the calculation or payment, the assessment may be more complex. In practice, therefore, it is always a good idea to check whether there has indeed been a failure to pay wages within the meaning of the law or simply a technical error which the employer is promptly correcting.

In addition, the employee may also claim interest for late payment, since the employer is in default from the first day after the due date.

Is the employer at risk of a fine?

Yes. Failure to pay wages or part of them may be an offence under the Labour Inspection Act. Certain wage offences are punishable by a fine of up to CZK 2,000,000. This applies, for example, to breaches of remuneration obligations. On the other hand, the rates for compensation offences are lower. Therefore, it is necessary to distinguish what the specific infringement is.

In other words, an employer who fails to pay wages on time or correctly risks not only a lawsuit against the employee, but also an inspection and sanction from the Labour Inspectorate.

Payment of wages on account or in cash?

There has been an important change here. Previously, it was assumed that wages were paid during working hours and at the workplace, unless otherwise agreed. However, following the flexinove of the Labour Code, it is now standard practice for the employer to pay wages or salary, after any deductions, into a payment account designated by the employee. An employee whose wages are paid in Czech crowns may designate an account maintained in Czech crowns with a bank or credit union with its registered office or branch in the Czech Republic.

Cash comes into play when the employee does not agree in writing to the payment into the account, does not provide the necessary cooperation or does not have an account at all. Then wages are paid in cash during working hours and at the workplace, unless the parties agree otherwise. If the employee is unable to attend for payment for serious reasons, the employer must send the wages to the employee at his/her own expense and risk.

In practice, this means two things. Firstly, payment on account is now a common and directly preferred method under the law. Second: the employer cannot force the employee to set up an account if he does not want or have one. They must then use a legal alternative.

Pay slip: what it is and what you will find on it

The Labour Code does not work with the popular term “pay slip”, but it imposes an obligation on the employer to issue a written document containing information on the individual components of the wage or salary and the deductions made, at the time of the monthly settlement of the wage or salary. In addition, at the employee’s request, the employer must produce the documents on which the wages were calculated.

In practice, such a document will usually contain, in particular:

• identification of the employee and the employer,
• the period for which the wages are calculated,
• the gross salary,
• the individual components of the wage, such as basic pay, bonuses, awards or allowances,
• wage replacements,
• deductions,
• health and social security contributions,
• advance tax,
• the resulting amount to be paid.

Some companies also include other information on the pay slip, such as the balance of leave or the exact hours worked. This is common and useful in practice, but the law specifically requires mainly information on wage components and deductions.

What about pay during leave?

The Labour Code also deals with the situation where an employee takes leave at the time when he or she would normally be paid. If the payday falls during the holiday period, the employer must pay the employee the wages due during the holiday before the holiday starts, unless they agree on a different payday. Where the payroll technique does not permit this, the employer must pay at least a reasonable advance and make up the balance on the next regular pay date after the holiday.

This is useful, for example, when an employee goes on an extended vacation and does not want to wait until he or she returns. On the other hand, in many companies it is a common agreement that the salary is paid into the account during the holiday, so the employee does not have to make any special arrangements.

What applies at termination of employment

On termination of employment, the employee has the right to request that the employer pay him or her the monthly salary already earned on the day of termination. If the payroll technique does not allow it, the wages must be paid no later than the next regular pay period after the termination of employment.

This is particularly useful in cases where the employment relationship ends abruptly and the employee needs to have their money sorted out as soon as possible.

Summary

Wages must be paid after the work has been performed, no later than the calendar month following the month in which the wages were earned. This is when the wages are due. The pay date is a specific day within that period. If the employer fails to pay the wages even within 15 days after the due date, the employee may immediately terminate the employment relationship and claim compensation for the period of notice. In 2026, wages are normally paid into an account designated by the employee, while cash is an alternative option. The employer must also provide the employee with written proof of the individual wage components and deductions, and special rules apply to payments during vacation and upon termination of employment.