How to Reduce Advance Payments for Self-Employed Individuals

Quick Overview

Social security and health insurance advance payments for self-employed individuals are primarily calculated based on the previous year’s income. However, if your income drops significantly during the year, you don’t automatically have to wait for the next statement. You can ask the Czech Social Security Administration (ČSSZ) and your health insurance provider to reduce your advance payments. The authorities will require you to provide proof of your current income and expenses, typically for the last three months. However, the reduction cannot fall below the statutory minimum. In 2026, the minimum health insurance advance payment is 3,306 Kč per month; for social insurance, you’ll need to keep track of the current adjustments following changes effective as of July 2026.

Not sure if you qualify for a reduction in advance payments, or if you already have an overpayment or underpayment? Have a lawyer assess your situation. We’ll help you review your documentation, communicate with the authorities, and address any related tax implications.

What Self-Employed Individuals Must Pay—Taxes and Flat-Rate Fees

As a self-employed individual, you must pay taxes on your profits and file a tax return every year. However, you do not pay tax on the entire amount you receive in your account, but only on the difference between your income and expenses. The income tax rate is 15%.

When it comes to expenses, you have the option to either keep all receipts and invoices and claim actual costs, or you can take advantage of a flat-rate expense deduction, which simplifies the entire tax process. Different rates can be used for the calculation depending on the type of activity:

• 80% of income applies to skilled trades, agriculture, and forestry;
• 60% of income applies to other types of trades, such as unregulated, regulated, and licensed trades;
• 40% of income can be claimed for activities for which you do not have a trade license, such as income from copyrights or from activities governed by special legal regulations.

Self-Employed Individuals – Social and Health Insurance

As a self-employed person, you must also pay advance payments for health and social insurance. For 2026, the minimum advance payment for health insurance for self-employed persons is set at 3,306 CZK per month. The situation regarding social insurance in 2026 is more complicated due to changes in the minimum advance payments during the year. The Czech Social Security Administration (ČSSZ) specifies a minimum advance payment of 5,720 Kč for primary employment and 1,574 Kč for secondary employment in 2026. However, the rules will change as of July 1, 2026, and self-employed individuals who paid higher minimum advance payments in the first half of the year may have to address an overpayment. Therefore, it is advisable to verify the current amount of advance payments directly with the ČSSZ or via the ePortal before submitting an application.

For self-employed individuals engaged in a secondary activity, the minimum social security advance payment in 2026 will increase to 1,574 Kč; in this case, health insurance is not payable. Health insurance for a secondary activity is not paid in the form of minimum monthly advance payments; the premium is paid later based on the actual profit reported in the statement submitted to the health insurance company. Newly self-employed individuals who are engaged in a primary business activity and have not been self-employed in the previous 20 years will pay a reduced minimum social security advance payment of 3,575 Kč in 2026. This reduced advance payment applies to the year the business is started and the following two years. For health insurance, however, self-employed individuals starting out in their primary business activity pay the standard minimum advance payment, which amounts to 3,306 Kč per month in 2026.

It is important to note that the amount of these advance payments depends on the income you earned in the previous year. The life of a self-employed person can be turbulent, and profits from the past are by no means a guarantee of future profits. So let’s briefly discuss how to respond to a situation where your profits drop dramatically, but your advance payments remain high because you earned a lot last year.

Request a reduction in your advance payments

Did you change jobs at the start of the year, or did you lose an important client? Has your income dropped dramatically, but your obligation to pay social security and health insurance contributions remained the same? Don’t despair—there’s a solution.

However, everything depends on your initiative. The authorities won’t take any action on their own, as they continue to assume that your income hasn’t changed. Furthermore, when calculating advance payments, they’ll base their calculations on the previous year’s tax return, which you must file by the beginning of April the following year if filing in person, or by May if filing electronically. For tax advisors and attorneys, the deadline is sometime in July.

In practice, we see that self-employed individuals often delay filing their requests because they expect the drop in income to “even out” by the time the annual tax return is filed. However, by doing so, they unnecessarily tie up cash that they could use to run their business. Another common mistake is that entrepreneurs submit their applications without a sufficient overview of their income and expenses for the relevant months. The tax office then has to request additional information, which prolongs the process and delays the receipt of the tax relief.

The solution is simple—ask the Czech Social Security Administration and your health insurance company to reduce your advance payments for these contributions due to a decrease in your income. The request is submitted using a special form:“Application for a Reduction in the Monthly Assessment Base for Self-Employed Persons” with the Czech Social Security Administration or, for example,“Application for a Reduction in Advance Insurance Premium Payments for Self-Employed Persons” with Všeobecná zdravotní pojišťovna.

Submitting the application electronically significantly speeds up the entire process today. Health insurance companies accept forms via client portals (e.g., Moje VZP) or a data box; similarly, the Czech Social Security Administration (ČSSZ) accepts them via the e-Portal. All you need to submit the application is a data box or “Citizen Identity.” The authorities require only brief information: the applicant’s identification, the reporting period, and a summary of actual income after deducting expenses for each month.

Before you submit your application, check that your figures actually meet the authorities’ requirements and that you are applying correctly to both institutions. If you are unsure, we will prepare a legal assessment for you and recommend how to draft the application so that it is not unnecessarily returned for additional information.

However, the process does not end with submitting the application. You must also provide evidence that your income has actually decreased. The difference in income between last year and this year must be at least one-third. This is calculated as the difference between the average income for last year and this year, using the last three consecutive calendar months as the basis for the calculation. To illustrate this, we have prepared the following table:

The table above shows that income for the first three months of 2025 fell by more than ⅓, so it is possible to ask the authorities to reduce your advance payments. You can do this for the first time in April.

By how much can the advance payment be reduced?

The Czech Social Security Administration or the health insurance company decides on the reduction of advance payments based on internal guidelines. Advance payments cannot be reduced below the statutory minimum.

If your request for a reduction in advance payments is approved, the new amount takes effect the following month. This amount then remains in effect until your next tax return, when new advance payments will be calculated based on your income for the year 2025.

A specific situation arises if you are reclassifying your business as a secondary activity and are still awaiting new annual recalculations—typically after starting a new job, going on parental leave, or receiving a pension. Until your business status changes, your old advance payments remain in effect.

In the meantime, you have the right to file a standard Application for a Reduction in the Monthly Assessment Base for Self-Employed Persons. Adjusting advance payments based on a decrease in income is therefore not precluded by secondary employment—both relief measures can be combined, though each targets a different part of the payment schedule.

What to Do About Overpayments or Underpayments?

The good news is that even if you’ve essentially overpaid your advance payments, the authorities will refund the overpayment at the end of the year when you file your summary. Alternatively, you can use the overpayment toward next year’s advance payments. You must request a refund when filing your tax return with the Social Security Administration (OSSZ) and your health insurance company. The refund must then be issued to you within 30 days at the latest. If you have a tax overpayment and wish to receive a refund, you must request it.

You can file a request for a tax overpayment refund either through the tax office’s online application, via electronic filing with the Financial Administration, or through a data box. Another option is to send an email, which you must then verify with a physical signature on a paper document. The overpayment will then be refunded to your account or sent to your address within thirty days. Please note that refunds are only issued if the overpayment exceeds 200 crowns. Of course, it’s best not to overpay unnecessarily; reduce your advance payment in a timely manner and use the money to grow your business or for personal expenses.

If you have an outstanding balance for social security or health insurance, you must pay it no later than eight days after filing your tax return. Any tax arrears must then be paid when you file your tax return. You can make the payment at any tax office cashier’s desk, by payment slip, or by bank transfer to the account of the relevant tax office responsible for income taxes.

Summary

If your income has decreased as a self-employed person, you can apply to the Czech Social Security Administration (ČSSZ) and your health insurance company for a reduction in your social security and health insurance advance payments. The application must be submitted on the prescribed form, and you must provide proof of your current income and expenses, typically for the last three consecutive months. Advance payments cannot be reduced below the statutory minimum; in 2026, the minimum advance payment for health insurance is 3,306 CZK per month, and for social insurance, current rules—including changes effective as of July 2026—must be taken into account. If you overpay your advance payments, you can request a refund of the overpayment or have it applied to future payments; conversely, if you have an underpayment, you must settle it within the statutory deadline. It is best not to delay your application and to prepare the necessary documents in a timely manner so that high advance payments do not unnecessarily strain your business’s cash flow.