You work freelance, even twelve hours a day, but if you or your child gets sick, you are much worse off than your friends with a contract and eight-hour days. Are there ways to improve your situation and get a better position as a self-employed person?
Freelance work can take many forms. You manage a website, edit clothes, translate, all for many different clients, or you have one employer, go to one office and use the company email, yet you don’t have a contract of employment but you do invoicing. The latter variant (the so-called shvarcsystem) is basically prohibited by law, but unfortunately we often see it despite these prohibitions.
Most variants of “freelance” work offer the possibility to schedule your working hours according to your own preferences or to go on holiday whenever you wish. But it cannot be overlooked that friends with a work contract also have a number of advantages over you. For example, meal vouchers, a company laptop, sick days and, last but not least, sick pay and entitlement to sick pay.
To mitigate at least some of the disadvantages, we’ll outline what your options are.
Tip: Are you self-employed but work for a company for a commission or fee every month? Are you an “employee” through a shvarcsystem? You might be wondering if you could be eligible for paid leave. We take a closer look at this in our separate article.
A self-employed person usually has to take care of themselves in the event of illness. You may be telling yourself that you haven’t had anything more serious than a cold in five years and you won’t waste your time thinking about situations like this. In that case, you may just need to check whether your savings are enough to last you a few months in case something does happen.
If there are only a few thousand in your savings account and other accounts aren’t much better off either, it’s a good idea to choose one of the two, or combine the two options of paying sick pay and commercial insurance.
Sick pay for the self-employed starts on the 15th day of illness and is calculated in calendar days. Wage replacement only applies to working days.
As a self-employed person, do you need advice on insurance or sickness benefits?
Our team includes specialists in all areas of law, so we can guarantee a really high quality of legal advice. Moreover, we can handle everything online and within two working days.
You can join one of the commercial insurance companies and according to their offer you can set the payment after 15, 30 or 60 days of illness. As a rule, you must provide proof of the previous year’s tax return. The amount of the payments should be set so that if you are unable to earn money, it will not mean a significant drop in income and will allow you to pay all the mandatory payments (rent, utilities, mortgage, etc.) and still make a reasonable living.
Even if you are able to live off your savings for a few months, still look for some kind of option in case of illness. For example, even paying the lowest amount of sick pay, i.e. CZK 126, will allow you not to pay social security and health insurance contributions in the event of long-term illness.
Tip: In 2024, earners are in for some rather unpleasant news. The main one is an increase in the so-called minimum assessment base. “Until now, it has been 25 per cent of the minimum wage. However, by government decision, it will be increased by 5 per cent every year until 2026 to gradually reach 40 per cent of the average wage. In 2024, the base will therefore increase from 25 to 30 percent and the levies will increase proportionally. The same base for self-employed persons who have a business as a secondary activity is also to rise from next year, but much less – from 10 to 11 per cent of the average wage. The increased minimum advance payments for health insurance will amount to CZK 2 968. Therefore, the minimum monthly advance payments to the CSSA will increase from CZK 2,944 to CZK 3,852 in 2024.
But even being on sickness insurance won’t ensure you can look after your own child with tonsillitis. So if you are looking for a form or template for this benefit as a self-employed person, you are looking in vain. There is no such option in the law and self-employed people are not entitled to the nursing allowance.
It is not generally widely known that you can also take out insurance for nursing benefits. You just need to look at the insurance companies’ offers and do a little research.
You will then have to be patient and wade through several pages of terms and conditions full of exclusions or exceptions to exclusions. In the end, though, you can get insurance that will cover your child’s treatment in the event of illness, or even in a situation where school is closed. This is usually tied to your own commercial life, sickness or accident insurance.
Long-term care allows you to care for a loved one, typically a family member, who has been discharged from hospital (after a minimum seven-day hospital stay) and their doctor has decided that full-time care is necessary for more than 30 days. This could be, for example, the long-term illness of a young child, but it could also be the serious post-accident condition of an adult who requires care from others.
Unlike normal short-term care, self-employed workers who have been covered by sickness insurance for at least 3 months immediately before the date of entry into long-term care will qualify for this option . You must not be self-employed and gainfully employed while receiving this benefit.
If you work for the same employer on a long-term basis in a so-called ‘shvarcsystem’, you can try to agree with the employer whether your mutual agreement could cover the regular lump sum payment, even in the event of holidays and occasional sickness or childcare. Such a set-up requires mutual trust and probably cannot be expected to cover a child’s 10 days’ illness each month, but a sympathetic employer might be amenable to some such arrangement. After all, not having to pay social security and health insurance contributions on your behalf will save him many thousands of crowns a month.
After all, the situation of wage earners may not be dramatic in the event of illness. A combination of building up savings, paying into one of the insurance options, and possibly making an agreement with your employer can bring you closer to a similar position to that of employees.
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