When is the income statement completed and where is it sent?

What is an income statement?

The income statement is used to properly submit information to the Czech Social Security Administration (CSSA) and is also used to calculate taxes and levies. By keeping a correct record of your income, you can avoid fines, incorrect taxation or incorrect calculation of sickness insurance.

Do not confuse it with a timesheet, which is usually a simple table or document summarising the hours worked. It is used not only to account for pay but also as a legal document (e.g. in a labour inspectorate inspection, payroll audit or pension claim).

The FTE income statement is therefore a monthly report that the employer submits electronically to the CSSA. It reports all income paid to a worker under a work performance agreement, both below the limit (without deductions) and above the limit where deductions apply. The obligation to submit this report applies from 1 July 2024.

For 2025, an important threshold has been set: monthly income from a DPP up to 25% of the average wage, i.e. up to CZK 11,500, is not subject to social security or health insurance contributions. Therefore, if a student receives CZK 11,000 per month for a DPP, no contributions are payable. However, the employer is still obliged to submit an income statement.

However, once the income from all the DPPs with one employer per month exceeds CZK 11,500, there is an obligation to pay insurance premiums: the employer and the employee pay insurance premiums at the applicable rates, and an income statement is again required.

How to send the FTE income statement correctly

Employers have a number of obligations under the legislation. They continue the reporting obligation every month, regardless of the amount of income or participation in insurance The statement is sent electronically, via the ČSSZ ePortal or data box. The form is called “Statement of income charged by the employer to employees working on the basis of a work performance agreement” and is available online. It must be submitted no later than the 20th day of the following month.

If the report is incorrect or late, the CSSA may impose penalties. But if someone mistakenly understates their income, it is usually possible to correct or cancel the report.

Remember that even if the income of the temporary worker is not subject to insurance (it is below the limit), you must still file the report or risk penalties.

How it works in practice: Mr Novotny works as a DPP in a restaurant. In February, his income was CZK 9,500 (below the limit of CZK 11,500), so he is not subject to deductions. The restaurant operator has to submit the DPP’s income statement by 20 March. At the same time, Mr Novotný keeps a timesheet where he records his shifts (Friday 17:00-21:00, Saturday 18:00-22:00…), 30 hours in total. The statement will be signed by both him and the operator. If he earned CZK 12,000 in March, the income statement automatically indicates the contributions (above the limit) and the employer sends them to the CSSA.

What to avoid?

A very common problem is a mismatch between the labour statement and the income statement. A typical example is when an employee’s timesheet shows, for example, 40 hours worked, but the income statement for the CSSA shows a different amount or time. At first glance, it may appear that the company is manipulating remuneration, paying wages “on the side” or not keeping records correctly. In the event of an inspection, the labour inspectorate or the CSSA may then demand an explanation and impose heavy fines.

Late submission of income statements is equally problematic. If an employer misses the legal deadline (by the 20th of the following month), he or she runs the risk of penalties. These can run into tens of thousands of crowns, even in cases where the error was inadvertent. It is therefore recommended to set up control mechanisms such as matching the labour statement with the income statement and regular internal checking of deadlines.

How to prepare for an inspection by the CSSA or the Labour Inspectorate

Inspections by the CSSA or the Labour Inspectorate do not avoid smaller companies and sole traders in practice. Most often they come on the basis of an employee’s complaint, but they can also be random. If inspectors find a discrepancy between the income statement and the labour statement, they may request additional documents, such as employment contracts or agreements on work performance, pay slips or bank statements. The employer should therefore keep everything ready and archived – both labour and income statements – for at least three years, but ideally longer.

It is also very important to ensure that employees are familiar with the filing system and sign the statements regularly. Otherwise, there is a risk that the employee will question the accuracy of the data at the audit. Penalties for errors can run into tens of thousands of crowns, and even more for repeated violations. Regular internal control and transparent reporting are the best prevention against unnecessary fines and litigation.

Summary

Proper handling of the DPP income statement is a must for employers in 2025 – the obligation to submit this electronic form to the CSSA every month, even if the employee’s income remains below the threshold of CZK 11,500 and is not subject to deductions. The submission must be made by the 20th day of the following month at the latest, otherwise there is a risk of fines of tens of thousands of crowns. The income statement is not to be confused with the labour statement, which records the hours actually worked and serves as a legal document, for example, during an inspection by the labour inspectorate. However, the two documents must always be consistent – discrepancies between the hours reported and the amounts paid can lead to suspicions of wage manipulation. Therefore, it is advisable to set up internal mechanisms that match the labour statements with the income statements and check the dates of dispatch in a timely manner. The employer should keep all documents archived for at least three years and ensure that employees sign them regularly. Well-established records and transparent processes are not only a prevention against sanctions, but also a proof of fair treatment of employees and a guarantee that the company will be in the clear in case of an inspection by the CSSA or the labour inspectorate.