Withholding tax: what rules apply to employers in 2026?

In this article, you will learn when withholding tax is used and when advance tax is used, what exactly the due date means and from which point the deadlines are calculated. You’ll also find a practical breakdown of payment details – how to choose the correct prefix, the tax office’s matrix and how to mark the payment correctly. Finally, you’ll get to the billing: deadlines, the form of submission, attachments for corrections and situations where you need to correct an error.

What is withholding tax and why it affects you as an employer

Withholding tax (tax levied by deduction at a special rate) is a scheme where the tax is not paid by the taxpayer, but is deducted by you when you are paid and remitted to the tax authorities. The law says two key things here: tax is withheld on income subject to the special rate, and withholding is done by the payer when the payroll is paid (or in some cases when the liability is booked).

For employers, the most common practical scenario is that you are paying someone income that falls into the withholding tax category, so you have to keep track of when the withholding tax is due, send it to the correct account, and file a tax return after a year.

When the employer applies withholding tax (and when advance tax)

In simple terms, withholding tax typically applies to selected income under the Income Tax Act and in practice this is usually a situation where the employee does not have a signed tax declaration and at the same time the income is “minor” or a specifically designated type of income.

Typically this will be a work arrangement up to a certain limit – if the employee does not sign a declaration, the employer will apply withholding tax. Once the limit is exceeded or in a different setup, it goes into advance tax.

Importantly, the law also contemplates that some income taxed by withholding may come back into play on an annual return or at a later date under certain conditions – typically when the taxpayer meets the statutory conditions and includes the income on his or her tax return.

Due date for withholding tax: by when you must pay the tax

You must pay the withholding tax by the end of the calendar month following the month in which you were required to withhold.

So, for example, if you pay remuneration in March on which you have to withhold tax, you have until the end of April to pay the tax. It makes sense: you’ve already effectively taken the tax out of the recipient’s money, and the state expects you to send it on without undue delay.

And beware – the law also says that if the taxpayer doesn’t withhold the tax, withholds it incorrectly, or doesn’t remit it on time, the taxing authority will collect it as a debt owed by the taxpayer.

Where to send the withholding tax: account number and account number

In practice, the most common mistake with withholding tax is not the amount of tax, but exactly where to send the payment. The tax authorities do not operate with one universal account for all taxes. The account number for the payment consists of two main parts: the prefix (telling you what kind of tax you are paying) and the matrix (telling you which tax office you are sending the payment to).

Prefix for withholding tax

The prefix specifies the type of tax, i.e. what you pay. For withholding tax, these two prefixes apply:

• 7720 for personal income tax withheld at a special rate,
• 7712 = for corporate income tax withheld at a special rate.

If you send withholding tax to an account with the wrong prefix, the payment may be booked to a different tax type and your personal tax account will show an underpayment even though you have actually sent the money.

Matrix (master account number)

The matrix is the basic (trunk) part of the account number of a particular tax office – that is, to whom you are sending the payment. Matrices are publicly listed in a separate annex of the Revenue.

For example, the Financial Administration for the Financial Office for the Capital City of Prague states: matrix 77628031 and bank code 0710.

When you combine this with the prefix number, you get a typical account shape:

• 7720-77628031/0710 (withholding tax for individuals at the FÚ for Prague),
• 7712-77628031/0710 (withholding tax for legal entities at the FÚ for Prague).

In order to choose the correct registry office, you need to know which tax office is locally competent for you. In general, local jurisdiction is based on the place of residence for individuals and the registered office for legal entities.

Once you know which tax office is yours, you take its registry in the annex of the Tax Administration and compile the account in the form:

prefix (7720/7712) – Registry / 0710.

Pay attention to the identification of the payment

Even if you send the payment to the correct account, you still need the tax authorities to correctly allocate it to you and to the correct period. This is done through payment identifiers (typically a variable symbol).

In practice, the most common variable symbol is the tax entity identifier: if you have a tax identification number, you use the stem part of it, i.e. the numbers after the prefix “CZ” (e.g. CZ12345678 → 12345678). For foreign persons who do not have a Czech VAT number or standard identifiers, the identifier assigned by the tax administrator (e.g. the taxpayer’s own number) is used.

Withholding tax settlement

In addition to the actual payment of the money, there is also the “paper” (nowadays more electronic) side of things: the withholding tax statement.

The withholding tax settlement deadline

The Tax Code stipulates that the return must be submitted within 3 months after the end of the calendar year and this deadline cannot be extended. For most taxpayers, this means in practice by the end of March (whichever is the last day of the deadline in a particular year).

Withholding tax return form

Filing is now typically handled electronically through MY Taxes – either directly through the Online Tax Office(DIS+) or through the EPO application.

As a practical matter, we recommend thinking of the return as an “annual return” of withholding tax. Don’t expect to file it off the top of your head. It works best if you already keep a simple record during the year: when the obligation to withhold arose, how much you withheld, when you remitted and to which prefix/account. Then billing isn’t a stress, it’s just exporting the data into the correct format.

If you have made a withholding correction for a taxpayer (individual), you are also required to file an attachment to the return (this is a separate form that contains the corrections). This is because the tax administrator needs to see who the correction was reflected for and how (typically for agreements, additional withholding corrections, etc.). If you don’t attach the attachment, the bill will go away, but you’re asking for a notice to complete it.

Supplementary withholding tax statement

Mistakes happen in every payroll office: someone supplies supporting documentation late, the wrong scheme is set up for an agreement, you mistakenly use a different rate, or a backdated income is corrected during the year. At that point, it’s crucial to know that the law doesn’t want you to wait until the annual bill when you already know something is wrong.

Therefore, if you find that the tax should be higher than the last known tax, you must file a supplemental return by the end of the month following the month you found out and pay the difference within the same time frame.

It’s also worth mentioning the other side of the coin – the situation where you withheld more than you should have. In the case of withholding tax on employment income, the law also remembers that the taxpayer can (if the conditions are met) repay the incorrectly withheld amount to the taxpayer, and also ties the procedure to the deadlines attached to the accounts.

Summary

For employers, withholding tax is a scheme whereby you withhold the tax from the recipient at the time of payment (or when the liability is booked) and then, as the payer, remit it to the tax authorities. The key is to keep an eye on the due date: you must send the withheld tax by the end of the calendar month following the month in which the obligation to withhold arose. The most common mistakes are not in the amount of tax, but in paying into the wrong account – the account number is made up of a prefix and a matrix (the tribal part of the tax office’s account). For withholding tax, the prefix numbers 7720 (FO) and 7712 (PO) apply, the matrix is chosen according to the local FÚ, and the standard bank code is 0710. You can also ensure that the payment is correctly matched by an identifier (typically the variable symbol from the trunk part of the VAT number).

In addition to paying the money, don’t forget the withholding tax statement: it is filed within 3 months after the end of the calendar year (in practice, usually by the end of March) and by default electronically via MY Taxes. If you make corrections to specific taxpayers during the year, a separate attachment with the corrections is included with the return. And if you discover an error that means higher tax, you don’t wait until the annual closing date: a supplementary return is filed by the end of the month following the month of discovery and the difference is paid within the same timeframe.