Employer of Record Czech Republic

There are various ways to employ people in Czech Republic, each with differing levels of costs and compliance.

Employee is employed by you and paid by you from your overseas Company Pros: Seems like it would be the cheapest and easiest option. Cons: Unable to pay the social security contributions which are required by law, and Czech employment law will apply to the employee.

Using an Employer of Record Pros: In the Czech Republic, utilizing an Employer of Record service proves to be the most time-and-cost-effective solution for managing payroll, HR, and compliance tasks, particularly for establishing employer-employee relationships with teams smaller than 15 individuals. Cons: Costly when hiring a large number of employees. Knowing which Employer of Record provider to choose can be difficult.

Entity Set-up Pros: This option might be the most cost-effective solution for employing a significant number of personnel, typically exceeding 15. Cons: Establishing a legal business entity and maintaining strict compliance with Czech employment and tax regulations can be a significant cost and time burden, especially for smaller operations. This approach often becomes impractical for businesses employing less than 15 individuals.

Hire a contractor in Czech Republic Pros: This solution proves cost-effective when the worker isn’t exclusive to your company and has the flexibility to send a substitute for their duties on off days. Cons: Engaging a full-time worker solely dedicated to your company without proper employment classification constitutes a legal violation in the Czech Republic. Penalties for such misclassification can range from fines to criminal charges.

Yes, as long as the worker is working for other companies, is able to decide how to do their own work, and can send another contractor in their absence.

In the Czech Republic, a worker solely dedicated to your company and whose duties and tasks are dictated by your organization must be classified as an employee. Failing to do so constitutes a breach of Czech employment law.

Misclassifying an employee in the Czech Republic can lead to substantial fines, the obligation to pay outstanding holiday pay and social security contributions, the potential need to establish a local presence, and even legal action from the employee for breached employment rights.

The initial steps to establishing your business in the Czech Republic involve registering it with the Commercial Register and obtaining a trade license from the relevant authorities.

While the initial registration process appears simple, establishing a physical office for tax purposes, opening a Czech bank account (which often requires in-person presence), managing payroll software compliant with Czech regulations, and fulfilling tax filing obligations add complexities to the overall setup.

Hiring people in the Czech Republic means adhering to specific legal obligations. In simpler terms, HR compliance ensures your company strictly follows all employment and work practice regulations.

But why is it so important? HR compliance in the Czech Republic goes beyond mere formalities; it safeguards both your employees and your business. Following employment regulations guarantees fair treatment for your workforce, encompassing aspects like sick leave, annual leave, minimum wage, and appropriate working hours. This not only fosters a positive work environment but also minimizes the risk of financial penalties, legal repercussions, and even lawsuits arising from non-compliance.

Partnering with Agility EOR as your Employer of Record in Czech Republic simplifies tax and social security obligations. We manage all employee-related filings and contributions, ensuring complete compliance, so you can focus on running your business with peace of mind.

Agility EOR takes care of your HR compliance headache. Here’s how:

Trusted Partners: Agility EOR collaborates with leading Czech employment lawyers and advisors. This ensures your employment contracts and other essential documents strictly adhere to all local legal requirements.

In-Depth Knowledge: We maintain a deep understanding of intricate aspects of Czech employment law, including payroll, social security, data privacy, notice periods, and remote work regulations.

Swift Action: If an issue arises, our internal team are immediately on hand to help and assist.

While Agility EOR handles the complexities of Czech employment law and compliance, your company remains responsible for day-to-day management and communication with your team, including addressing performance issues, taking disciplinary actions when necessary, and fostering a positive work environment through open communication.

Agility EOR handles the legal side of things in Czech Republic, so you can focus on managing your team and their daily tasks.

In Czech Republic, both employers and employees contribute to the social and tax system.

Employers: Employer social security contributions; Employer health insurance contributions.

Employees: Income tax, Universal Social Charge (USC), and Social Insurance insurance.

Employees working under an Czech Republic Employer of Record benefit from legal protections and receive a standard employment contract. This includes statutory benefits like maternity leave, annual leave, and sick pay, along with applicable tax credits. It’s important to note that the Czech public healthcare system provides coverage for all residents, not just employees.