Global Employer Services
Global Rewards Update:
Czech
Republic
May 2009
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The Computation of The 2009 Tax Base
In the Czech Republic, the
employee is taxable on the employer’s social security and health
insurance contributions.
As of 2009, the tax base is
no longer increased by the actual employer social security and health
insurance contributions. Instead, under the new rules, the tax base is
calculated as gross income increased by the total amount of social security
and health insurance contributions payable by the employer, irrespective of
whether actual contributions are made to the Czech social security regime or
any other foreign social security regime. Based on the Czech tax
legislation, this increase is in the amount of the 34% (i.e., the employer
social tax rate in 2009) of the gross income, up to a maximum increase of CZK
384,418 (approximately USD 19,322.63) for 2009 (i.e., the maximum employer
social security and health insurance contributions in 2009).
Please note, the term gross
income does not include any income that is exempt from social security and
health insurance contributions under Czech legislation.
Action
Companies should:
·
Inform employees of the
change in tax base calculation.
·
Consider the additional
costs that may be incurred under the new rules in particular for assignees
covered under a Certificate of Coverage.
People to Contact
For assistance in this
matter or any other issue related to the operation of your global rewards
plans, please contact your local Deloitte global rewards consulting services
advisor or email us at: globalequity@deloitte.com and a global rewards consultant will contact you.
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