Employer of RecordMay 23, 2025Employer of Record in the Czech Republic

The Czech Republic is no longer just a travel gem in Central Europe—it’s fast becoming a hotspot for global businesses. With a skilled workforce, cost-effective labor, and EU membership, the Czech Republic offers ideal conditions for international expansion.

But as any global employer knows, hiring abroad can be complex. That’s where an employer of record in Czech Republic comes in—providing a fast, compliant, and low-risk route to hiring talent in this dynamic economy.

The Czech labor market strikes a balance between flexibility and worker protection. Companies benefit from:

• Lower labor costs than Western Europe
• Skilled, well-educated professionals
• Flexible work regulations

This makes the Czech Republic a smart location for teams looking to scale cost-effectively.

The Czech government actively encourages foreign investment through:

• Tax incentives and investment support
• EU membership providing regulatory stability
• Streamlined administrative processes

It’s no surprise that the country is now a regional tech and innovation hub

When expanding to the Czech Republic, companies typically choose between two routes: using an employer of record or establishing a legal entity. Let’s break down the pros and cons of both.

Pros:

• Quick Market Entry: Rapid employee onboarding without waiting months for entity registration.
• Compliance Confidence: Navigate Czech labor laws, taxes, and payroll with expert support.
• Operational Flexibility: Easily scale your workforce up or down as needed.

Cons:

• May include service fees depending on the provider and services offered.
• Less direct control over back-end HR processes.

Pros:

• Full control over hiring, benefits, and HR policies.
• Establishes a permanent business presence.

Cons:

• Time-consuming incorporation process.
• Higher upfront and ongoing costs.
• Heavy compliance and reporting requirements.

• Standard: 40 hours per week
• Overtime: Max 8 hours/week or 150 hours/year
• Compensation: Extra pay or time off

• Non-managerial roles: up to 3 months
• Managerial roles: up to 6 months

• Minimum 4 weeks (20 days) paid vacation annually
• May increase with seniority or collective agreements

• First 14 days: 100% salary paid by employer
• After 14 days: 60% of average wage (for up to 380 days)

• Minimum wage (2025): CZK 20,800 (~€832/month)
• Salaries must be paid monthly, with payslips showing all deductions
• The old tiered guaranteed wage system has been removed

Pregnant employees are entitled to:

• 28 weeks of paid maternity leave
• 37 weeks in the case of multiple births
• Leave can begin 6–8 weeks before the due date
• The Social Security Administration pays 70% of the assessed wage

• Parental Leave: Available until the child turns three. Either parent may use it.
• Care Leave: Up to 9 days to care for children under 10 when a family member is ill.
• Parental Allowance: The Labor Office provides CZK 300,000 per child (up to age four), regardless of family income.

These generous family benefits make the Czech Republic attractive for both employers and employees looking for work-life balance.

Employers must contribute 9% of each employee’s gross salary to the Czech health insurance fund. There is no cap on the wage base for this purpose.

With an employer of record in Czech Republic, this contribution is calculated and remitted automatically, ensuring seamless compliance.

• New Year’s Day – January 1
• Good Friday – March 29
• Easter Monday – April 1
• May Day – May 1
• Liberation Day – May 8
• St Cyril and St Methodius Day – July 5
• Jan Hus Day – July 6
• Statehood Day – September 28
• Independence Day – October 28
• Freedom and Democracy Day – November 17
• Christmas Eve – December 24
• Christmas Day – December 25
• 2nd Day of Christmas – December 26

Employer payroll contributions are generally estimated at an additional 33.8% on top of the employee salary in The Czech Republic.

In The Czech Republic , the typical estimation for employee payroll contributions cost is around 11%.

Czech employees are subject to an individual income tax, calculated at 15% of their gross salary up to 141,764 CZK and 23% for the portion of the gross salary exceeding this threshold.

The Czech Republic allows for rapid onboarding when using an EOR. With :

• Employees can be onboarded in 1–2 working days
• The process starts once the employee submits all documents on the platform
• For non-EU nationals, a Right to Work check may add up to 3 days
• Pre-employment medical checks are required unless the role involves no specific health risk (e.g., remote work)
• Payroll cut-off is typically the 10th of each month, impacting start dates

Speed matters. And with an EOR, delays are minimal.

For non-EU nationals, working in the Czech Republic requires navigating a complex range of permits. Your employer of record in Czech Republic handles all administrative aspects of these work authorizations on your behalf.

Here are the key types of work permits your EOR can help secure:

A combined residency and work permit for non-EU nationals tied to a specific employer and job.

Designed for highly skilled workers with a university degree and a high-paying job offer. This offers broader mobility and work rights.

For employees of global corporations being transferred temporarily to a Czech office or branch

Valid for up to six months, this applies to sectors like agriculture, forestry, and food processing.

For freelancers and entrepreneurs from non-EU countries who want to run a business legally in the Czech Republic.

📌 EU/EEA nationals do not need work permits to work in the Czech Republic.
📌 A valid job offer is typically required before work permits are issued.

An EOR in Czech Republic ensures that the correct visa and work documentation are filed, reducing the risk of delays or compliance issues.

Ending employment in a foreign country comes with its own set of rules. The Czech Republic has well-defined termination procedures, notice periods, and severance pay obligations.

When an employer initiates termination:

• It must be in writing
• It must specify one of the legal reasons:
  • Organizational restructuring
  • Employee’s health reasons
  • Failure to meet job requirements
  • Gross misconduct or criminal conviction
  • Repeated performance issues

Contracts cannot be ended arbitrarily—the reason must align with Czech labor law.

• The minimum notice period is two months
• Applies to both employer-initiated terminations and employee resignations
• The notice period starts on the first day of the month after notice is given

Severance is mandatory in redundancy cases and depends on length of service:

• 1 year → 1 month’s gross salary
• 2 years → 2 months’ gross salary
• 3+ years → 3 months’ gross salary

With an employer of record Czech Republic, you can rely on accurate, compliant terminations. The EOR manages exit procedures, ensures legal notice, calculates severance correctly, and shields your company from wrongful termination claims.

When you’re hiring abroad, protecting your intellectual property (IP) and confidential data is just as important as compliance.

An employer of record in Czech Republic safeguards your IP through:

• Confidentiality and non-disclosure agreements in employment contracts
• Non-compete clauses where appropriate
• Clear IP ownership of inventions and materials created during employment
• GDPR-compliant onboarding and data management
• Support for exit procedures like reclaiming equipment and data access
• Legal assistance in the event of disputes or IP breaches

Your ideas and innovation remain yours—backed by enforceable legal safeguards.

Whether you’re hiring one remote software developer or building a local sales team, PamGro’s EOR services let you expand into the Czech Republic with total peace of mind.

With deep knowledge of Czech labor law, GDPR compliance, and payroll infrastructure, PamGro makes global hiring feel local—and seamless.

You gain:

• Lightning-fast onboarding
• Total legal and tax compliance
• Local payroll and benefits management
• Ironclad IP protection
• A trusted partner in your expansion journey

1. What are my options if I want to hire a worker in Czech Republic?
2. How long does it take to set up a company in Czech Republic?

Establishing a local legal entity in the Czech Republic can take weeks, if not months. But the time commitment doesn’t end there. You’re also responsible for:

• Monthly payroll calculations
• Tax filings and compliance updates
• Extending employee benefits
• Navigating evolving labor laws

And if you’re hiring just one or two employees, this infrastructure investment often isn’t worth it.

Instead, an employer of record Czech Republic lets you start hiring in days, not months—without the burden of entity setup or ongoing administrative overhead.

3. Can I employ people as independent contractors in Czech Republic?

Yes, it may seem easier to label a remote worker as an independent contractor—but if they’re working full-time, reporting to your managers, and using your tools, this can backfire.

In the Czech Republic, misclassification of employees can trigger penalties for:

• Unpaid holiday and sick leave
• Social welfare and insurance contributions
• Maternity and paternity benefits
• Employment protection violations

Using an EOR Czech Republic model ensures full compliance with Czech labor regulations, giving your workers proper protections—and protecting your business from legal and financial risks.

4. What does HR compliance mean in Czech Republic, and why does it matter?

When you hire in the Czech Republic, you’re required to meet a range of HR compliance obligations, including:

• Respecting working hours and overtime limits
• Providing sick leave and illness benefits
• Complying with annual leave and minimum wage laws
• Applying relevant tax credits and social contributions

With an employer of record Czech Republic, compliance becomes stress-free. Your EOR partner manages local labor law requirements while you focus on running your team.

5. How much does it cost to employ someone in Czech Republic?
6. What does Employer of Record mean in Czech Republic?

In the Czech Republic, an EOR must operate under a licensed temp agency model. When you work with an EOR like Boundless, they become the legal employer of record, handling:

• Onboarding, employment contracts, and local payroll
• Tax reporting and salary payments
• Employment law compliance (maternity/paternity leave, public holidays, illness benefits, etc.)
• Communication with Czech labor authorities
• Issuing payslips and making tax authority payments

7. Your role as the client?

You remain in control of:

• Sourcing and managing your employees’ workload
• Contributing to their professional development
• Paying your payroll invoices on time
• Following best practices provided by the EOR (covering holiday pay, sick leave, overtime rules, probationary periods, severance, and more)

With this division of responsibilities, your team enjoys full legal employment rights—without you needing to become an HR expert in Czech labor law